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Manage Finances

Assessment Task 1

Question 1 

Financial probity is the evidence of ethical behavior in a process. Identify three principles and three requirements related to financial probity?

Scrupulousness is the evince of virtuous behavior, and can be demarcated as ample and confirmed veracity, decency and rectitude in a finnicky administer.

 The principles underpinning ethics and probity in Australian Government Procurement are:

  • Virtue and skirmish of curiosity requirements should be applied with seize and proportionate trials cognizant by sound peril management ideologies.
  • Secret information must be treated appropriately during and in quest of attacking process.
  • External probity mavens should only be appointed where justified by the nature of the locating.
  • Officials must not make crooked use of their standpoints. 
  • Bureaucrats should ignore serves themselves in a stance where there is the budding for prerogatives of preconceived notion.
  • Officials must not accede cordiality, largess or fundraisers from any conceivable purveyors.

Virtue Chucks

         When commencing civic Edifice Procurement, Bureaus must:

  • (a) demeanor Communal Erection Procurement in modus that is harmonious thru Unrestricted Zone Tenets;
  • (b) extravagance enflamed accomplices (and potential sore applicants) legitimately and uniformly, and dodge giving one fond partaker an indecorous pro over another;
  • (c) uphold concealment of contributor discretion tidings, embracing commercially subtle tidings and highbrow stuff;
  • (d) ensure sore means, parleys, valuation tricks, and shrivel management knobs are auditable, translucent and blamed; and
  • (e) proactively isolate and handle skirmishes of interest whether authentic, impending or professed aptly and in accordance with germane licit and dogma chucks, including pertinent Victorian Public Sector ciphers of comportment.

Question .2 describe the principles of accounting and financial systems?

 accounting principles is the guidelines which is to be followed by company while preparing accounts.

The principles of accounting are

    1. Conservatism principle this principle says that at the time of preparing accounts we consider our future losses.
  •  Consistency principle this principle says that we use only one accounting method throughout the year.
    1.  Business entity principleacc. To this principle business is to be treated separately from is owner.
  • Going concern principle- acc. To this principle our business life will never end. our business will remain continue even after the died of its owner.
  1. Matching principle- according to this principle, there is a dual entry of every transaction. Every transaction as its own debit and credit.
  2. Cost principle- according to this principle, every business records their assets, liability, equity at its original cost, at cost it purchased not at the present cost either current price is less or high.
  3. Full disclosure principle- according to this principle, every information related to company , which affects the business or transaction which is not recorded but that is necessary for company should be fully disclose.

Question 3 Explain legislation and conventions relevant to financial management in an organization ,including:

  • Australian legislation and conventions
  •  International legislation and conventions
  • State/territory legislation and conventions
  • State/Territory legislation and conventions:

Australian regimes and state and territory leaderships code subsist to shield patrons as well as to indorse unbiassed swapping and antagonism. These lawmaking rule how businesses interact with their suppliers patrons and erstwhile businesses.

Antagonism Edicts

Australia has a federal legislative scaffold to ensure that trafficking is fair for businesses and consumers. This charter is oversaw and obligatory by the Australian Competition and Consumer Commission (ACCC).

         Product liability regulation

  Australia has its own policies and framework synchronize product security and        confidentiality. These standards are formed to protect the safety of harmful products to not to advertised these harmful products in the Australian market.

  •  Australian legislation and conventions:

 Guidance on tax and superannuation measures-

As per Australian government which governed rules or we can say legislations, whenever new tax regimes and superannuation gages they provide practical tactics to their taxpayers and made available practical supervision for them so that the taxpayers understand which byelaws they have to follow- its old law or attempt to forestall insinuated vagaries.

Mention their clerical approach to precise ex post facto laws. Their advice covers their routes want to opt along with their collaries of preferring the options.

It also includes how the law supervise and done supervision of that law by them thru the retro until the decisive upshots emanates from the anticipated edict.

Transformation hikes tax bursar Jinxes-

What it says until and unless the pertinent law has made or relevant jurisdictive catalyst made would hike the liabilities of taxpayers and they don’t have any right to hoard it or higher. It also mentioned that in effect law has changed from retrograde then the taxpayer ones should be pursue modifications and should recompence with astronomical jinx

Transformation slashes taxpayer Jinx-

A projected commandment change would lessen your burden, you should personally gauge under the old law. If taxpayer personally assess revisions by antedating existing law, we may not compel defiance with prevailing law but we thwart indecorous reimbursements. We have the supremacy to plump whether or not it would be a professional, operational and virtuous enervation of the ATO’s possessions to urge acquiescence in effect edict where a taxpayer chooses to self-assess by foreseeing an announced law swap.

The one exemption accustomed canon to this general regime applies if both the ensuing musts are met:

  • Letting taxpayers to forestall a heralded law modify would be likely, in some cases at least, to result in a recompense of tax.
  • The Commissioner can, before a disbursement is made, reasonably identify fussy taxpayers to whom a disbursement would be made who have applied the law incorrectly.

© International legislation and pacts:

The international law is hallowed in concords, truces and canons. Many of the agreements brought about by the United Nations form the root of the law that reigns kin among realms.

Some   of   these   concord   form the very underpinning of the law dominant relations among states. Examples include:

  • the pact on the Non-course plotting Uses of global Watercourses, adopted by the General Assembly in 1997, which validates the fair and astute misuse of rivulets pooled by two or more countries;
  • the concord on the Law of Truces between federations and transnational officialdoms or between International Organizations, adopted at a conference in Vienna in 1986;
  • the Caucus on the progression of States in Respect of State Property, Annals and arrears, espoused at a symposium in Vienna in 1983;

Question 4. Outline the requirements of the Australian Tax Office (ATO), including: a. Goods and services tax (GST) b. Company tax c. Pay as you go (PAYG) tax.

Australian tax office (ATO) is a revenue collecting body of govt. It collects income tax, goods and service tax,etc. The gst on goods, services, and other items sold is 10%.

Australian tax office is used to report and pay GST (goods and service tax) , PAYG (pay as you go) and other taxes. All businesses register for GST must required to fill business activity statement before the date of lodge.

Question 5 What legislation applies to fraud and the misappropriation of funds?

Misappropriation of funds is the use of other persons money in illeagal or unauthorized work without knowing them. It can be done by any trustable instituted, public officers or any person who is responsible for the safety of another person’s property,money etc. It is type of unlawfull activity, for this activity that person is punishable.

 Firstly government give a chance to victim of missapropiation to recover his loss and after the legal and civil process starts. In that every person who is involve in fraud and misappropriation will comes in guilty. American court adopt a practical, logical approach while investigating of frauds and The maximum punishment for this offence is imprisonment for seven years.

Question 6 Explain the need for financial due diligence and outline what actions may be included in a financial due diligence review.

Financial due diligence involves an investigative analyse of business which is used for maintanable of profit and cash flow. it helps in identify financial risk for company. 

It helps in identyfing targeted company financial position and also helps in knowling hidden libility of company such as contingent liability which is not included in financial statement.

This not only use for knowing current position in market but also for knowing future position and stability of company.

Question 7 Explain how you use Profit and Loss statement, Cash Flow and ageing summaries to manage issues that will affect the organization’s ability to meet objectives?

A profit and loss statement (P&L), or income statement or statement of operations, is a financial report that provides a summary of a company’s incomes, outlays, and profits/losses over a given period of time. The P&L proclamation shows a company’s knack to spawn vending, muddle thru overheads, and crafts gates.

Example Profit and Loss Statement (P&L)

Beneath is a paragon of Amazon’s 2015-2017 P&L assertion, which they sojourn the fused avowal of Maneuver

Beholding at the o’er paradigm, we drift that Amazon announced a yield of $596 million in 2015, a return of $2.4 billion in 2016, and a revenue of $3.0 billion in 2017.

 Analyzing the Cash Flow Statement

The proclamation of cash flows cabarets how much dough a camaraderie spawned and frenzied over a epoch of stint.

 It entails of three chunks:

 cash from maneuverings,

 cash luxuriated in arming, and

 cash from bankrolling. This avowal is weighty for finning:

  • The companionships kneck to spawn cash from tactics 
  • Gratis doughs roll cohort
  • How copious dosh has been fostered (debt and or equity)
  • The lattice revolution in cash stance over the interlude
  • The boon and remnant of dot cash offset.

Question 8 Explain how forecast analyses and analyses related to budget preparation will enable you to contribute to financial bids and estimates?

There are four typographies of conjecturing logics that pecuniary predictor luxuriates to prophesy forthcoming returns, disbursements, and hub harms for a business.

(1) straight-line, (2) moving average, (3) simple linear regression, and (4) multiple linear regression.

STRAIGHT LINE

Zenith budget (orthodox streak) modus

Under the crucial suffering modus (also known as the purist stripe mode), asset cast-iron volume per capita year based on the following formula:

Asset’s cost × (days held ÷ 365) × (100% ÷ asset’s effective life)

Note: ‘Livings detained’ is the number of days you alleged the endowment in the pay packet year in which you cast-off it or had it instated inclined for service for any intent. Days held can be 366 for a leap year.

Example 1: First-Rate price-tag approach

If the boon disburse $80,000 (later omitting GST if dubbed to prerogative it) and has an useful vivacity of five years, you can contention stab 20% of its endeavor, or $16,000, in each of the five years.

The expense embraces the amount you paid for the asset as well as any additional amounts paid for transport, installation or making it ready to use.

The calculation is:

$80,000 × (365 ÷ 365) × 20% = $16,000

The detriment includes the amount you paid for the asset as well as any additional amounts paid for transport, installation or making it ready to use.

The calculation is:

$80,000 × (365 ÷ 365) × 20% = $16,000

Assessment task 2

Task one 

Prepare a plan and time line for organization budget

Plan for organizational department budget, the process that has been followed-

Determine budget policies and procedure for the year 2017/18

 In the following process BizOps Enterprises considered all the corporate governance policies and objective for determining the current year budget. The manager required to assemble previous budget experience and budget formation, analyse the strength and weakness of the organziation. Then select the budget period for reaching the optimum resources objective and goals of the company.

Set up budget committee

Under this process the management considered the various department manager for enrollment of the budget for forecasting process and considered each department representative that make decision regarding the budget and embed further changes as if required. The duties and responsibilities that has been followed by committee member will be meeting session, communicating the budget effectively, building coordination between the department, limiting the factors and establishing timeframe for the budget execution and at last they are engage in monitoring process after implementing the budget.

Assumption and forecasting preparation

By using various data sets and the previous experience and cost benefit measurement the assumption and forecasting has been embed by the manager. The statistical tools and quantitative method that is regression and moving average and expert advice has been followed for managing assumption and forecasting.

Produce functional and operation budget 

Under this all the department provide projected budget and then it is considered by the committee. The set-up committee check the feasibility and projected budget reality. Then committee embed performance and recommendation. If all the set has been followed well then it has been approved by the committee.

Produce master budget 

The master budget has been producing by the committee and project all the department budget into profit and loss and forecasted balance sheet for the company. Then submit to senior management for approval.

Get approval from the senior 

The senior management during analysis check feasibility of the budget with long term and short-term plan of the company. Then delivered to the CEO for the approval and get undersigned and produce to committee later for effective communication to the employee.

Implementation of the budget 

After completing all the procedure, the budget will later implement in the organziation. It is duties and responsibility of the committee to keep eyes on the budget functioning and amend changes and corrective action whenever it is required.

Budget time frame 

Task Responsibility Start timeCompleting time
Determine budget policies and procedure for the year 2017/18All department manager 1 March 20183 March 2018
Set up budget committeeSenior manager 4 March 20185 March 2018
Assumption and forecasting preparationBudget Committee6 March 201811 March 2018
Produce functional and operation budget All department manager 12 March 201814 March 2018
Produce master budget Budget committee 15 March 201817 March 2018
Get approval from the senior Senior manager 18 March 201820 March 2018
Implementation of the budget Budget committee 21 March 201822 March 2018

Task two 

Prepare a financial report that includes requirements to undertake budgeting, financial forecasting and reporting financial management and promotes the direction that future budgets

 Introduction 

 The financial report consists of all the factors that affect the BizOps Enterprises financial stability and financial growth of the company. In the financial report the goals and objective related to the revenue generation and the five-year plans has been mentioned that target the company vision in near future and standard they want to set through bringing consistency in the financial report. In this financial report we discuss about the variable that has been leads to undertake budgeting, financial forecasting and financial management for future growth of the company as well bringing accuracy in the budget.

Objective and goals of the BizOps Enterprises for financial stability 

  • Increase revenue by 15% (compared to the previous 12 months) by the end of the financial year.
  • Maintain annual profit levels of 15% of revenue for all products and services, calculated at the end of each financial year.
  • Reinvest 75% of profit back into the business at the end of each financial year.

Trend analysis for five-year cash flow 

Cash flow trends for five year 
 2018/192019/202020/212021/222022/23
Receipts     
1,11,8311,17,7161,32,9131,34,3491,02,354
Total receipts1,11,8311,17,7161,32,9131,34,3491,02,354
Payments     
To suppliers60,18063,34866,68270,19257,682
Payment to employees     
34,10235,89737,78639,77623,581
Capital purchases     
14,96515,89818,59113,89118,567
Total payments1,09,2471,15,1431,23,0591,23,85999,830
Cash ink/(dec)     
2,5842,5739,85410,4902,524
Cash at the beginning     
28,01430,59833,17143,02553,515
Cash held     
30,59833,17143,02553,51556,039

Financial information 

 The company has been focussing on the increase the operational cash flow and projection activities. so, in the given forecasted cash flow trend for next five year illustrate the peculiar growth rate in the cost margin. As company has been adhered to increase the 15 % revenue within the company and expect payback return for 75% the cash flow trend delivers that feasibility to reach the goals and objective.

Statutory requirements for compliance and tax liabilities

 The requirement of the compliance and tax liabilities can be done through implementing Australia taxation regulation that can be amend certain rules and regulation for the statutory taxation procedure and certain liability based on GSTRN if the organization indulge in purchase and sale of the goods and services. That involves transaction in between the state. The compliance based on risk has been applied is AS/NZS ISO 31000:2009 Risk management.  The PAYG and company tax has been filled as according to business activity statement and declaration has been made after paying their income tax liability.

Existing software 

The existing software that has been used by the company for managing the financial reporting requirement is MYOB and zero accounting software that has been installed for managing the bank statement, audit requirement and compliance and budget management in the department.

Task three 

  1. Demonstrate analysis of the
  • net profit margin  

net profit /revenue = 13,282/150,000=0.088

    • net profit ratio
  • net profit /revenue*100 = 13,282/150,000=0.088*100=8.854% 
  • cash flow return on assets

operating cash flow/ total assets 

=975/9,456=0.103

  • return on owner’s equity ratio

net income/ equity 

13,282/8,107=1.63

 These are the current year performance of the company.

  1. Horizontal analyses
Profit and loss for two year 
 2016/172017/18increase/ decrease percentage 
TOTAL INCOME1,34,5201,50,00015,48012%
operating expenses     
Payment to suppliers4,83977,00072,1611491%
Salaries & on costs5,21846,00040,782782%
Marketing & sales 2353,0002,7651177%
Accommodation566726161100%
Communication151801651100%
Governance364323961100%
Administration192402211163%
Consumables151801651100%
Other staff related162282121325%
IT, repairs & equip. Hire 212402191043%
Depreciation3754,3653,9901064%
TOTAL OPERATING10,8451,32,5371,21,6921122%
EBIT2,32917,46315,134650%
Interest on investment 1861,7881,602861%
Dividends on investment 052520%
Unrealised gains/(losses) on investments5732-25-44%
Profit (Loss) on sale of assets0000%
Charity -30-360-3301100%
EBT2,54218,97516,433646%
Company tax05,6935,6930%
Net Income2,54213,28210,740423%

As per the following horizontal analysis that demonstrate that with difference of two-year profit and loss it illustrates that the company has been total income increase by 12%. The other operating expenses is also showing increment in the profit and loss account. The net income has been demonstrated as 423% increase in the margin if the budget has been implemented as according to the projected budget.

Major variance in the profit and loss 

The major variance is in- 

Operating expenses of the company that include diversified expenses based on marketing and sales, administration, consumable and other expense. In these items some are consist of favourable and unfavourable variance.

Sales and total income of the company has unfavourable variance in the profit and loss as compare to actual budget.

The net income of the company has also showing unfavourable variance of –19,624.

Current position of the company

The current position of the company as compare to the cash flow trend will be consist and showing great growth as during 2016/17 the firm has been showing steady growth of 12% as shown in the horizontal analysis. The statement of profit has also showing proper utilization of resource and aspiring the projecting budget to meet the organziation five-year goals. The company receipt has been increased by 145390 as compared to previous year cash flow trends. The cash holding has been increasing by 58260 as compared to previous year performance.

List of recommendation 

 The list of recommendation that has been prepared for the ongoing financial viability is-

  • Increase the sale margin and control the overhead of the companies.
  • Follow and suggest the forecasting of the budget as per the requirement 
  • Use increment budgeting for effective budget formation 
  • Necessitate all the required benefit and analyse the market thoroughly.
  • Increase investment and take risk for higher return.

Task Four

A forecasted cash flow budget for the 2017/18 financial year

 JulyAugustSeptemberr OctoberNovemberr Decemberr JanuaryFebruaryMarchAprilMayJune
Receipts528965006500695865896325690070007,9356,8017,9359,069
Total Receipts528965006500695865896325690070007,9356,8017,9359,069
Payments to215925622396256332563569300036983921275536673839
Suppliers
Payment to300030003256369233693325312635003376351536484522
Employees
Capital Purchas es1500120011001000110013009999949899645121
Total Payments665967626752725577258194712581928286636673608482
Cash inc/ (d ec)-1370-262-252-297-1136-1869-225-1192-351435575587
Cash at the beginning400004500045963492365000054089554895569357,01456,66357,09857,673
Cash Held413704526246215495335113655958557145688557365562285652357086

A forecasted profit and loss budget for the 2017/18 financial year

 2017/18
TOTAL INCOME1,80,000
operating expenses  
Payment to suppliers78,000
Salaries & on costs46,000
Marketing & sales 3,000
Accommodation700
Communication180
Governance500
Administration240
Consumables180
Other staff related228
IT, repairs & equip. Hire 240
Depreciation4,365
TOTAL OPERATING1,33,633
EBIT46,367
Interest on investment 1,800
Dividends on investment 52
Unrealised gains/(losses) on investments32
Profit (Loss) on sale of assets100
Charity 800
EBT18,975
Company tax5,693
Net Income18,915

A forecast balance as at 30 June 2018.

Budgeted balance sheet as at 28 February 2018
 2015/16 Actual at 30 June2016/17 YTD2016/17 YTDVariance2017/18 Budget at 30 June
2016ActualBudget2018
($ ’000)($ ’000)($ ’000)($ ’000)($ ’000)
BALANCE SHEET 
Cash & bank deposits53,51556,03958,698-2,65960,000
Receivables3,5203,8923,6002924,000
Inventories23,68032,12025,6006,52025,900
Other current assets2,4682,6982,5001982,500
Total current assets83,18394,74990,3984,35192,400
Non-current investments1,45,6981,58,1231,52,0006,1231,62,000
Plant & equipment32,00036,98238,000-1,01840,000
Intangible assets8,9009,0009,000010,000
Total non-current assets1,86,5982,04,1051,99,0005,1052,12,000
Total assets2,69,7812,98,8542,89,3989,4563,04,400
Current liabilities16,58419,84418,5001,34418,500
Non-current liabilities8979859805980
Total liabilities17,48120,82919,4801,34919,480
Net assets2,52,3002,78,0252,69,9188,1072,69,918
Total equity2,52,3002,78,0252,69,9188,1072,69,918
Extract of balance sheet detail
 2016/17 YTD2017/18
ActualBudget
($ ’000)($ ’000)
Current liabilities
Trade creditors2,3302220
Net GST payable2,5902500
Sundry creditors740700
Unearned revenue00
Annual leave provision5,4655465
LSL provision < 1 year3,8633863
Salaries clearing3,5503600
Group tax clearing6670
Superannuation clearing1,2401260
TOTAL CURRENT LIABILITIES19,84419678
Long service leave > 1 year985985
TOTAL NON-CURRENT LIABILITIES985985
TOTAL LIABILITIES20,82920663

Task five 

Plan for managing risks and dealing with contingencies 

  1. key financial risks to the organisation
  • Overlapping of budget 
  • Mishappening and increasing in wastage 
  • Natural calamities
  • Economical fluctuation 
  • Increase in debt 
  1. Contingency plan for identified financial risk 
  • Monitoring and management of the budget to stop overlapping 
  • Taking corrective action whenever the cost and revenue is showing error and does not match with predetermined objective
  • Analyse the market and economic zones for better planning and preventive measures from the market risk
  • Store some funds in reserve so that at time of crisis it will help out to make settlement
  1. The misappropriation of funds can be tackle through timely monitoring and controlling the management and employee action. So that any inappropriate action will lead to be manage soon and ensure the fund has not been overutilized.
  2. company use the financial system that record the transaction that is excel and MYOB and other software for efficient recording. Hence, through that the recording has been properly made.
  3. The audit trail can be maintain through monthly auditing of the accounts and serve the information to the user and the investor to maintain the trust between them.
  4. The discrepancies between agreed and actual term will be illustrated through the use the difference between both the budget. It can be either unfavourable and favourable.
  5. The transaction and budget can be proceed in accordance to due diligence process so that all the transaction has been examined and functioned effectively.

Task Six

Produce a report that makes recommendations on financial management

 The financial report has been well structured and marginalised in accordance to year to data and month to date for better understanding. All the statutory requirement that is taxation norms, company tax, risk management standard has been followed under the ground of operation and no avoidance of any clause amended by ATO has been neglected.

Significant issue in the statement is

The statement has been fully confined with information and minor issue that is having in making cost decision for several expenses. As the charity item, dividend that can be illustrated through mere market effect and requirement. It can eliminate from list in several times. Hence, these are issue I have been faced.

Recommendation for financial viability 

  • Increase the sales and net income of the company by better practices and operation 
  • Ensure coordination and financial strengthen for improvement and consistency
  • Use increment budgeting for effective budget formation 
  • Necessitate all the required benefit and analyse the market thoroughly.
  • Increase investment and take risk for higher return.
  • Follow the statutory and compliance for smooth functioning 

Effectiveness of financial management process 

The effectiveness of financial management process is accurate result, increase transparency, encourage more institutional investment, higher the operational efficiency, increase consistency and reliability in the performance of the company.

Task seven

Audit checklist 

Satisfactory Not satisfactory 
Did the company has been using the appropriate software for recording 
Employees are considerate toward their task 
All the compliance and regulatory has been followed 
Safety and security of the data base has been managed in the organziation 
Does the reporting system of the company is strong 
Does the company have been attending the turnover base accurately 

Assessment task 3 

 Role play observation 

For this task an organization has to choose that is WES based on Australia, the consultant finance officer has been delivered the feedback and gathered the information about the BizOps Enterprises as according to other groups 

Being a finance manager of the BizOps Enterprises the mere budget that has been prepared for the year 2017-18 has been submitted to the finance officer.

All the budget has been consisting of required detail that has been allocated in the department that the company consist. The budgetary function has been performed through using the software and the expert advisor and also through statistical measure.

As you have been seen in the document all the item has been arranged in an order and settle with comparability form so it is easy to understand and remark the changes.

So, as per the discussion I am asking you fill the peer reviewed form as framed in the document based on our performance.

BizOps Enterprises Peer Review Form

[Samuel Andrew]

FairGoodExcellent
1. The performance was organised according to the BizOps Enterprises plans, policies and procedures related to financial management Good 
2. The information was presented in a logical manner with insights into the preliminary budget and recommendations. Excellent 
3. The language used was clear and concise.Excellent 
4. The performer had good eye contact with the audience and used positive body language.Good 
5. The performer listened to questions and answered appropriately.Good 
Comment (if any)

 The overall performance of the company is excellent and present the statement properly in an order. The company should use project agile for measuring the cost for the project budget.

References 

Luceri, B., Laurini, F., & Latusi, S. (2020). Store flyers: managing spatial distribution under budget constraints. International Journal of Retail & Distribution Management.

McCarthy, C. (2016). Innovative strategies prove effective for managing personnel, budget, enrollment challenges. Student Affairs Today19(5), 12-12.

Messer, R. (2020). Budget Management Decisions. In Financial Modeling for Decision Making: Using MS-Excel in Accounting and Finance. Emerald Publishing Limited.

Newell, B. R., Kary, A., Moore, C., & Gonzalez, C. (2016). Managing the Budget: Stock‐Flow Reasoning and the CO 2 Accumulation Problem. Topics in Cognitive Science8(1), 138-159.

Olaniyan, N. O., & Efuntade, L. O. (2020). Budget and the budgetary control system in tertiary institution’s financial performance in Nigeria. KIU Interdisciplinary Journal of Humanities and Social Sciences1(2), 281-302.

Perdikaki, O., Kumar, S., & Sriskandarajah, C. (2017). Managing retail budget allocation between store labor and marketing activities. Production and Operations Management26(9), 1615-1631.

Assessment Task 1: Written questions 

Explain the four main taxation and superannuation obligations for a business. Briefly discuss each obligation

 

  • Australian business number (ABN):- Examine gaining an ABN for their employment. An ABN manages with their expense and employment commitments, as well as utilized as a source of perspective by the Australian Taxation Office (ATO) for their employment.
  • Goods and Services Tax (GST) :- GST is a wide put together duty of 10% forced with respect to most merchandise, administrations and other they may need to enroll for GST. 
  • Business Activity Statement (BAS):- They should hold up movement proclamations with the ATO to address and  allowance their tax. They can do this linked through the ATO Job Portal. (Kaye et. Al., 2014)
  • Superannuation ensure commitments:- As a business, they can this one allowance arranged  least dimension of superannuation for every one of their qualified workers, or profit a charge to the ATO. (Farvacque et. At., 2014)
  1. Answer the following questions relating to GST in Australia: 
  2. a) When does a business/enterprise and non-profit organizations have to register for GST? 

They should enlist for GST when:- 

  • In the event that they have recently proceeding another business and assume that it should attain the GST revolution limit or extra in the main span of activity. 
  • In case they are as of now in employment and have achieved their limit – check every month to see whether they have achieved the end , or are apparently going to beat it. (Jurevičienė et. Al., 2012) 
  • Under 21 days of their turnover beat the significant border.
  • When do you need a tax invoice to claim a GST credit? 
  • They can  request GST approvals if the following circumstances apply.
  • They aim to use their asset solely or not completely for their employment and the asset does not recite to making profit-taxed materials. (Bhandari & Iyer 2013)
  • They arranged or are responsible to provide amount for the product they buyed.
  • They have a expense statement from their dealer (for assets more than A$82.50).
  1. c) What eight details must be identifiable on a tax invoice for sales over $1,000? 

      The eight details are:- 

  1. That the record should be a tax statement.
  2. Identity of the retailer.
  3. Australian Business Number of Retailer (ABN).
  4. Duration of issuance of the statement. (Farvacque et. At., 2014)
  5. A brief description of the products sold, including the amount and price (if applicable).
  6. The GST quantity payable can be set out individually..
  7. To what extent each invoice sale is a taxable sale (i.e. to what extent each sale contains GST) 
  8. Identity of the consumer or ABN
  1. d) What accounting method would a small business with an aggregated turnover of less than $2 million use to account their GST? 

The bookkeeping strategy utilized for GST when turnover is not exactly $ 2 million can either utilize a money technique or a non-money technique for bookkeeping. (Bhandari & Iyer 2013) In the money strategy for bookkeeping GST is paid when the money is really gotten or paid for the deals and buys made. 

  1. 3. Outline what is defined as a ‘company’ by the Australian Tax Office. Include the taxation requirements for a company in your response. 

An Company is a legitimate substance with greater expenses to set up and oversee. While an organization offers some advantage insurance, its administrators might be legitimately at risk for their activities and, now and again, the organization’s obligations

Tax assessment Requirements:- 

  • Must apply for a Tax File Number (TFN) and use it while presenting an Australian Business Number (ABN) Annual Tax Return whether it is enlisted under the 2001 Corporations Act. 
  • A organization that isn’t enlisted under corporate law may enlist for an ABN on the off chance that it works in Australia, if its yearly GST turnover is $75,000 or more, it must be enrolled for GST. (Farvacque et. At., 2014)
  • Paying their pay charge through installments as you go (PAYG).
  • Answer the following questions relating to Pay-as-you-go (PAYG) in Australia: 
  1. a) Explain the difference between PAYG withholding and PAYG Income Tax Installments. 
  • PAYG Withholding is for the most part charge retained from workers’ compensation or result however it can likewise be retained from providers who have not given their Australian Business number (ABN) to them or from contractile organ with whom they have gone into willful assentions to retain sums from their installments to them. (Kaye et. Al., 2014) Though PAYG ITI are installments in sensor for individual or potentially organization salary income upgrade and are paid by concern proprietors, speculators and sub-declarer who procure a specific measure of pay. Paying PAYG ITI helps them to meet their pay charge commitments by enabling them to rearranging installments in movement quarterly as opposed to making one goon measure of cash installment at year’s last for example this helps with hard income. (Jurevičienė et. Al., 2012) 
  1. b) If you make payments subject to withholding, what are the five things the Australian Tax Office requires a business owner to do?
  • They must vault for PAYG retaining charge before them are first required to retain a sum from an installment. 
  • If they stop to be a business they should drop their PAYG retaining modification. 
  • Before they go into a bit of work assention or contract, they have to watch that the specialist is lawfully permitted to work in Australia. 
  • PAYG retaining is diverse to finance charge. Finance charge is a State Department charge. 
  • Preserve the right records.
  1. Explain the principle of cash accounting. Include two advantages and two disadvantages of cash accounting in your response. 

Money strategy for record articulation is a kind of bookkeeping which centers around hard quick installment inflow and Cash surge. (Bhandari & Iyer 2013) Also, toward the day’s end, money bookkeeping framework encourages us disclosure out how much lucre money an occupation has earned amid a specific timeframe. 

Advantages 

  • If they pick money bookkeeping, it’s the easiest on the grounds that you will just book managing that are identified with money. Other exchange won’t be taken into accommodation. (Stiglitz, 2015).
  • Contrasted with that support of money bookkeeping is truly simple. They will record receipts when money is gotten from customer and they will record cost when money is paid to provider. 

Disadvantages 

  • Few organizations pursue money bookkeeping, yet it’s anything but a perceived technique under Companies Act. (McCarthy et. Al., 2012)
  • Since money bookkeeping just records money exchanges, the business can be associated with unjustifiable practices by camouflage the tax assessment or swelling the dispensing.
  • Explain the principle of accrual accounting. Include two advantages and two disadvantages of cash accounting in your response.

 

Accumulation bookkeeping alludes to that framework wherein the exchanges are recorded in the books of records as and when they happen, independent of the money got or paid. (Gitman et. Al., 2015)

Advantages:

It is reasonable for organizations that don’t pay or get installments on a prompt premise i. e the ones that do credit deals and buys a great deal. 

It gives a genuine and reasonable picture of business exchanges. 

Disadvantages: 

This is thorough and mind boggling when contrasted with money bookkeeping. 

It is hard to keep up and requires effective bookkeeping staff. (Goodhart et. Al., 2013)

  1. Describe the following terms: 
  2. a) Financial accounting 
  3. b) Management accounting 
  4. c) Accounting standards 
  5. d) Financial accounting system 
  • Financial bookkeeping alludes to the procedure of accumulation and recording of money related data so as to take proper budgetary choices. 
  • Management bookkeeping alludes to the way toward gathering, examining, deciphering and conveying monetary, non-money related and financial data to help the best administration in taking viable and auspicious choices. (Farvacque et. At., 2014)
  • Accounting benchmarks allude to those rules and system of money related revealing which help a firm to record and present their monetary reports conveniently. These are created by the Australian Accounting Standards Board. 
  • Financial bookkeeping framework alludes to the different division which monitors money related exchanges of an organization. (McCarthy et. Al., 2012) This records translate and investigate the budgetary exchanges conveniently and helps in the detailing of money related reports
  1. What type of entity must have their financial report audited? 

The expansive associations that fall under Incorporated Associations Act and extensive foundations with a yearly turnover of more than $ 1 million should be reviewed compulsorily. (Kaye et. Al., 2014) Little exclusive firms, firms enlisted under speculations conspire and uncovering elements need not complete their review.

  1. 9. Explain the purpose of an audit and auditor’s report.

The reason for yearly review and the review report is to give an autonomous supposition that whether the books of records and other fiscal summaries speak to a genuine and reasonable and straightforward position of a business or not.

  1. Explain the concept of financial probity. In your response, outline the principles that underpin ethics and probity

Monetary honor for an organization can be characterized as proof of moral conduct that the organization has done and recorded its budgetary exchanges with complete trustworthiness and honesty. (Joshi et. Al., 2013). The standards of fidelity and morals are trustworthiness and respectability, straightforwardness, pertinence, moral conduct, great aim, and esteem creation.

  1. Provide four examples of what would be considered fraudulent behavior in regard to company finances.
  • Incorrect recording of budgetary exchanges.
  • Missing costs or livelihoods to demonstrate expanded benefits. 
  • The exclusion of money related data in fiscal summaries. (Goodhart et. Al., 2013). 
  • Tempering of budget reports and not displaying a genuine and reasonable money related position.
  1. Discuss the difference between Generally Accepted Accounting Principles (GAAP) and the International Accounting Standards and why there was a need for harmonization. 

GAAP is the proper accounting rules embraced by the associations to exhibit their budgetary position in a way which could be comprehended by the partners. (Goodhart et. Al., 2013).  It is a standard based framework. IFRS is International Financial Reporting Standards which are created to give a progressively formally dressed way to deal with every one of the organizations around the globe in the way their budget reports are arranged and displayed. 

Assessment Task 2: Planning project 

PART A: ANALYSE FINANCES AND PREPARE BUDGETS 

Introduction

In this report the benefit and misfortune proclamation, income explanation has been concentrated to locate the frail regions of the business. Likewise, the conceivable explanations behind these shortcomings are distinguished and recommendations are given. 

  1. Conduct research in preparation for your financial performance report. 

As indicated by the exploration embraced of the benefit and misfortune articulation of both the years also the income explanations of both the years, the firm has not created a misfortune.. Likewise, the planned costs are not exactly the real misfortunes. (Joshi et. Al., 2013) Likewise, the product that is being utilized by the organization is additionally a standout amongst the best. Despite the fact that, it would require extra charges so as to get refreshed each year. 

  1. Prepare a financial performance report for the Principal Consultants using the template provided by your assessor that includes an:

The reason for this report is to dissect the benefit and misfortune proclamation of the year 2017-2018. This embraces the explanations behind an exhibition of each area of benefit and misfortune articulation. The explanations behind misfortunes are additionally examined in this report. 

  • The complete net gain/net benefit of the firm is $ 1,335,600 though the net benefit was $ 683,523 for the year 2017-2018. The explanation behind this net benefit is great income from counseling charges, workshops and productions and official pursuit administration. One of the critical explanations behind such a decent benefit sum is a broad advertising approach attempted by the firm and the great nature of workshops did every year. (Goodhart et. Al., 2013). 
  • The financial conditions and business patterns both are agreeable to the administration consultancy firm. This is the explanation behind a decent measure of benefit in 2017-2018.
  • As per the company’s marketable strategy, it intends to accomplish at any rate 10% of benefit every year which has been satisfied in the year 2017-2018. 
  • As per the income explanation, The firm needs to attempt cost control and cost decrease. as the planned pay is not exactly genuine and the planned .
  1. Develop budget forecasts for the next financial year 
Sales & Profit Budget 2018-2019
ParticularsAmount ($)
Revenue 
Consulting Fees  1,293,170 
E-Book Sales        10,000 
Workshops        38,000 
Publications           2,000 
Conference Collection        75,000 
Executive Search Service      132,000 
Gross Profit/Net Sales1,550,70
Less: Expenses 
– Accounting Fees           7,164 
– Advertising & Marketing           5,513 
– Computer Software           4,830 
– Insurance           7,875 
– Lease/Loan Payment           1,575 
– Motor Vehicle Expense           2,625 
– Office Cleaning           5,775 
– Office Supplies           2,205 
– Rent & Rates        45,150 
– Repairs & Maintenance           1,260 
– Salaries/wages (including PAYG)      529,200 
– Superannuation        63,000 
– Telephone           3,570 
– Utilities           2,520 
– Travel and Accommodation(For Workshops)        25,200 
– Contract writer (e-book)         10,500 
– E-book        10,000 
– Desktop publishing           3,000 
–Marketing (e-book)           1,200 
–Conference venue and catering           5,000 
–Speaker fees and travel        10,000 
–Marketing (conference only)           5,000 
–Conference bags           1,000 
–Conference casual project officer        30,000 
Total Expenses      783,162 
Net Profit (Before Tax)      767,008 

 

  1. Circulate report and budgets 

This financial plan is submitted to assessor with the goal that it very well may be examined in the gathering. 

PART B: MEET WITH MANAGEMENT TEAM 

 

  • Prepare for your meeting. Conduct research and develop a report on key financial compliance requirements and liabilities for tax in preparation for your meeting. 

Introduction 

In this report, key money related necessities of consistence and expense liabilities are examined for the association. These key money related necessities and other assessment commitments incorporate PAYG retaining and PAYG portions, finance charge commitments and so on. This report is grown with the goal that it very well may be talked about in the gathering. (Joshi et. Al., 2013)

At the point when the GST turnover of the firm is not exactly $ 20 million then it is required to pay GST quarterly. To pay the GST a business needs to present a Business Activity Statement to the Australian Tax Office. Additionally, the firm needs to present a GST return. For PAYG retaining and PAYG portions, the business needs to submit Australian Business number and the firm should be enlisted under the Australian Tax Office and to be watched that the laborer is lawfully permitted to work in Australia.

For PAYG salary charge portions a Business Activity Statement should be stopped with ATO before hotel the pay assessment form. The business needs to enroll for finance tax collection and look at with Revenue officer to discover the duty rate and limit that applies to the organization. 

The representatives who are paid than $ 450 should be paid superannuation and this must be paid well beyond the wages. 

Conclusion

In this report, every one of the commitments that the firm needs to agree to are exhibited. The money related administration of the firm needs to follow the every one of these prerequisites of Australian Tax office with respect to superannuation, compensation, finance, PAYG portions and so on. 

  1. Participate in the budget meeting

The sums dispensed for the gathering is $ 51000. This incorporates every one of the costs of the setting, packs and so forth. The net benefit for the monetary allowance is $ 767008. Every one of the livelihoods and costs have been considered for this (Kaye et. Al., 2014)

 

Assessment Task 3: Review project 

  • Analyze financial information 

 

Budgeted V/S Actual
ParticularsBudgetedActualVarianceFavorable/Adverse
Revenue    
Consulting Fees  1,293,170   1,410,720   117,550 Favorable 
E-Book Sales        10,000                     –     (10,000)Adverse
Workshops        38,000         45,000       7,000 Favorable 
Publications           2,000         15,000     13,000 Favorable 
Conference Collection        75,000                     –     (75,000)Adverse
Executive Search Service      132,000       144,000     12,000 Favorable 
Gross Profit/Net Sales1,550,1701,614,720  
Less: Expenses    
– Accounting Fees           7,165            7,165              –    
– Advertising & Marketing           5,513            5,250           263 Favorable 
– Computer Software           4,830            4,830              –    
– Insurance           7,875            4,028       3,847 Favorable 
– Lease/Loan Payment           1,575            1,575              –    
– Motor Vehicle Expense           2,625            5,444     (2,819)Adverse
– Office Cleaning           5,775         10,800     (5,025)Adverse
– Office Supplies           2,207            2,207              –    
– Rent & Rates        45,150         45,108             42 Favorable 
– Repairs & Maintenance           1,260            1,260              –    
– Salaries/wages (including PAYG)      529,200       529,200              –    
– Superannuation        63,000         63,000              –    
– Telephone           3,569            3,569              –    
– Utilities           2,520            4,131     (1,611)Adverse
– Travel and Accommodation(For Workshops)        25,200            5,654     19,546 Favorable 
– Contract writer (e-book)         10,500         48,090   (37,590)Adverse
– E-book        10,000         10,000              –    
– Desktop publishing           3,000            3,000              –    
–Marketing (e-book)           1,200            1,200              –    
–Conference venue and catering           5,000         10,000     (5,000)Adverse
–Speaker fees and travel        10,000         11,000     (1,000)Adverse
–Marketing (conference only)           5,000            7,500     (2,500)Adverse
–Conference bags           1,000            1,200         (200)Adverse
–Conference casual project officer        30,000         30,000              –    
Total Expenses      783,164       815,211   
Net Profit (Before Tax)      767,007       799,509               –    

Conference cost variance analysis:

ParticularsBudgetedActualVarianceFavorable/Adverse
Revenue    
Conference Collection        75,000                     –     (75,000)Adverse
Gross Profit/Net Sales    75,000              –     
Less: Expenses    
–Conference venue and catering           5,000         10,000     (5,000)Adverse
–Speaker fees and travel        10,000         11,000     (1,000)Adverse
–Marketing (conference only)           5,000            7,500     (2,500)Adverse
–Conference bags           1,000            1,200         (200)Adverse
–Conference casual project officer        30,000         30,000              –    
Total Expenses        51,000         59,700   
Net Profit (Before Tax)        24,000        (59,700)              –    

 

Proposed Conference Fees
ParticularsAmount
Expenses 
Conference venue and catering    11,000 
Speaker fees and travel    12,100 
Marketing (conference only)       8,250 
Conference bags       1,320 
Conference casual project officer    33,000 
Total Expenses 65,670 
Add: Mark Up Required 13,134 
Total Collection for Conference Required 78,804 
Number of Attendees             70 
The cost charged per person   1,126 
  1. Based on your analysis of the profit and loss account, develop a short report to submit it to the Principal Consultant (your assessor) that includes your analysis as above. 

Introduction 

In this report, every one of the changes in real and planned execution are examined. An investigation of these changes is given in this report. 

  • The changes are unfriendly for speaker charges, advertising, gathering pack, office cleaning, and supplies and so forth. This is because of expanded costs. The changes are certain for digital book deals, workshops, fixes and so on. (Jurevičienė et. Al., 2012) 

Conclusion

The positive changes for some, things are a decent sign for the organization yet a few costs have prompted negative differences which should be controlled.

  Assessment Task 4: Debtor management project 

 

  • Report on debtor management 

 

Introduction

In this report, an investigation is completed by examining the indebted person’s matured report. The account holder’s arrangements and their pertinence for the business are to be investigated. The indebted person’s matured report demonstrates that the organization gathers assets from account holders in any event following 60 days of offer. None of the borrowers pay the organization inside 30 days. Because of this, the liquidity of the organization is enduring. The indebted person’s approach should be restored. Customer 1 pays the extraordinary obligations following 90 days though customer 2 pays following 120 days. This is certifiably not a decent sign as this prompts an absence of fast and fluid assets with the firm. This may likewise influence the working capital of the firm. The sum paid following 120 days is a generous measure of $ 2714, such an enormous time hole for the installment of this obligation can prompt low working capital with the firm. The recommendations that the firm should execute are: 

  • Incentivize brief installments 
  • Penalize delay in installment following 90 days 
  • Set up clear credit strategies (Joshi et. Al., 2013) 
  • Offer different methods of installment to borrowers 
  • Outsource accumulation to a bookkeeping organization 

Conclusion

The report demonstrates that the installments made by the borrowers are not in the least brief. Truth be told, none of the account holders pay inside 30 days or under 30 days. The organization needs to resuscitate its indebted person’s approach as quickly as time permits. Likewise, the organization needs to actualize the five proposals given in the report. 2. (Jurevičienė et. Al., 2012) 

  1. Submit your report to your CEO (assessor) seeking approval to implement best practice debtor management processes. 

Dear Sir, 

Subject: To look for endorsement for actualizing the recommendations of the answer to improve account holder’s administration of the organization. 

The above report is submitted to look for endorsement so as to actualize the account holder’s arrangement as recorded in the above report. The advantage of this recommendation is that it would improve the indebted person’s administration just as the borrower’s turnover. Brief money accumulation from indebted individuals would prompt an expansion in working capital just as the liquidity of the firm. This would prompt better credit approaches and improve the liquidity of the firm. 

Thanking You, 

Yours sincerely, 

General Manager.

References

Kaye, J. J., McCuistion, M., Gulotta, R., & Shamma, D. A. (2014, April). Money talks: tracking personal finances. In Proceedings of the SIGCHI Conference on Human Factors in Computing Systems (pp. 521-530). ACM.

Farvacque-Vitkovic, C. D., & Kopanyi, M. (Eds.). (2014). Municipal finances: A handbook for local governments. The World Bank.

Jurevičienė, D., & Ivanova, O. (2012). Behavioral finances of financially savvy households: the types of investors. Contemporary Issues in Business, Management and Education’2012, 220-231.

Bhandari, S. B., & Iyer, R. (2013). Predicting business failure using cash flow statement based measures. Managerial Finance39(7), 667-676.

Stiglitz, J. E. (2015). Reconstructing macroeconomic theory to manage economic policy. In Fruitful Economics (pp. 20-56). Palgrave Macmillan, London.

Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson Higher Education AU.

McCarthy, D. P., Donald, P. F., Scharlemann, J. P., Buchanan, G. M., Balmford, A., Green, J. M., … & Leonard, D. L. (2012). Financial costs of meeting global biodiversity conservation targets: current spending and unmet needs. Science338(6109), 946-949.

Joshi, M., Cahill, D., Sidhu, J., & Kansal, M. (2013). Intellectual capital and financial performance: an evaluation of the Australian financial sector. Journal of intellectual capital14(2), 264-285.

Goodhart, C., Hartmann, P., Llewellyn, D. T., Rojas-Suarez, L., & Weisbrod, S. (2013). Financial regulation: Why, how and where now?. Routledge.

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