UWaterloo Housing

PostcardThe Department of Housing and Residences at the University of Waterloo is smart, money wise. I was astonished to see a personalized postcard that included my name, my program, and a link to the online application form for residence for the Winter 2008 term. Usually, we are required to apply approximately four months prior to the start date, but this time, they are almost four months early. I was wondering why until I saw a lot of desks outside of Village 1, one of the residence communities. The next day, I saw a large container and desks were thrown in it. I hope they will recycle the wood and use it for other purposes. Those desks are not too old, but some of them have plastic overlays that are ripping and some of them have writings under them. With all those desks going for recycling, the department will need to make a huge purchase for new desks. Therefore, they want our $500 non-refundable deposits. I really liked the personalized card, so I applied on the first day that it was available. Within two days of applying, I received an offer and payment options. Luckily, I have my Citi Enrich Mastercard, so I’ll be getting $5 cash back. I’ve also purchased $500 worth of books, so I’m already at $10 in total. Having this card is wonderful, I highly recommend it to everyone. Too bad the university doesn’t allow tuition to be paid by credit card. Back to the topic, why are they smart money wise?

They are smart because they are maintaining or attempting to maintain a positive cash flow. The purchasing of desks should be classified within the operational cash flow because furniture maintenance is one of the department’s core business activities. Cash flow is a short-term benchmark, so it’s a good idea that they are receiving their deposits before spending, which avoids the incurrence of debt. However, they will need to watch their spending until the Winter 2008 term approaches or until they receive full residence payments. Finally, I am satisfied that I have a place in residence already. Their postcard also made me feel special when it read, “You’ve got Priority! Students currently living in residence…” And I’m glad that the first year students coming in for the Fall will have new desks if they chose to live at V1.

What did I learn from this?

Maintaining positive cash flow averts debt. For example, I only use my credit card for the cash back feature. I will always have enough in the bank to fully pay the monthly bills. So it’s good to budget the amount of spending for every month.

For businesses:

  • Personalized advertisements is a good marketing technique
  • Non-refundable deposits provide the business with confidence in the customer
  • Deposits also “bounds” the customer (they will lose money if discontinue)
  • Deposits increase cash flow

For customers:

  • The customers feel special from targeted advertisements
  • It satisfies the customers because their good (in this case, residence room) is secured by the deposit
  • (Future) customers will benefit from the improvements made by the business

Wow, I am learning from the university apart from my lectures, this is good!

Source: Wikipedia – Cash flow

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