Manage Budget and Financial Plans

This document provides information on managing budget and financial plans. It covers topics such as double entry bookkeeping, cash accounting, accrual basis of accounting, depreciation, GST, and more. The document includes assignments, essays, and dissertations related to this subject. It is relevant for students studying finance and accounting courses in various colleges and universities.

Running head: MANAGE BUDGET AND FINANCIAL PLANS
Manage budget and financial plans
Name of the student
Name of the university
Student ID
Author note

1MANAGE BUDGET AND FINANCIAL PLANS
Table of Contents
Assessment task 1......................................................................................................................2
Assessment task 2 – Budget planning project............................................................................9
Assessment task 3 – Monitor and control finances project......................................................13
Assessment task 4: Profit and loss review project...................................................................15
Assessment 5: Aged Debtor Report.........................................................................................18
Reference..................................................................................................................................22

2MANAGE BUDGET AND FINANCIAL PLANS
Assessment task 1
Answer 1
Basis principle of the double entry bookkeeping system is there shall always be 2
entries for each transaction. One of the entries is known as credit entry and another entry is
known as the debit entry (Dudin et al., 2015).
Answer 2
The principle of cash accounting is that the entities shall record the expenses when the
expenses are actually paid rather than recording it when it is incurred.
Advantage – while paying tax under cash accounting basis, it is ensured that the taxes are not
paid for the monies that has not been received yet. It improves the cash flows and ensures that
the funds are available for the tax expenses.
Disadvantage – as it is very simple method it does not allow tracking of the accrual dates of
purchase and sales. In addition, it does not provide matching the transaction with specific
inventory items (Dzhandzhugazova et al., 2015).
Answer 3
Under accrual basis of accounting it requires recording of the accounting transaction
under the period in which they are occurred actually and not under the period to which the
cash flow associated to it takes place.
Advantage – it produces more faithful, more accurate financial statement which is turn
constitutes the better representation of the actual circumstances as compared to the cash basis
of accounting.

3MANAGE BUDGET AND FINANCIAL PLANS
Disadvantage – it requires transactions to be recorded at the time when it takes place.
However, as the invoices do not match with the actual event, this method requires estimation
from the accountant’s end (Kumar, 2017).
Answer 4
Matching principle –depreciation reduces the income of that accounting period though the
expenses do not require any credit or cash payment. Reason behind this expense is complying
with matching principle that is required by the accrual accounting.
Calculation of depreciation expenses – expenses for depreciation can be calculated through
different methods based on the type of the assets, estimated useful life of the asset, expected
business use of the asset and its residual value. Various methods are straight line method,
sum of year’s digit method, units of production method and double declining balance method
(Sofat & Hiro, 2015).
Answer 5
A. Tax periods – tax invoice – purpose of this part is prescribing additional information
required to be included under tax invoices issued for purposes of GST.
B. Financial supplies – this part provides meaning of the term Financial supply. The
financial supplies are the input that is taxed under GST Act.
C. Reduced input tax credits – this part sets out the list for reduced credit acquisitions
that generates an entitlement for reduced input tax credits (Ato.gov.au, 2019).
Answer 6
 Goods and services tax – GST is the broad based tax at the rate of 10% that is
imposed on most of the services, goods and different other items sold over Australia.
Based on the turnover, the business required to be registered for GST

4MANAGE BUDGET AND FINANCIAL PLANS
 Pay as you go – PAYG system allows paying expected tax liability through
instalments. ATO will notify the PAYG obligations
 Fringe benefit tax – if certain benefits are provided to the employees or the people
related to employees by the employer the employer will be liable to FBT
 Superannuation guarantee obligation – as the employer either minimum level for
superannuation can be set for each of the eligible employees or charge can be paud to
the ATO (Ato.gov.au, 2019).
Answer 7
 Some heath and care and medical services
 Most basis foods
 Precious metals
 Farmland (Ato.gov.au, 2019).
Answer 8
If the business is registered under GST, Business activity statement (BAS) shall be
lodged that will help to report and pay GST. If the business is registered with ABN
(Australian business number) and GST, BAS will be automatically sent when it is required to
be lodged
GST reporting shall be one of the following –
 Monthly – if the GST turnover amounted to $ 20 million or more
 Quarterly – if GST turnover is lower than $ 20 million and no obligation is there to
report monthly
 Annually – if voluntarily registered for the GST.

5MANAGE BUDGET AND FINANCIAL PLANS
Based on the circumstances, cycle can be changed for reporting and paying GST (Ato.gov.au,
2019).
Answer 9
Tax equivalent of top marginal rate in addition to medicare shall be withheld from the
payment to the supplier unless the invoice is provided that is quoted with ABN. From 1st July
2017 the rate is 47% (Ato.gov.au, 2019).
Answer 10
Non-profit organization shall be registered for GST if its turnover exceeds $ 150,000
(Ato.gov.au, 2019).
Answer 11
 The document is intended to be the tax invoice
 Identity of the seller
 ABN number of the seller
 Date of invoice issue
 Brief description of items sold with the quantity and price
 GST amount payable, if any
 Extent to which the sales included in invoice is taxable sale (Ato.gov.au, 2019).
Answer 12
 Profit and loss statement – it represents the income and expenses of the company and
profit or loss generated from incomes after charging the expenses
 Balance sheet – it represents the details regarding assets, liabilities and equities of the
company.

6MANAGE BUDGET AND FINANCIAL PLANS
 Cash flow statement – it records the cash received or expensed by the company from
or towards operating activities, investing activities and financing activities
(McKinney, 2015).
Answer 13
All the ASX listed companies are required to get their financial reports audited.
Answer 14
Purpose of financial audit is to deliver the users of financial statements with the
opinion issued by auditor on whether financial statement of the entity are presented in all
material aspects fairly and as per the applicable framework for financial reporting.
Purpose of the auditor’s report is documenting the reasonable assurances that the
financial statements of the entity are free from the error (Nosheen, Sadiq & Rafay, 2016).
Answer 15
Companies develop the budget for monitoring the progress towards the goals. It
majorly includes 3 aspects – forecast of the income, forecast of expenses and tool for the
decision making (Morgan et al., 2017).
Answer 16
 Setting the objectives
 Determining the available resources
 Estimating the future needs
 Matching the future needs to the available resources
 Obtaining the final approval
 Distributing the approved funds

7MANAGE BUDGET AND FINANCIAL PLANS
 Evaluating and monitoring (Manasan, 2017).
Answer 17
 Performing good forecast – good forecast is as simple as the paper and pencil for
small companies
 Evaluate the terms – checking that the suppliers terms and customer terms are
balanced properly
 Enforcing the payment discipline – shortening the receivable period
 Segmenting the customers, inventories and supplies – while inventory is analysed,
sales volatility must be observed
 Making it a priority all over the company – assuring that all the employees
understands the priority
Answer 18
Using the spreadsheet, changes if any made to the budget can be updated instantly for
the entire budget with the total calculation. It can be used for tracking the variance with
actual data and presenting it to the management.
2 key features of spreadsheet while preparing the budget are as follows –
 Pivot table – it summarizes large amounts of the excel data from the formatted
database
 Sorting and filtering – for making it easier to find the required data, the data can be
picked or reordered as per the requirement.
Answer 19
 Financial statements shall present the information simply

8MANAGE BUDGET AND FINANCIAL PLANS
 Shall be cautious regarding the adding additional accounts to chart of accounts
Considering key information required for knowing how well the business is going on (Muli &
Rotich, 2016).
Answer 20
Purpose of the profit and loss account is representing whether the business has made
the profit or loss during the financial year. Key features of profit and loss account are as
follows –
 Profit and loss statement is prepared in each year and from it the entity gets the idea
regarding whether the company made the profit or loss
 Cash inflows through sales, interest received and dividend received are recorded in
the revenue section of the statement (Morden, 2016).

9MANAGE BUDGET AND FINANCIAL PLANS
Assessment task 2 – Budget planning project
1. Draft marketing budget
2. E mail to CEO
From: John Ally [e-mail]
To: Hedley Brown
Subject: Discussion of budget
Dear Sir,
I would like to draw your attention regarding the marketing budget of the company for which
I have been allocated an amount of $ 25,000. However, it has been budgeted that the expense
for the purpose of marketing will be amounted to $ 55,000. The significant variance of
budget against the allocation is inclusion of TV advertising campaign amounting to $ 30,000.
Various advantages of TV advertising are as follows –
Grabbing attention – taking the product to millions of homes can be done through TV
advertising as it is a very common medium available to each of the houses. Biggest advantage
of TV campaign is it is able to call out the potential customer’s right where it is required.
Combining sound and sight – with the TV advertising sight and sounds are combined that are
intrusive and capable of interrupting whatever else the the viewer may be doing to listen and
watch to the pitch

10MANAGE BUDGET AND FINANCIAL PLANS
Hence, for discussing the budget please allow me a time and date for a meeting with you at
your convenient time.
Thanks & Regards,
John Ally,
Accounting manager
3. Revision of marketing budget
4. E mail to CEO
From: John Ally [e-mail]
To: Hedley Brown
Subject: Discussion of budget
Dear Sir,
I would like to draw your attention regarding the revised marketing budget of the company
prepared by me after the negotiation budget held with you on 5th January 2019. After
discussing with the radio and TV advertising agencies it is negotiated that they are ready to
offer some discounts that will bring down the entire cost to $ 43,600. Therefore, I would like
to request you to kindly revise the budget allocation to carry out the marketing activities
successfully.

11MANAGE BUDGET AND FINANCIAL PLANS
Hence, for discussing the budget please allow me a time and date for a meeting with you at
your convenient time.
Thanks & Regards,
John Ally,
Accounting manager
5. Meeting with the team
Overall budget allocation
As per the discussion with the CEO the total allocated amount for budget was $
44,000 whereas the revised budget amount was $ 43,600. Major expenses will be towards
radio advertising expenses amounting to $ 7,200 and for TV advertising campaign it will be $
21,600. Stand at the VCE careers Expo for 2016 and Develop and publish 2016 promotional
brochure will be expensed for 2016 only (Renz, 2016). Expenses for redesigning the web
sites for improving the branding will be reduced to $ 4,800 from $ 5,000.
Amounts allocated for each marketing activity –
 Redesign web site to improve branding – $ 4800
 Design and implement an incentive scheme for referrals by students - $ 2400
 Conduct a radio advertising campaign - $ 7200
 Stand at VCE Careers Expo 2016 - $ 3300
 Develop and publish 2016 promotional brochure - $ 1500
 Sponsor community organisation to improve local community profile - $ 2,000
 Contingency amount - $ 800
 TV Advertising campaign - $ 21,600

12MANAGE BUDGET AND FINANCIAL PLANS
Allocated amount for contingencies
Amount allocated for the purpose of contingencies amounted to $ 800 that will be
expenses equally in each month at $ 67.
Outline of finance policies
To achieve the budget target the management as well as employees shall be provided
with proper training activities that will enable them to use various scarce resources in
efficient manner. Different segments for which the training is required are using of the
spreadsheet for maintaining the expenses, handling cash and complying with the financial
policies of the company (Lasserre, 2017). Further, for reimbursement of the expenses
incurred by the employees on behalf of the company shall be made only upon providing
proper bills and attachments. Moreover, cash amounting to more than $ 1,000 shall be
immediately deposited in bank account. Cash amounted to lower than $100 can be disbursed
any time from the petty cash.

13MANAGE BUDGET AND FINANCIAL PLANS
Assessment task 3 – Monitor and control finances project
1. Updated marketing budget
2. Report on budget and expenses
As per the above table it can be identified that the budget for web site redesign was $
5,000. However, the actual expenses exceeded to $ 7000. Incentive scheme expenses was $
4,400 in actual whereas the budget allocated was $ 2,400 and radio advertising expenses was
$ 10,000 in actual whereas the budget allocated was $ 7,200.
Overall variance and individual marketing variance
Marketing Activity Budget Actual Variance Variance type
Web site redesign 4800 7000 -2200 Unfavourable
Incentive scheme 2400 4400 -2000 Unfavourable
Education Expo 3300 3500 -200 Favourable
2016 Promotional brochure 1500 1500 0 Favourable
Community sponsorship 2000 2000 0 Unfavourable
Radio advertising 7200 10000 -2800 Unfavourable
Overall variance 21200 28400 -7200 Unfavourable
Reasons for overruns
Due to changes in the marketing head and one new person appointed who was not
convinced regarding offering discounts, actual radio advertising expenses was equal to the
initial budget that is $ 10,000. Web site redesigning cost has been increased due to increase in
the marketing cost.

14MANAGE BUDGET AND FINANCIAL PLANS
3. E-mail to CEO
From: John Ally [e-mail]
To: Hedley Brown
Subject: Discussion of budget
Dear Sir,
I would like to draw your attention regarding the actual marketing expenses against budgeted
expenses. It was found that the actual expenses for the marketing expenses amounted to $
28,400 against the budgeted expenses of $ 21,200. Hence, the all over unfavourable variances
were amounted to $ 7,200. The attached documents will provide details regarding the actual
budget and variances for each activity.
Hence, I, therefore, request you to kindly go through the attached documents for details of
actual expenses and variance.
Thanks & Regards,
John Ally,
Accounting manager

15MANAGE BUDGET AND FINANCIAL PLANS
Assessment task 4: Profit and loss review project
1. Report to CEO
Introduction
Main objective of the report is to focus on the performance of Melbourne campus and
Sydney campus for the period ended six months based on the given details. It will compare
the performance of each campus and recommend solutions regarding expenses where the
variances are more than 10% (Bryce, 2017).
Discussion
It can be identified from the details provided in the profit and loss account for the
period ended six months that the sales of Melbourne campus was more by 5.56% as
compared to the budget. On the other hand, sales of Sydney campus were more by 17.14% as
compared to the budget. Total expenses of Melbourne campus was more by 0.38% as
compared to the budget. On the other hand, expenses of Sydney campus were more by 3.46%
as compared to the budget. Profit for Melbourne campus exceeded by 27.57% and for Sydney
campus it exceeded by 184.29%. However, if the absolute value is considered, it can be
identified that the profit for Melbourne campus is significantly higher as compared to Sydney
campus (Ginter, Duncan & Swayne, 2018).
Variances higher than 10% for Sydney campus are – electricity and gas expenses,
internet, office supplies, stationary, and water and net profit. On the other hand, Variances
higher than 10% for Melbourne campus are – sales, electricity and gas expenses, office
supplies, stationary, and water and net profit.
Recommendation

16MANAGE BUDGET AND FINANCIAL PLANS
Based on the above discussion it can be recommended that both the campuses shall
try to enhance their sales through spending in advertisement campaign. Expenses of office
supplies shall be tried to be minimized through taking quotations from other suppliers.
2. Report to CEO
From: John Ally [e-mail]
To: Hedley Brown
Subject: Discussion of profit and loss
Dear Sir,
I would like to draw your attention regarding the performances of Melbourne campus and
Sydney campus regarding their profit status. It can be identified from the details provided in
the profit and loss account for the period ended six months that the sales of Melbourne
campus was more by 5.56% as compared to the budget. On the other hand, sales of Sydney
campus were more by 17.14% as compared to the budget. Total expenses of Melbourne
campus was more by 0.38% as compared to the budget. On the other hand, expenses of
Sydney campus were more by 3.46% as compared to the budget. Profit for Melbourne
campus exceeded by 27.57% and for Sydney campus it exceeded by 184.29%. However, if
the absolute value is considered, it can be identified that the profit for Melbourne campus is
significantly higher as compared to Sydney campus. Details attachments are attached
herewith for your review.
Hence, I, therefore request you to kindly go through the attachment.
Thanks & Regards,
John Ally,

17MANAGE BUDGET AND FINANCIAL PLANS
Accounting manager
Attachments –

18MANAGE BUDGET AND FINANCIAL PLANS
Assessment 5: Aged Debtor Report
Report to CEO
Introduction
This report would look to address the report that has been derived from the aged
debtor report. This report is based on a six month period and this will be helpful in creating
an understanding of the performance of the company with respect to their debtors.
Discussion
The assessment of the report addresses the fact that the company has been effective
aged debtor management process. It is seen that the payment system is 14 days from invoice
and therefore the debtors are satisfied with the service that they receive.
In this manner, the debtors are able to receive their balance payment within a short
time period and therefore the transaction process is very fast and smooth. The aged debtor’s
process is a smooth and effective one and therefore the operational activities of the company
are better than their competitors.
Recommendation
There are certain recommendations that can be given to the company and they are as follows;
1. Assess the aged summary from time to time
2. Maintain healthy relationship with the debtors
3. Understand their issues and problems
4. Maintain proper debtor management process
5. Assess the debtor management process that is undertaken by their rival companies.

19MANAGE BUDGET AND FINANCIAL PLANS
2.
From: John Ally [e-mail]
To: Hedley Brown
Subject: Discussion of profit and loss
Respected Sir,
This is to inform you that we have gone through the aged debtor report and have assessed the
summary report as well. The results have indicated the fact that the summary report is quite
good and the performance of the company with respect to the aged debtor report has been
proper. The payment process for the debtors is precise and timely. It is due to this fact that the
debtors are satisfied.
This process can be continued even though certain improvements can be made that has been
mentioned in the report. It can be said that the incorporation of these suggestions can improve
the performance of the company to the next level.
Kindly go through the attachment
Thanks and Regards
John Ally
Attachments:
Client Name
120+
Days
90
Days
60
Days
30
Days Current Total

20MANAGE BUDGET AND FINANCIAL PLANS
Client 1 $2,800 $1,560
$
1,440.0
0
$
2,160.0
0
$
1,800.0
0
$
9,760.0
0
Client 2 $2,600 $1,320 $1,000 $2,400 $2,320
$
9,640.0
0
Client 3 $1,450 $1,780 $2,450 $950 $3,100
$
9,730.0
0
Totals
6,850.0
0
4,660.0
0
4,890.0
0
5,510.0
0
7,220.0
0
Client Name
120+
Days 90 Days 60 Days 30 Days Current Total
Client 1
$3,476.
00
$4,356.
00
$1,250.
00
$2,100.
00
$4,314.
00
$15,496.
00
Client 2
$2,714.
00
$2,780.
00
$4,120.
00
$2,450.
00
$5,000.
00
$17,064.
00
Client 3
$4,210.
00
$2,870.
00
$3,781.
00
$6,751.
00
$1,870.
00
$19,482.
00

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Totals
10,400.
00
10,006.
00
9,151.0
0
11,301.
00
11,184.
00
52,042.0
0

22MANAGE BUDGET AND FINANCIAL PLANS
Reference
Ato.gov.au. (2019). Home page. Retrieved 7 January 2019, from https://www.ato.gov.au/
Bryce, H. J. (2017). Financial and strategic management for nonprofit organizations. Walter
de Gruyter GmbH & Co KG.
Dudin, M., Prokofev, M., Fedorova, I., Frygin, A., & Kucuri, G. (2015). International
Practice of Generation of the National Budget Income on the Basis of the Generally
Accepted Financial Reporting Standards (IFRS).
Dzhandzhugazova, E. A., Zaitseva, N. A., Larionova, A. A., Petrovskaya, M. V., &
Chaplyuk, V. Z. (2015). Methodological aspects of strategic management of financial
risks during construction of hotel business objects. Asian Social Science, 11(20), 229.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health
care organizations. John Wiley & Sons.
Kumar, R. (2017). Strategic Financial Management Casebook. Academic Press.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher
Education.
Manasan, R. G. (2017). Reforming the legal framework for the budget process.
McKinney, J. B. (2015). Effective financial management in public and nonprofit agencies.
ABC-CLIO.
Morden, T. (2016). Principles of strategic management. Routledge.

23MANAGE BUDGET AND FINANCIAL PLANS
Morgan, D., Robinson, K. S., Strachota, D., & Hough, J. A. (2017). The Budget Cycle:
Characteristics and Consequences. In Budgeting for Local Governments and
Communities (pp. 135-164). Routledge.
Muli, B. M., & Rotich, G. (2016). Effect of financial management practices on budget
implementation of county governments: A case of Machakos County. Strategic
Journal of Business & Change Management, 3(4).
Nosheen, S., Sadiq, R., & Rafay, A. (2016, September). The primacy of innovation in
strategic financial management-understanding the impact of innovation and
performance on capital structure. In Management of Innovation and Technology
(ICMIT), 2016 IEEE International Conference on(pp. 280-285). IEEE.
Renz, D. O. (2016). The Jossey-Bass handbook of nonprofit leadership and management.
John Wiley & Sons.
Sofat, R., & Hiro, P. (2015). Strategic financial management. PHI Learning Pvt. Ltd.