1. Financial Documents & Tariff Systems

2. DEFINITIONS: What is a bill?
A bill is a document that a company will send to the owner of a household to outline what the owner must pay for a particular service that the company provides for the household.

3. DEFINITIONS: What is a statement?
A statement provides a summary of the transactions (amount of money paid, or a description of items bought) for a purchase or service over a period of time.
The DEBIT side shows money that the person owes or has to pay to the stores.
The CREDIT side shows money that the person has paid, or money (refunds) that the store has paid back to her.

4. ELECTRICITY BILL

5. TELEPHONE BILL

6. STATEMENT WITH DEBIT AND CREDIT SIDES

7. Interpreting financial documents/ accounts
What to look for:
Date statement was issued
Statement period
Amount owing
Amount due/ monthly installment/ installment amount
Values including and excluding VAT
Installment/ payment due date

8. Interpreting financial documents/ accounts

9. Interpreting financial documents/ accounts

10. Common Household Tariffs
What is a Tariff?
A fee that is charged for using a service.
Any examples: Telephone tariffs, electricity & water tariffs.

11. Making sense of Tariffs:
How? By looking at the structure:
Lets compare cellphone tariffs:
Prepaid: with prepaid you buy the phone once off. Following that the only cost is airtime.
the negative is that it is a large amount once off. After the initial payment it is generally cheaper to maintain.

12. Making sense of Tariffs:
Contract: with contract you pay monthly instalments on the phone and receive a certain amount of airtime depending on your contract. This can be both positive and negative.
e.g. A R229 contract will give you a phone, R100 airtime, 25 sms’s and 150mb data.

13. In comparison: Type of tariff Payment Cost Benefit Negative Prepaid
Once off followed by your choice of “airtime”
Once off + individual need for airtime
Caters for individual needs
Cheaper call-rates
Large cost amount initially
Contract
Fixed monthly instalments over a set period
Certain amount of “free” airtime
Fixed instalment + monthly cost of calls
Payable in small amounts over a long period
Builds up credibility
End up paying much more for the phone
Call-rates are more expensive

14. Calculating Cost on Prepaid Tariff system
(only looking at the cost of the call, and not the cost of the phone or starter pack.)

15. Call Charges Peak Voice Calls. Mon-Fri 07:00 am to 20:00 pm.
Off-Peak Voice Calls.
20:00 pm to
07:00 am.
SMS Peak
SMS Off-Peak
R2.55/min
R1.40/min
80 cents
35 cents

16. Peak Time call lasts for 10min
Call Charge during Peak Time? =
Cost of the call? =
= R /min x 10min
= R

17. (Actual Cost)
R2.55/min
60sec/min
= R0.0425

18. Peak Time call lasts for 5min 20sec
Step 1:
Convert the call into seconds
(5min x 60sec/min) + 20 seconds
= 300 seconds + 20 seconds
= 320 seconds

19. Peak Time call lasts for 5min 20sec
Step 2:
320sec x R0.0425/sec
= R13.60

20. Calculating Cost on Contract Tariff system

21. Contract Example R100.00 per month fee
24 months (2years) contract time
100 anytime Minutes
30 sms

22. Call Charges (at any time of day)
Call Cost
SMS
R1.50 p/minute
50 cents

23. Contract call lasts for 7min 39sec
60 sec/min = R0.025 per second
(7min x 60 sec/min) + 39 sec
= 420 sec + 39 sec = 459 sec
R sec = R11.48 (rounded off)

24. Monthly Cost of Contract calls (at any time of day)
Call Charges
Monthly Subscription
Free Minutes
Call Cost
SMS
R100.00
100 minutes
R1.50 p/min
50 cents

25. 230minutes worth of calls during a month.
R Subscription fee.
100 minutes talk time free.
(230min – 100min free) = 130 minutes
Call Cost = R1.50 per minute
MC = SF + CC>100free minutes
MC = (R1.50x130min)
MC = R100 + R195
MC= R295

26. RECAP… Definitions – bill, statement, tariff.
Different types of accounts/ documents (interpret).
How to calculate call costs on different tariff systems.
Interpretation = financially aware individual.