Page 239 - F1 - AB Integrated Workbook STUDENT 2018-19

The relationship between accounting and other business functions

Service provision

5.1 The nature of services

Companies very often provide services to customer, at the same time as the sale or
afterwards.

5.2 The features of services

 Intangibility – Services are activities undertaken by the organisation on behalf
of its customers and therefore cannot be packaged for the customer to take
away with them.

 Inseparability – services are often created by the organisation at the same
time as they are consumed by the customer e.g. a taxi driver will create the
service they offer as they are carrying a passenger to their desired destination.
The service cannot therefore be easily distinguished from the person or
organisation providing the service.

 Perishability – services cannot be stored for later.

 Variability – each service is unique and cannot usually be repeated in exactly
the same way, making offering a standardised service to customers very
difficult.

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