Sour Experiences Make Waji Boutique Look for Better Ways to Run the Business

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Mr Bashir thought Khawar was perfect for the job. He was looking for someone who could handle all aspects of the business and Khawar fit the spot. Khawar was hired on a monthly salary of Rs 8500.

Operations and Procedures

The opening hours of the boutique were from 11am to 11pm, with Friday as an off day. Most of the shops in the market also followed similar timings. Mr Bashir had handed the keys to Khawar from the very first day and made him responsible for opening and closing the shop.

Mr Bashir had devised a two tag system for managing inventory. For every outfit he made two tags; one he put up on the dress at the outlet with the sale price on, the other he kept at home and wrote description of the outfit, cost price, sale price and date of purchase on it. At the end of every month he asked Khawar to hand him the tags of the sold merchandise and matched it with the tags at home. This way he knew how many clothes were hanging in the boutique at any one time. At the end of every month Mr Bashir would go and visually check all the clothes placed in the boutique. He also randomly picked samples and noted their tags so to match them with the ones at home. This helped him to keep a check on inventory and gauge the type of merchandise to order. Also, there was Khawar to help. Every month he would ask Khawar on what other types of clothes he should get from the wholesalers.

The system seemed to be working pretty well. Khawar was a keen observer and he rightfully pointed out the inventory that was being sold and asked Mr Bashir to buy more of it every month. The hottest selling items in the shop were Plazos and Casual Shirts. Towards the end of sixth month Mr Bashir was buying, on average, about 40 Plazos and 30 casual shirts every month.

Fraud

Everything seemed to be running smoothly. The business was profitable, the sourcing of the products was well set and the boutique had many repeat customers. Six days into the seventh month of operations of the business Mr Bashir visited the shop and found out that the shop had been closed for the past three days. Khawar had never done this before, let alone take a sick leave. Mr Bashir tried to call Khawar on his mobile phone but there was no answer, so he left him a message. The next day he was surprised to know there was no call from Khawar. He decided to visit Khawar’s house and found out that Khawar and his family had vacated the flat about three days ago and left no follow up address or contact number. Mr Bashir was alarmed and contacted the gardener for it was him who recommended Khawar. Even the gardener did not know where Khawar went. The gardener told Mr Bashir that he would contact his family in Mansehra to find out where he went. Even Khawar’s family didn’t know where he was.

It had been about a week since the shop was closed. Although, Mr Bashir had put up adverts looking for a new sales person, he did not want to wait for too long to open the boutique as it would drive his loyal customers away to another shop. He decided to sit at the shop himself. For the next three weeks he sat at the boutique and got to know all the mischief Khawar was up to.

Khawar did open the shop at 11am but regularly left at 1pm putting up the sign of ‘Prayer Break’ and came back at about 4pm to open the shop. He had bought his family clothes from neighboring shops on company’s account and loaned money from them. He would also bring a separate stand of ladies accessories and put it in front of the shop between 4pm to 8pm noting Mr Bashir never visited the shop during that time. Should the customers appear at the stall and the shop at the same time he prioritized attending the customers at his stall first.

Mr Bashir was shocked to find out the discrepancy in his inventory. He thought his two tag system, random count and visual check was fool proof. Although, the hottest selling items were well in check but the old inventory items didn’t match the records. A customer came to the shop and asked Mr Bashir to show a dress from one of the earliest merchandise he had bought. She liked the dress but thought it was too expensive for just a shirt and scarf. Mr Bashir thought so too for the description of the item showed three pieces. Khawar had kept the tags on the outfits as they were but had sold different parts of the dresses separately. For a three piece suit that had trousers, shirt and scarf, he had separately sold a scarf or a shirt. This was done to almost all the merchandise bought at the very start of the business.

With the inventory mismanaged, discrepant accounts and loans on business Mr Bashir was thinking how best to tackle the current situation and what procedures and checks should he implement in order to avoid such wrong doings.