MIDLANDS STATE UNIVERSITY

FACULTY OF COMMERCE

DEPARTMENT OF ACCOUNTING

AN INVESTIGATION ON THE IMPACT OF REVENUE COLLECTION

STRATEGIES IMPLEMENTED BY TELONE GWERU.

ISHEANESU KUDAKWASHE MUTUSVA (R168276Z)

 CHAPTER ONE

INTRODUCTION

1.0. Introduction

The research looked at the impact of revenue collection strategies implemented by Telone Gweru

on the service delivery. This chapter covered the background of the study, statement of the

problem, research objectives and finally research questions.

1.1. Background of the Study

Telone is a telecommunications parastal company owned by the Zimbabwe government , its

business is connecting people and businesses together through the provision of voice ,broadband

and data. Telone has been experiencing challenges in service disruption through the growing

increase in the rate of vandalism and theft of copper cables worth thousands of dollars. Telone

has also been facing challenges of ever growing debtors and debt recovery. The researcher would

want to look at the revenue collection strategies that are being used by Telone Gweru and their

impact to the provision of services.

Entities need robust revenue collection strategies in place that will ensure maximum revenue is
collected for the smooth operation of organizations, as noted by Kelly-Quinn, etal (2014), Zhou
and Chilunjika (2013), Makanyeza, Hardson, and Ikobe (2013). According to Zivanai et al
(2014),Agba et al (2014) and Mario (2014)the challenges that are faced by local authorities in the
provision of services is chiefly due to lack of innovation in as far as investment is concerned.

Table 1.1 Statistics showing budgeted income and expenditure for Telone Gweru.

TELONE GWERU
Description Year
2016 2017 2018
Budgeted
Income 16,880,301.00 18,823,292.00 46,821,680.00
Expenditure 9,109,356.00 15,869,567.00 46,417,390.00
Actual
Income 12,573,530.00 13,356,478.00 20,894,113.00
Expenditure 1,488,963.00 3,598,436.00 20,448,331.00
Income Variance % 0.26 0.29 0.55
Expenditure Variance % 0.84 0.77 0.56

Source: Telone Gweru Financial Statements

The diagram above reveals that Telone Gweru in 2016 collected less revenue than the target
revenue. This is so because the organization is not improving or revising its revenue collection
strategies and they constantly do not meet their targets. However in 2016 three quarters of the
revenue collected was after an aggressive debt collection strategy and also the decentralization of
debt collection efforts. In 2017 there was a 14% increase in revenue due to the translation of the
company's strategy to diversify the business from a purely fixed telephone offering to a fixed
mobile converged business anchored on broadband.

1.2. Statement of the Problem

Telone Gweru has a challenge of low revenue collection, higher expenditure and growing
uncollected debtors. This has a bearing on the provision of services and there is need for Telone
Gweru to come up with clear, robust revenue collection strategies to improve service delivery
and prevent service disruptions. It is against this background that the researcher would want to
investigate the impact of revenue collection strategies by Telone Gweru on service delivery.

1.3 Main Research Question

What is the impact of revenue collection strategies that have been implemented by Telone Gweru
on the provision of services?

1.4 Research Objectives

 Establish the revenue collection strategies implemented by Telone Gweru.

 Establish challenges being faced by Telone Gweru in implementing revenue collection

strategies.

 Analyse the effectiveness of revenue collection strategies in place on service delivery.

 Establish other strategies that can be implemented by Telone Gweru to enhance revenue
collection.

1.5 Research Questions

 What are the revenue collection strategies that are implemented by Telone Gweru?
 What are the challenges that are affecting Telone Gweru revenue collection strategies?
 How effective are the revenue collection strategies that are in place on service delivery?
 What other strategies can be implemented by Telone Gweru to enhance revenue
collection?
1.6 Delimitations

This research is going to be centred on the revenue collection strategies that are implemented by
Telone Gweru to collect from residents for the period from 2017 to 2019. The research will be
focused on Telone Gweru which is located centrally in Zimbabwe and it will be centred on the
revenue collection strategies. The population consist of Telone Gweru management and
residents.

1.7 Significance of the Study

The research will assist the researcher to acquire and broaden knowledge on the revenue
collection strategies in telecommunication entities. The research will also be used as literature by
other researchers and can be used as point of reference. The research will be used as the basis of
fulfilment of a degree programme by the university. Recommendations to this study will be used
by such entities as a basis for future crafting of revenue collection strategies to improve on their
financial stability and improve service delivery.

1.8 Limitations

 Unavailability of key management – the researcher is going to make appointments to

meet them when they are free.

 Confidentiality of information – the researcher will explain to management that the

information will be used purely for academic purposes.
  Difficulties in accessing information - The researcher is going to use management
reports, minutes and publications as they are equally useful sources of information.

1.9 Assumptions

 That the respondents will cooperate in providing information to the researcher.

 Information obtained from the targeted population will be truthful and reasonably
helpful.

 Telone will continue to operate indefinitely.

1.10 Definition of terms

 Revenue is the income generated from normal business operations and includes discounts

and deductions for returned merchandise

 Telecommunication the transmission of information, as words, sounds, or images,

usually over great distances, in the form of electromagnetic signals, as by telegraph,

telephone, radio, or television.

 Entity is a business that has separate and distinct existence objective or conceptual

reality.

1.11 Chapter Summary

This was an introductory chapter and dwelled much on background of the study, statement of

the problem, objectives of the study, research questions, limitations, delimitations as well as

definition of terms. Chapter two will look at literature review.