GST Estimation and Accounting Principles for Business Operations

The assignment content discusses various accounting and financial concepts related to Goods and Services Tax (GST) estimation, budget cash receipt including GST, and basic accounting principles. It involves calculating GST liability for cash sales, non-cash receipts, and cash payments incurring GST for the months of July, August, and September. The content also touches on task D, which recommends shifting production to India and outlines an action plan for approval, allocation of finances, relocation, and monitoring. Additionally, it discusses basic accounting principles such as ledgers and financial statements, including profit and loss statements, and the importance of organization profitability.

UNIT:
NAME:
DATE:

Assessment Task 1
Developing a Customer Service Plan
Customer service plan
Innovative Widget Customer Service Charter
Our Vision
To be a leader in providing customer satisfaction through responsive and timely services.
Our Mission
Innovative widget seeks to deliver professional, quality, innovative and friendly serves to all its
customers.
Who are our Customers
Internal Customers are:
Employees in the customer care department;
Mary, John, Mia, Nitin and Jonas
Our external Customers are;
Yore Mine Co.
Internal customers’ needs;
Motivation
Skills
Compensation
Resources to work with
Our external customers require;
Timely response
Friendly assistance
Quality services
We will give you what you need….and more!
We promise to deliver a widget that is right for your needs;
Requested measurements
High quality
Free from any defects
We promise to support you;
With friendly services
Timely response
Professional services

Reflection
The following write-up is my reflection on design and development of a customer service plan.
The customer service plan is designed to outline the important aspects in delivering quality
service to customers in an organization. It starts by outlining the vision and mission that create
what the department desires to be in the future and the purpose of existence. The purpose sets the
activities that are to be undertaken in the department. The customer service plan then defines the
customers that the organization has to work for. These include the internal and external
customers. The customer service plan also develops the promises that set standards in the
department in terms of quality and supportive services. In conclusion, customer service plan
enables an organization to have a focus on what it is doing and the desired or predetermined state
to meet it objectives.
Assessment Task 2
Managing and developing a team
Part B
Innovative Widget Case Study Report
The following report analyzes Innovative Widget Customer Service department performance,
possible causes of shortfalls and options to address the problems experienced. The Customer
service department has six staffs. They include John, Jonas, Mia, Nitin, Taya and Mary. Taya
and Mary were recruited in October after Nitin quitting her job and John having two months
leave. The performance of the customer service department of innovative Widget improved from
January to December. November had the highest number of calls of 1560 while February had the
least number of calls received of 1150. The performance of the department from the previous
year increased constantly from June to November with 4% to 12% respectively.
The shortfalls experienced in Customer Service department were ruddiness, delayed response,
and misunderstanding of the customers’ claims. One of the staff (Mary) was rude to customers in
several occasions and did not offer friendly services. Mary was also delayed picking the calls
from customers and failed to be responsive to telephone calls. Mary on another account
misunderstood customer’s message that lead to her giving the wrong response to the client. She

argued with the customers and accused him which was not right. Lastly, Mary was not able to
resolve problems arising from the customers’ claims. She was not familiar with the company’s
policies and procedures for resolving complex claims.
From the analysis of the Innovative Widget incase study, the problems experienced in the
Customer Service departments can be addressed by providing a manual script of policies and
procedures and training staffs. Proving a manual script will give staffs place of reference when
handling claims in the department. The problems can also be handled by training staffs when
being absorbed in the department. This will equip them with skill required in the department to
offer friendly, responsive, and professional services to customers.
In conclusion, the problems in the Customer Service department were caused by a new employee
and can be solved by equipping employees with professional skills and providing them with
manual scripts for reference.
Email to Yore Mine Co.
Hello our esteemed customer
I apologize on behalf of Innovative Widget for the delay and product issues we have caused your
company. I have forwarded your reordered for 1000*7mm Widget that will be delivered to your
premises within the next 3days. I am also going to upgrade the system to ensure responsive and
timely services are offers to meet our client’s expectations.
Kindly let me know if there is anything else you would which to be done to meet your
expectations.
Thank you
Yours Sincerely
Manager, Customer Service
Innovative Widgets
Role play with Mary
Coaching Plan

The coaching plan aims to equip Mary with skills to improve service delivery in the customer
Service department. This will involve assessing her understanding and getting her perception and
describing the procedures and policies on how to handle customer complains. The plan will take
duration of one week with two sections every day. This coaching section will use case studies
and stimulations to equip Mary with different techniques and skills to handle customers and
complains.
Notes
Mary should follow the following procedures when handling complaints;
1) Listen and understand carefully to the customer complain.
2) Avoid engaging in arguments with customers
3) Engage customer in resolving the problem
4) Make a professional judgment based on the problem and options to address the
issues.
In case of complex complains, one should always;
i. Gather all available information regarding the problem raised
ii. Offer an apology to the customer
iii. Outline what one is going to do to solve customers’ complain immediately
iv. Request the customer opinion on resolving the problem
Assessment 3
Monitoring and improving customer service
KPIs for Innovative Widget customer service staffs
 Call /complain will be handled within 30 minutes of being received
 All staffs are to be guided by the organizational policies and procedures
 Representatives should record customer’s issues and opportunities
 Staffs should consult for complex complaints
 Motivating staffs
 Rewards and compensating accordingly

 Creating relationship with customers to enhance retention
 Setting sales targets
 Continuous training and coaching to improve skills
 Introducing customer review section in the department
 Recording phone calls
 Number of training section per month
Questionnaire for collecting more KPIs
Name:
Date:
Questions
1) Gender
a. Male
b. Female
2) Customer
a. Internal customer
b. External customer
3) How many times have you used Innovate Widget products?
a. First time
b. Second time
c. More than Five times
4) How many times did you call our organization before you problem was solved?
a. Once
b. Twice
c. More than twice
5) Was the customer service representative?
a. Friendly
b. Responsive
c. Courteous
d. No of the above

6) How time did it take to receive you order?
a. Less than three days after making an order
b. On the third day after making an order
c. Behold the third day after ordering
7) Were products delivered of high quality?
No
Yes
8) Was there follow up after getting you purchase from our company?
a. No
b. Yes
9) Out of five stars, how many do you give to our customer service department?
a. One star: I did not like it
b. Two stars: Fair
c. Three stars: I like it
d. Four stars: Good
e. Five stars: Excellent
10) What changes would you like to be done in our organization to meet you expectation?
(open question)
Management recommendations report
The following report contains recommendations to the management of Innovation Widget on
improving organization wide clients’ services. First, the organization should introduce training
programs for new and existing customer service representative. This training program will
continuously improve staffs’ skills and ability to handle complaints on behalf of the organization.
Secondly, the organization sgou8ld introduce a monitoring system that will ensure customer
representatives meet KPIs. This monitoring will enable management of the customer service
department and maintenance of the customer relationships. Thirdly, the organization should

adopt a reinforcement to reward quality service delivery and punish poor services delivery.
Forth, the organization should procure a system that automatically records telephone calls. This
technology will allow the management evaluates the quality of services offered by customer
service representatives. The organization can also invest on online platform to engage with its
customers. Customers will have a platform to ask questions and review services that they will be
offered from the organization. Lastly, the company should print and avail policies and
procedures’ manual script for customer services representatives to have a reference when making
judgment on behalf of the organization.
Plan Financial Management Approaches
Assessment Task 1
Part A
Big Red Bicycle Pty Ltd master budget
The following is a discussion with Sam Gellar the General Sales Manager about the company’s
master budget prepared by Senior Accountant. It involves discussion whether the projection in
the budget are accurate, understandable, fair and achievable.
Achievability: The budget projects that the business will earn $1000000 net profit before tax for
the coming financial year. The budget is achievable because from the previous company
performance, the company managed to achieve sales of $1000000 in one quarter. This shows that
it achievable for the company has a net profit of $1M in a financial year.
Understandable: The budget is simple but not inclusive. One can easily simply know what the
projections mean but it hard to conceptualize because of lack of reference. There are no

percentages of previous performance to show what the company earned in the previous financial
year. This therefore makes the projections less convincing as it should be for those who do not
have access to previous performance.
The master budget is accurate. The numerical calculations are correct showing total sales and all
deductions. The calculations show that the company target of $1M is misses with a small margin
of less than 5%.
Fairness: The budget is not fair because it assumes that sales and costs will be equal in all
quarters. The second quarter has the highest sales of which are majorly from maintenance and
repair. This is different from other quarters where the sales are 30% less to Q2. Therefore, the
master budget is not fair by assuming equal sales and cost in all quarters.
Negotiation
First, the understandability of the master budget should be improved. The accountant should
have show previous financial year actual performance in the current budget projection for easy
understanding. This will enable managers who don’t have access to previous financial
information conceptualize on achievability of the current budget. Secondly, the master budget
requires to be moderated to have net profit before tax that reflects the objective of the company
of $1M. This will increase the accuracy of the budget and ensure it based on the objective of the
company. The budget also has projected commission as 2% while us the agreed commission is
2.5%. Thirdly, it not logical to project that sales and costs for all quarters in the financial year
will be equal. Therefore, the projections should be more realistic by using previous quarter sales
and cost to project current financial year budget. This can be done as a percentage of the
previous financial year actual performance.
In summary, the master budget should be redone with percentage projection form the previous
financial year actual performance. This will enable the company to estimate more accurately on
sales and costs to be incurred. It is always recommendable to overestimate cost and
underestimate sales.
Task B
Contingency Plan

Company Name: Big Red Bicycle Pty ltd
Person developing the plan:
Sales Manager Sales Centre A
Risk Identified: There is unfavorable economic climate that is likely to affect the company sales
by 20% below the projected sales volume. This will severely affect the target profit by the
company.
Strategies/ Activities to minimize the
risk
By when By Whom
Enhance efficiency: This will
minimize costs in the organization
Start of Q1 Production manager and
operations manager
Reduce amount of bikes transported
to the market: Finished products to be
stored in the company warehouse
until the economy is favorable. This
will reduce the cost of transporting to
the market and renting storage space
Start of Q1 Operations manager
Reduce promotional activities: This
will save the company resources that
are allocated for marketing and
advertising. Reducing promotional
activities when the economy is
unfavorable is logical because few
customers afford to buy products.
Q1 and Q2 Sales General Manager
Not to hire more employees Q1 Humana resource management
Prepare an intermediary budget; The
intermediary budget will enable the
company use minimum resources
when the economy is unfavorable.
Q1 and Q2 Accountant
Assessment 2

Implement financial Management approaches
Task A
The following section contains an explanation to a team to understand the budget projection and
it implications to the organization financially. This will enhance team members to be more
accountable in the implement5ation of the budget.
The organizational financial objectives: The Company aims to earn a net profit before tax of
$1000000. Second, the company needs to minimize it costs and wastage in order to increase its
profit margins.
The budget projects the costs that the company will incur to earn a certain amount of income. It
keeps the organization focused on the future costs and incomes expected. This makes it easy to
manage the company by forecasting.
Task B
The following section contains a discussion on how to help a team member, Bill Goodale to
understand the company policies and procedures in respect to his new role of tracking expenses
and petty cash. It is important to the team member to understand what is required by the
company to avoid being sued or demoted on basis of incompetence. In order to help Bill, he
needs to get the company policy manuscript and read.
Assessment task 3
Monitoring and controlling finances
Part A
Budget and Actual Performance
Revenue FY Q1 Q2 Q3
%
Variance
Absolute
%
Budget Actual Budge
t
Actual Budge
t
Actual Budge
t
Ac
5%

Commissio
n
5%
-2% 60000 60300 15000 15075 15000 15075 15000 1
Direct
wages fixed
0 0 200000 200000 50000 50000 50000 50000 50000 5
Sales -1% 1% 300000
0
29500000
0
75000
0
73750
0
75000
0
85060
0
75000
0
70
Cost of
goods sold
5% 5% 400000 420000 10000
0
11000
0
10000
0
10500
0
10000
0
10
Gross profit -8% 8% 234000
0
20500000 58500
0
58466
6
58500
0
60500
0
58500
0
57
Total
expenses
-4% 4% 140150
0
1301500 35037
5
36037
5
35037
5
40067
5
35037
5
34
Net
profit(Befor
e interest
and tax
-3% 3% 938500 930500 23462
5
25062
4
23462
5
23062
5
23462
5
23
Income Tax -6% 6% 234625 230625 58656 49625 58656 60656 58656 5
Net profit -15% 15% 703875 603875 17596
9
16569
5
17596
9
11606
9
17596
9
16
Task B
Revised contingency plan
Company Name: Big Red Bicycle Pty Ltd
Person Developing:
Name: Pat Roberts Position: Senior Accountant
Risk Identified: Unfavorable economic climate reducing sales by 20% and profits by 10%.

Strategies or activities to
minimize risk
By when By who
Adopt intermediary budgets
for each quarter
Q2 PM and OM
Reduce training and coaching
activities
Q2 HR
Withdrawing incentives to
sales agents
Q2 SM
Reduce working hours Q2 PM
Contingency implementation plan
Risk Identified: Unfavorable economic climate reducing sales by 20% and profits by 10%.
Activity Monitoring and date Person/s
Monitor operations and
production to reduce cost
Management report Q2 Production
Closure of training sections No sections proceeding Q3 Human resource manager
Announcement on removal of
selling incentive
Monitoring sales report Q2 Sales Manager
Email informing employees
about reduced working hours
Monitoring variance report.
Q3
Production Manager
Assessment 4

Part A
1. (A). average debtors days
Debtor days = Debtors/ (sales/ 365)
=362,500(2,900,000/365) =45 days
(B) Average creditor days
Creditor days = (trade payables/ cost of sales)*365
= (80,000/380,000)365
= 76days
(c) Average stock turnover
Stock turnover = cost of goods sold/ average inventory
= 800,000/300,000
=2.7 or 8:3
2. Recommendations for the aging budget
I recommend that the debtor aging budget is restructured so that the percentages allocated
for debtor purchases be reduced to 40%. This will help achieve the targeted amount of
profit before tax since it will aim to mitigate the number of bad debts. After the reduction
of the allocated percentage for debtors, the total amount reclaimed will total to 290,000
which when added to the profit realized before tax (825,000) will have 1,115,000,
thereby hitting the targeted profits.
Another recommendation is that the amount obtained because of reducing the debtor’s
percentage, part of it should be utilized in training the staff in the sales and marketing
department. The training will improve their selling skills, which will then translate into
more revenues being generated by the company. The training will go a long way to
ensure that the company realizes their targeted profits and surpass them.
The sources of information used to build the recommendation include,

a) Statement of financial performance
b) Scenario information
c) Ageing debtors budget
Task B
1. number of units required to achieve the targeted profit amount
The amount of profit per unit= selling price less variable cost=$ 250
The targeted profit = 1,000,000
The number of units to cover the variable cost = 1,000,000/250=4,000 units
The number of units to cover the variable cost =1,280,000/250 =5,120
The plant requires to produce a total of (4,000 +5,120) = 9,120units to attain the
targeted profit of 1,000,000
(b) Current variable cost per unit required to achieve the targeted profit amount
Targeted profit 1,000,000
Current manufacturing capacity 8,000 units
Current fixed cost 1,280,000
Number of units required to cover fixed cost = 5,120 (from (a) above)
Number of units remaining after covering the fixed cost= 8,000 less 5,120=2,880
units
Therefore the profit per unit required to hit the targeted profit = 1,000,000/2,880
=$347
Hence, the variable cost= price per unit less the profit per unit =$500-347= $153
The variable cost required at current capacity is $ 153.

2. The BRB Company will be better off if it manages to increase its production capacity
because the company has an Indian plant, which can manage to produce 10000 units.
It is wise to shift to that plant as it matches the required production of 9,120 units.
The other suggestion would be to pass the increased cost of production to the
consumer while using the current production capacity. The additional cost of $97 will
increase the cost of the bike to $597 to attain the targeted profits.
3. The documents used to build the above suggestions include
a) Statement of financial performance
b) Scenario information
c) Calculations
Task C
Business activity (BAS) for the first quarter 2012-2013
1. The number of years required to maintain the GST records, to satisfy ATO
requirements is three. However, there are cases where the auditing process might
extend up to 6 years. Thus, it is correct to say that the records should be kept until
there is no more auditing required.
2. GST estimation
Budget cash
receipt including
GST
July August September
Cash sale 20,000 10,000 10,000
GST Rate 10% 10% 10%
GST liable 2,000 1,000 1,000

Non-cash receipts
for GST
180,000 230,000 150,000
GST Rate 10% 10% 10%
GST liable 18,000 23,000 15,000
Cash payment
incurring GST
29,300 35,200 30,250
GST Rate 10% 10% 10%
GST liable 2,930 3,520 3,025
a. Cash receipts
Cash sale 20,000 10,000 10,000
July August September
b. Cash payments
Cash payment
incurring GST
29,300 35,200 30,250
July August September

c. GST liability
July August September
Cash receipt GST
liable
$2,000 $1,000 $1,000
Cash payment
GST liable
$2,930 $3,520 $3,025
GST liable $-930 $-2520 $-2,025
Task D
Action plan for the recommendation in part B
Activity Person Position Timeline
Assessing the viability of
shifting the production to
India
Sam Geller
Charles
Pierce
Operations manager
Sales general
manager
Production manager
2 months
Approval of the relocation Michelle Yeo
Tom
Chief executive
officer
1 week

Copeland
Managing director
Allocating the finances
for the relocation
Pat Robert Senior Accountant 1 week
Relocation and
implementation
Stuart Laruot Operations manager 6 months
Monitoring and
evaluation
John Black Chief financial
officer
On going
Task E
1. Basic accounting principles
These principles and guidelines are founded under ten main principles including,
economic, monetary, time, and cost
2. Cash flow is the total amount of money that a business organization has entering and
leaving the entity and in most cases affect the liquidity of the business.
3. Ledgers and financial statements
Ledgers are financial records that hold the company financial information and are
used to prepare the financial statements; the financial statements consists statement of
financial position and profit and loss statement.
4. Profit and loss statements
This is a company financial record that shows the company’s earnings and expenses
over a period.
Organization profitability is determined by how well the management can keep
control of the organization finances as well as the activities. Having a good cost

benefit analysis ensures that the management decision-making process is relevant and
compatible with the accounting systems available as well as gives room for
flexibility.
References
Grönroos, C. (2007). Service management and marketing: customer management in service
competition. John Wiley & Sons.
Gummesson, E., Lusch, R. F., & Vargo, S. L. (2010). Transitioning from service management to
service-dominant logic: Observations and recommendations. International Journal of Quality
and Service Sciences, 2(1), 8-22.
Fitzsimmons, J. A., Fitzsimmons, M. J., & Bordoloi, S. (2008). Service management:
Operations, strategy, and information technology (p. 4). New York, NY: McGraw-Hill.
Silvain, F., & Pluche, H. (2007). U.S. Patent Application No. 11/655,852.