Manage Finances

This document provides guidance on managing finances for an organization. It covers topics such as tax compliance, current compliance requirements, financial software, budgeting principles, implications of probity, viable financial quarters, inclusion in budgets, internal control, and trade agreements.

Running head: MANAGE FINANCES
Manage Finances
Name of the Student
Name of the University
Author Note

MANAGE FINANCES
Table of Contents
1. Identify the statutory requirement for tax compliances and calculate the tax liabilities for
Libertine restaurant group pty Ltd under taxation legislation:........................................................3
2. Identify the current compliances requirements and liabilities for this organisation under
corporation ACT 2001.....................................................................................................................5
3. Review the existing financial management software to discuss the suitability of Libertine
restaurant group pty ltd....................................................................................................................6
4. Explain how you can apply the following principle of accounting in developing the budget
required for the task.........................................................................................................................7
5. Explain and discuss the implications of probity when preparing and revising budgets..............7
6. Identify most viable financial quarters for Libertine restaurant group pty ltd............................8
7. List any other items you would recommend for inclusion in budgets for Libertine restaurant
groups..............................................................................................................................................8
8. List new or modified internal control that could improve risk management technique for
Libertine restaurant pty Ltd including the maintenance of audit trails............................................9
9. Discuss the understanding of following and their impact on hospitality:.................................10
Assessment 2.................................................................................................................................12
1. Issues which can be identified...................................................................................................12
2. Performance...............................................................................................................................14
3. Financial management process in place....................................................................................15
Reference and Bibliography:.........................................................................................................17

MANAGE FINANCES
1. Identify the statutory requirement for tax compliances and calculate the tax liabilities for
Libertine restaurant group pty Ltd under taxation legislation:
A:- The Libertine restaurant group pty ltd. need to satisfy all the following statutory
requirements as a tax compliance
Tax Requirement
a) Goods and service tax As, per the ATO guidelines all the Australian business
organisation who are having a turnover more or equals to
$75,000 in an income year must have to register and file the
GST. Since, Libertine has generated revenue of $16,264,105 in
the financial year 2016/2017 so it requires filing GST.
b) Payroll tax According to NSW guideline, if an organisation have any
individual bill is $75,000 or more, then it require to pay the
payroll tax.
c) company tax The federal government of Australia has imposed a tax rate of
30% o the Australian companies since 2001. There is a tax
relief for the companies who has a turnover $10 million but
Libertine does not satisfied this so it has to pay a tax rate of
30%.
d) Fringe benefit tax It is required to lodge a tax return and have to pay FBT for the
total amount that it owed in the income year.
e) PAYG withholding payable According to Australian taxation office, a taxpayer
required to register under PAYG withholding payable
payments like payment to employee, payment under
voluntary agreement and payment where
ABN(Australian Business Number) has not quoted. The
timeline for this is 14Th of August.

MANAGE FINANCES
f) Income tax A Australian citizen can lodge the tax or eligible to pay tax if
the income of the person is more than $18200 in a income
year. The $18200 is known as tax free threshold. A tax rate of
19% is impose for each $1 more than $37000 and a rate of
45% for over $180000.
Tax liability of Libertine-
Goods and service tax = $ 10,95,774.75
Pay roll tax= $ 78,815.09
Fringe benefit tax= $ 7,000.00
PAYG tax= $ 50,691.20
Income tax= $2,34,510.79
Therefore the total tax incurred in the financial year is $1466791.83

MANAGE FINANCES
2. Identify the current compliances requirements and liabilities for this organisation under
corporation ACT 2001.
According to corporation, Act 2001 the Libertine company requires to compliances the
following six important obligation –
1. Company have to prepare the ‘financial report’ under the guidance of section of 295 of the
Act.
2. There must be a director’s report in the financial yearbook under section 298 of the Act.
3. According to section 301, 307, 308 of the Act the organisation have to audit the financial
year report and collect the auditor’s report.
4. It is the responsibility of the company to distribute the financial report, director’s report as
well as the auditor’s report to the stakeholder of the company under section 314 of the act.
5. Prepare the financial report, directors report and auditor’s report as per ASIC under section
319 of the Act (Dfat.gov.au 2019).
6. All the financial report, directors report and auditor’s report have to present at the general
meeting as per section 317 of the Act.
In addition to the above six compliances the Libertin pty ltd needs to full fill the requirements
of section 111 AA and division 2 and 3. The company need to accomplish all the taxation
policy and civil rules. The company should not operate beyond the rules set by ASIC. It is
important to keep the sufficient records (minimum seven years).

MANAGE FINANCES
3. Review the existing financial management software to discuss the suitability of Libertine
restaurant group pty ltd.
The company has using the POS (point of sale) system in conjunction with accounting
software. The software enhances for a better analysis of the expenditure under particulars, food
and beverage expenditures. There has some limitation of the current software system that are
estimating the future profit, complexity in operating and using of average method to calculate
cost without knowing the exact cost of each product. The software is failed to calculate the stock
figure, which is needed to calculate the food and beverage used. There also fraud find in the
lower level by sending inaccurate data to upper management.
There are number of software available in market in alternative of the current POS, but
SAP and Oracle financial cloud are two good software, those can solve the current problem and
gives the advantages in financial management system (Fooks and Gilmore 2014). These, two
software comprises the following advantages to the company’s financial and operating activities-
 Budgeting and forecasting the future profit
 It reduces the chances of fraud through consolidation and roll-up approach
 This helps in preparation of an standard financial report
 These helps in calculation of revenue in a systematic process
 Risk management as this helps in future forecasting
 Theses software helps the owners of the business to have a good supervision by terminating
the chances of loss

MANAGE FINANCES
4. Explain how you can apply the following principle of accounting in developing the
budget required for the task.
a. The matching principle in finance is the process of matching accomplishment or
revenue with efforts or expanses being determined. The matching process is completely based on
the historic cost, which help the management to prepare a budget based on the cost incurred in
the past financial year.
b. account groups is the process of segregation or consolidation of a number of accounts
heaving similar characteristics into a single group. This, enhance the decision making process
while, preparing the budgets. This increases the accuracy and quality of financial report with
reduces the complexity through interlink the similar accounts (Livermore 2014).
c. Time period principle states that a business organisation should report the financial
result of its activities within a particular time frame which may be quarterly, monthly or
annually. This is important for preparation of a budget as it is easy to analyse the business factors
which influence its operation periodically which helps to prepare an budget which can eliminate
the negative factors.
5. Explain and discuss the implications of probity when preparing and revising budgets.
Probity is the strict adherence to code of ethics and understanding the honesty that is
beyond the legal requirement. In financial point of view probity denotes that minimise the risk
associate with all the procedures, process and system concerning any transition involving money.
This check the fitness of an organisation towards undertake an activity for which authorisation is
required. Probity check the previous history, financial report, activity of the organisation that not
in term financial and legal involvement (Rose 2014).

MANAGE FINANCES
It is important for Libertine for implement of probity since it addresses about the fitness
of the organisation. This helps in receiving of new project and increase the source of investment
as it admit about the ability of the firm. This helps to avoid the material misstatement in
preparation of a budget. This helps in show the clear and transparent position of a business.
6. Identify most viable financial quarters for Libertine restaurant group pty ltd.
Out of the four financial year quarters in the income year 2017/18 quarter third quarter is
most viable. Since, of the information collected from the profit and loss account of Libertine
shows that company has generated a sales of $36,17,970.95 million in quarter three followed by
$34,83,972.25, 32,15,974.18, 30,81,975.26 of quarter 2, 1 and 4 respectively. The gross profit
and net profit of the company also high in the 3rd quarter as compare other three quarter. Third
quarter of the year has scored 27 percentage of total revenue which is higher as compare to other
quarter. The cash flow analysis of all the quarters has shown that quarter three has a good cash
inflow during that period (Wiltshire, Bourdage and Lee 2014).
7. List any other items you would recommend for inclusion in budgets for Libertine
restaurant groups.
The budget of the Libertine is standard as per the guidelines but there some cost which could
be included while preparing the budget so that there this can increase the transparency of the
account regarding the expenses incurred during the business. For example store supply which
could be recorded separately but it was treated along with the cleaning expanses. The segregation
of the expanses will help the management to know about the source of expanses.

MANAGE FINANCES
8. List new or modified internal control that could improve risk management technique for
Libertine restaurant pty Ltd including the maintenance of audit trails.
The Libertine management can modify the internal control system and make it more effective
by implementing new system software that comprises of new structure and process. The new
software will handle the account reporting of the business (Tompkins 2014). The following are
the most effective internal control system which can be suggested to the management of the
company to minimise the risk associated with the company-
 All the discounts allowed and received have to recorded
 Restore and maintain consistency in the cash register daily
 Proper authorisation that having timesheet and supplier invoices
 Maintain the currency of asset register
 There must be open lines of communication
 All the duties should logically distributed
 Follow the job description
 Maintain the register of duties by employee to terminate or minimize the fraudulent
action.
There some modification can also implement in the Audit also
 List all the directives which includes all cash received receipt on pre-numbered forms,
cheque payment with completed stub, voucher system in duly authorized payment, record the
data to identify the source, cross coded source including electronic entry.
 All the detail paper work of any receipt or payment of cash must be provided as evidences
while audit

MANAGE FINANCES
 There should be a secondary monitory system like cash register or a third person to verify
with a independent system.
 All the payment must be made under proper authorisation by the individual who is
responsible for the department.
9. Discuss the understanding of following and their impact on hospitality:
a)Bilateral or regional trade agreement
Bilateral and regional trade agreements are the two important social phenomenons in
current scenario. A bilateral agreement is made between two contracting parties while
regional is between two or more parties. The aim of the agreement is to reinforce the trade
relation among the traders. With in the World trade organisation (WTO) frame work there
are a number of bilateral and regional treaty has been signed which gives the additional trade
benefits and privilege to the contracting parties. The Australia government also started a
national series of Free trade agreement (FTA) which enhance the business to expand globally
and take the benefits from counterparties.
For libertine restaurant group pty ltd the bilateral and regional trade agreement helps in
expansion of the company as it allows the businesses to contract with the other parties. This
also allows the business to adopt the new business strategy for the growth of the company.
b) International commercial Terms (INCOTERMS)
The international commercial terms are the set of commercial terms published by
International chamber of commerce (ICC) relating to international commercial law.
Incoterms is widely applicable in the international business transition and the implication of
these rules is guided by trade council, court and international players. This provides a
common contractual sales practice. The main rules of the primary intention of the incoterms
are to clearly communicate the task, cost and risk associated with the international delivery
of goods. They determine the price payable, currency exchange and credit terms, accomplish
the law and define the title to goods transfer.
In the present situation this law has no impact on Libertine group but when the company
starts operating globally or import the inventories from international market than incoterm is
useful for the company. Since, it ensures the trader by reduce or remove the uncertainty
altogether which arises from the rules of different countries. This is globally accepted by the
government, legal authorities and practitioners for international trade (Appuham and Bhuyan
2015).

MANAGE FINANCES
c) Trade practice Act
Trade practice act was formulated in 1974 and it has revised into competition and
consumer act 2010. This act is legislative support for the competition law in Australia. This
enhance the competitor for fair trading and drive the competitors along with provide the
protection to consumer. This Act is excelling under the Australian competition and consumer
commission. There are two main objective of the law, first is to covers or protect the
competitors from anti-competitive conduct, unconsolidated practice like advertising. The
second objective is to protect the consumer. The act has setup the consumer’s right and
responsibility and covers the area and policy like return, refund, warranties, contract,
marketing and advertising. This, act guide the business organisation for fair trade practice.
Hospitality business are comes under the service industries and the main task is to
provide better service. As, per the first objective this act enhance the competition and protect
from unfair trade practice which will promote the growth of the company while the
companies need to more customer oriented to satisfy all the norms establish by the Trade
practice act. There is a negative impact on the hospitality industry if any violation of the act
takes place.
d) Warsaw conversation
The Warsaw convention was signed in 1929 in Warsaw was amended in 1955 and 175.
This is a international convention which supervise the obligation for air carriers those crosses
the international boundaries. This convention determines the requirements towards booking
the ticket of passenger and carrier limitation of liability on cases of accident or losses or
damages of baggage. According to the Warsaw convention (clauses 17 and 18) the airline
companies are liable for any damage that affect the passenger while travel during in-flight
but the company is not liable if the damage held due to the passengers own fault. The doctors
are the temporary servant of the airline who needs to respond the captain before assist the ill
passenger. The airlines also deal with the international carriage services. There are certain
rules for document the carriages which company need accomplish.
Therefore the airline companies under hospitality industry will always be careful about
the customer and need to cover by the insurance to meet any contingencies losses that may
happens.
e) World trade organisation determination
World trade organisation is an international body of UNO. The WTO determines the
international trade rules. The rules framed by WTO comprises of international trade in goods,
services and intellectual property. Thus, Australia has been a member of WTO since 1995 so
all the trade determination has a impact on the Australian business industries which includes
the hospitality also. WTO provides a forum to frame the trade rules and agreement. This
provides a dispute resolution to solve any issues relates to trading. As, Australia is the
member of the World trade organisation so it review and determines the domestic trade
policies of Australia. According WTO every country has the same weight while taking a
decision or signs an agreement.
Coming to the hospitality industry point of view WTO has some direct and indirect
impact on the business as monitor the trade and review the trade practices. World trade

MANAGE FINANCES
organisation helps in create a trade environment and can enhance the growth of the business
globally.
Assessment 2
1. Issues which can be identified
The matters that can be detected from the budgets that are prepared by the organisation
can be enumerated below:
 The cost that the business incurred is high, in comparison to the cost that is estimated by
the management.
 The budget cannot detect the discount provided by the business to its customers.
 Improvement in the cash management policy required as the business fail to maintain an
appropriate policy to manage their cash.
 Debtor’s reconciliation is not done on regular interval, for which the debtors balance in
the financial statements cannot be effectively measured.
The issues that are related with the financial integrity which is associated with the
budgets can be detected are ineffective internal control system which is not capable to update the
budgets that is made by the business (Chang 2016). Further, it is observed that there is scarce
supply of skilled labour, which can look after the budgets of the business, efficiently.
Analysis of variances in budgets
The variances are calculated by deducting the budgeted results of the business from the
actual results of the business. It is observed from the variance report of the business that the
actual sales is greater than the estimated sales figure, which indicates that the company is

MANAGE FINANCES
performing efficiently (Sreejesh 2014). The expense incurred by the company is more than the
estimated expenses for which unfavourable balance appeared in the variance report. The actual
tax expenses exceeded the tax expenses, which are estimated by the business.
Budget Variance report - 30th September 2017
Libertine restaurant group Pty Ltd
Profit & Loss Actuals
1st Quarter
actuals
1st Quarter
budgeted Variance Variance
% F or U
Revenue
Food Sales $29,23,300.65 $26,05,861.58 -$3,17,439.07 -12.18% U
Beverage sales $16,94,514.17 $17,44,325.66 $49,811.49 2.86% F
Cost of goods sold
Food Costs $6,19,490.65 $6,80,527.84 $61,037.19 8.97% F
Beverage costs $2,88,483.47 $4,53,685.22 $1,65,201.76 36.41% F
Gross Profit $37,09,840.71 $32,15,974.18 -$4,93,866.52 -15.36% U
Expenses
Accounting Fees $2,500.00 $2,500.00 $0.00 0.00% F
Interest Expense $21,127.00 $21,127.00 $0.00 0.00% F
Bank Charges $400.00 $400.00 $0.00 0.00% F
Depreciation $42,500.00 $42,500.00 $0.00 0.00% F
Insurance $3,858.75 $3,347.50 -$511.25 -15.27% U
Stationary supplies $998.92 $3,992.75 $2,993.83 74.98% F
Advertising $1,95,287.00 $2,00,000.00 $4,713.00 2.36% F
Cleaning $7,892.65 $814.80 -$7,077.85 -868.66% U
Repairs & Maintenance $11,431.72 $16,068.00 $4,636.28 28.85% F
Rent $6,60,127.00 $6,33,721.92 -$26,405.08 -4.17% U
Telephone $4,028.86 $3,599.23 -$429.63 -11.94% U
Electricity Expense $28,700.57 $25,394.05 -$3,306.52 -13.02% U
Gas Expense $13,645.41 $12,959.98 -$685.43 -5.29% U
Luxury Car Tax $8,041.00 $1,810.05 -$6,230.95 -344.24% U
Fringe Benefits Tax $7,000.00 $7,000.00 $0.00 0.00% F
Superannuation $1,49,333.85 $1,25,553.59 -$23,780.26 -18.94% U
Wages & Salaries $16,59,264.97 $13,95,039.86 -$2,64,225.11 -18.94% U
Payroll Tax $78,815.09 $66,264.39 -$12,550.69 -18.94% U
Workers’ Compensation $33,185.30 $27,900.80 -$5,284.50 -18.94% U
Total Expenses $29,28,138.08 $25,89,993.92 -$3,38,144.16 -13.06% U
Net Profit (Before Tax) $7,81,702.62 $6,25,980.26 -$1,55,722.36 -24.88% U
Income Tax $2,34,510.79 $1,87,794.08 -$46,716.71 -24.88% U
Net Profit $5,47,191.84 $4,38,186.18 -$1,09,005.65 -24.88% U

MANAGE FINANCES
Budgeted aged debtors report
2015/ 16 2016/ 17 2017/ 18
Corporate Debtors $1,19,830.00 $1,87,270.00 $2,16,271.25
Sales $1,46,10,330.00 $1,62,64,105.00 $1,81,25,780.18
Debtor Days 2.99 4.20 4.36
2. Performance
From the results of the business, it can be identified that the management is doing well in
terms of generating profit from the business. The market of restaurant business is growing
rapidly in Australia. The competition in the restaurant business is also high which affects the
business of libertine restaurant Pty ltd.
The anxiety of the directors regarding the financial feasibility of the restaurant is
answered by the reports and budgets that are calculated by the management of the organisation.
The budgets reveal that the business has achieved the sales figure, which has been expected by
the management of the organisation in comparison to the sales figure of the current year. The
variance report, which analyse the comparison between the actual sales and the estimated sales
shows that the growth in sales and profit is increasing .as per the present estimates of the
business, the management is sure about the efficient performance of the business in terms of
profitability (Parmeter and Kumbhakar 2014). The level of efficiency is also high as per the
budget made by the management. This ensures the management that the company will be able to
sustain the gross profit margin of the business.
The policy of the company with regarding their debtors reflects that in the third quarter
the credit period is increased remarkably. The management estimates that the sales figure will

MANAGE FINANCES
increase in the coming years and for that, they want to revise the policy to improve the
comprehensive sales figure of the company.
Financial Outgoings KPI's - Actuals - 30th September 2017
Outgoings 1st Qtr
Budgeted
1st Qtr
Actuals
Food cost % 26.12% 21.19%
Beverage cost % 26.01% 17.02%
Labour cost % 32.07% 35.93%
Total expenses/ Total sales % 59.54% 63.41%
Recommendation
The suggested recommendations to the management of libertine restaurant Pty ltd are
stated below:
Improvement required in the overall cost structure of the business. The cost structure of
the business always crates problem for the organisation as the company never being able to
control the increase in the figures of the cost of production.
The financial management structure of the company needs improvement and new
software for accounting is required to be installed to record the income and expenditures in way
that is more transparent.
3. Financial management process in place
The organisation has efficient management policies that include the cash management
and the debtors’ management policy. The business has plans to increase the profitability of the
business by increasing the network of customers and at the same time, it tries to make good

MANAGE FINANCES
relation with the customers of the business (Jeston 2014). The management of the company
maintain a cash register where it records all the daily cash transactions of the business (Vij and
Bedi 2016). The sales manager has taken the responsibility to record the debtor balances and take
the charge of maintaining the credit sales balances and reconciliation of the same. The business
deposits the cash in the bank account of the company on day-to-day basis.
The ineffective management and monitoring of the cost of the business are the main
reason for variance in the business. The management failed to monitor the key activities of the
company like the cash management reconciliation of the cashbook, debtor management and
reconciliation of the debtors balance. The suggested recommendations for the management is
that it requires improvement in the management policies of the business and set up a high
standard of supervision and control in order to decrease the level of variances of the business.
The management should look after the matters like timely deposit of cash in the bank account of
the business and that the respective department maintained a systematic process of receiving the
cash from the customers

MANAGE FINANCES
Reference and Bibliography:
Appuhami, R. and Bhuyan, M., 2015. Examining the influence of corporate governance on
intellectual capital efficiency: evidence from top service firms in Australia. Managerial Auditing
Journal, 30(4/5), pp.347-372.
Barkoczy, S., 2016. Foundations of taxation law 2016. OUP Catalogue.
Barkoczy, S., 2017. Core tax legislation and study guide. OUP Catalogue.
Bottomley, S., 2016. The constitutional corporation: Rethinking corporate governance.
Routledge.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
De Simone, L., 2016. Does a common set of accounting standards affect tax-motivated income
shifting for multinational firms?. Journal of Accounting and Economics, 61(1), pp.145-165.
Dfat.gov.au. 2019. Australia's free trade agreements (FTAs). [online] Available at:
https://dfat.gov.au/trade/agreements/pages/trade-agreements.aspx [Accessed 21 Mar. 2019].
Dfat.gov.au. 2019. World Trade Organization. [online] Available at:
https://dfat.gov.au/trade/organisations/wto/pages/the-world-trade-organization.aspx [Accessed
21 Mar. 2019].
Eldovića, E., Vukašinovića, M., Tešića, M. and Bijelić, S., 2015. International commercial
terms-Incoterms 2010. In 2nd Logistics International Conference, Belgrade, Serbia.

MANAGE FINANCES
Fooks, G. and Gilmore, A.B., 2014. International trade law, plain packaging and tobacco
industry political activity: the Trans-Pacific Partnership. Tobacco control, 23(1), pp.e1-e1.
Horngren, C. and Harrison, W., 2015. ACCOUNTING: BSB110. Pearson Higher Education AU.
Jeston, J., 2014. Business process management. Routledge.
Levine, W.S., 2018. Control system fundamentals. CRC press.
Livermore, J., 2014. Transport law in Australia. Kluwer Law International.
Matsushita, M., Schoenbaum, T.J., Mavroidis, P.C. and Hahn, M., 2015. The World Trade
Organization: law, practice, and policy. Oxford University Press.
Parmeter, C.F. and Kumbhakar, S.C., 2014. Efficiency analysis: a primer on recent
advances. Foundations and Trends® in Econometrics, 7(3–4), pp.191-385.
Ramberg, J., 2011. INCOTERMS 2010. Eur. JL Reform, 13, p.380.
Rose, J., 2014. The public understanding of political integrity: The case for probity perceptions.
Springer.
Sreejesh, S., 2014. Business research methods: An applied orientation. Cham: Springer
International Publishing: Imprint: Springer, 2014.
Tompkins, G.N., 2014. Are the Objectives of the 1999 Montreal Convention in Danger of
Failure?. Air and Space Law, 39(3), pp.203-214.
Vij, S. and Bedi, H.S., 2016. Are subjective business performance measures
justified?. International Journal of Productivity and Performance Management, 65(5), pp.603-
621.

MANAGE FINANCES
Wiltshire, J., Bourdage, J.S. and Lee, K., 2014. Honesty-humility and perceptions of
organizational politics in predicting workplace outcomes. Journal of Business and
Psychology, 29(2), pp.235-251.