Comprehensive Financial Management, Budgeting, and Debtor Project

This financial management project comprises several assessment tasks, beginning with questions on taxation, GST, cash accounting, and ABN. It proceeds to a financial management project centered on Grow Management Consultants, involving a business plan review, analysis of organizational goals, and an examination of profit and loss statements and cash flow. The third task focuses on budget review, calculating variances from budgeted figures and determining gross and net profit margins for Grow Company, along with recommendations for enhancing the profitability of future conferences. The final task addresses debtor management, analyzing debtor reports, explaining best practices, and providing recommendations for their implementation within the company.

Assessment Tasks
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Contents
Introduction:..........................................................................................................................................3
Assessment Task 1 – Written Questions................................................................................................4
Assessment task 2: Financial Management Planning Project................................................................7
Assessment Task 3 – Budget Review Project.......................................................................................11
Assessment Task 4 – Debtor management Project..............................................................................17
Conclusion...........................................................................................................................................21
References...........................................................................................................................................22
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Introduction:
The project has a number of assessments tasks. It starts with questions relating to accounting
regarding tax rate, GST, cash accounting and ABN. Further, the next task is a financial
management project which is based on Grow management consultants which include
reviewing the business plan, analysis of goals and priorities of the organization and analyzing
the profit and loss statement and its cash flow. The third task is about the budget review in
which variances with budgeted figured has been calculated and gross and net profit margin
for the Grow Company has been calculated. Finally, recommendations for making the future
conferences profitable have been made. The last task four is about debtor management in
which debtor report has been analyzed and best practice debtor management has been
explained. Further, the recommendations for using this practice are made for the company.
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Assessment Task 1 – Written Questions
1. List the four main taxation and superannuation obligations for a business. Briefly
discuss it.
For an employee the employer will withhold tax from their wages, pay super that is
superannuation for the employees, fringe benefits tax that is if the employer provides certain
benefits to the employee and payroll tax that is if an employer pays more than $ 21153 in a
week then it has registered in the group only for Queensland.
2. What is the current company tax rate for both smaller and larger businesses?
For small businesses tax rate is 28.5% if their turnover is up to $2 million. This is planned to
be reduced further. For larger businesses it is 30%
3. Explain the principle of cash accounting
Cash accounting is based on recording transactions for incomes and expenses when they are
settled in cash.
4. List one advantage and one disadvantage of cash accounting
The advantage is that this system is easy to understand as transactions are only recorded
when they are settled in cash
The disadvantage is that system relies on single-entry system and according to the accrual
principle double entry system is necessary
5. Explain the principle of accrual accounting
This principle says that accounting transactions should be recorded in the period in which
they occur not in the period in which they are settled in cash.
6. List one advantage and one disadvantage of cash accounting
The advantage is that this system is easy to understand as transactions are only recorded
when they are settled in cash
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The disadvantage is that system relies on single-entry system and according to the accrual
principle double entry system is necessary
7. What is the process by which a business would report GST to the Australian tax
office?
If the company has sales of more than $20 million than it would report and pay every month.
If it is less than that then it has the same process quarterly, unless otherwise told. Annually if
its turnover is below $75000 and it’s a voluntary registration (Ato.gov.au, 2018).
8. What is the penalty rate to be applied if a supplier does not provide an ABN?
If the entire sum of goods and services exceed $75 (excluding GST) and supplier has not
provided ABN, then the highest rate of tax from the amount to pay will be held (Ato.gov.au,
2018).
9. A non-profit organization needs to register for GST after it has a turnover of more
than how much?
If the turnover of the non- profit exceeds $150000 then it has registered for GST (Ato.gov.au,
2018).
10. Who must have their financial report audited?
A company (not a small proprietary company), disclosing entity or a registered scheme
should get its financial reports prepared yearly audited and get a report from the auditor
(Asic.gov.au, 2018).
11. What is the purpose of an audit and auditor’s report?
According to the company’s act, certain companies are under obligation to get their accounts
audited. Its purpose is to verify the accuracy of the financial statements and auditor’s report
certifies that the accounting information provided by the company is accurate.
12. Provide four examples of what would be considered fraudulent behavior in regard
to company finances.
The following activities would be considered fraudulent –
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 Check forgery
 Check Tampering
 Theft of Cash
 Expense account fraud
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Assessment task 2: Financial Management Planning Project
Part A:
1 Review the business plan and the organisation’s operational priorities for the
upcoming year.
Grow consultancy business plan is to run a conference annually each year starting in 2016.
The business plan and the operational priorities for the upcoming year are to replace
workshop with the annual reference. The company’s business plan is to generate sales for the
e- books and to increase the profit over the time.
2 Review the estimated income and costs for the reference and e-book to be
implemented in 2016
The estimated income and cost for e-book is to generate the $10000. It is estimated that the
cost of the conference is have been set up by principal consultant. The cost is $750 per person
and it is aimed that 100 people will attend the conference. So the total cost which will
implement in 2016 is $75000 (Annual report, 2015).
3 Prepare a report for the principal consultants using the template provided by your
assessor that includes:
P&L Statement:
The manager has generated the revenue in the previous year 2014 with the amount of
5376733 which has increased in the year 2015 with the amount of 5474972. In year 2014 the
company has incurred loss with the amount of 152447 and in year 2015, the company again
incurred a loss with the amount of 336414. All the revenues and incomes arrived by
rendering a services to the customers. Interest rate, donation, no reciprocal grant revenue, etc.
is recognised in generating the revenue. The company is facing a loss because it has to pay
all expenses such as advertising, depreciation, staff, telephone, etc. which is more than the
revenue (Annual report, 2015).
Organisational goals and strategic business plan and financial resources:
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The companies organisational goal and business plan is to have an annual conference in the
next financial year and to replace the workshop because people doesn’t attend that. The
company’s financial position is good as companies have more assets than its liabilities. The
company’s total asset in year 2015 is 4409488 and the company total liabilities are 1477895
so the company’s net asset is 2931593 (Annual report, 2015).
Cash flow statement trends:
Grow consultancy cash flow statements contains operating, investing and financing activity.
In year 2014, the operating activities have negative balance of 113121 and in year 2015, it
has a positive balance of 42245. The investing activities of the company in year 2014 are
68420 which have increased in year 2015 with 78862. The financing activities of the
company in year 2014 are 3202919 which have decreased in the year 2015 with 3166302.
The major change has occurred in the operating activities in receipts of the customers and
donation (Annual report, 2015).
Advantages and disadvantages of MYOB Software:
MYOB is an accounting software program which is mainly used for the small and medium
business. MYOB is a program which is accessible over the internet. It is the necessary
function for the business. Computerise accounting helps the users to do a lot of transactions at
the same time. This software helps in saving the time and money. Maintaining this kind of
software helps in the reliability and accuracy in the business. There are disadvantages also
there can be a loss of data through failure of power, viruses, through hackers. MYOB is a
cloud based accounting which enhances their financial and operational working for the
efficient organisation. It helps in reducing the time waste on the processes which cause
inaccuracies and also manage the cash flow, payroll, etc. (Arcega, 2014)
4 Develop budget forecast
Budget is the estimation of the future plan. The general manager of the company will review
the budget of allocating funds. It is assumed that the 5% increase in the general cost as well
as 10% increase in income for consulting and executive services will lead to overall growth
of the business. It is estimated that conference will be attended by 100 people paying $750
each. Budget forecasting helps in analysing the financial performance and also measure the
actual performance with the budgeted data.
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Part B:
1 Report on the business key financial requirement:
GST: The Company has paid GST in the year 2014 with the amount of 1908 and in year
2015, the company with the amount of 215. The company has to fulfil the GST requirement
quarterly. (Annual report, 2015)
PAYG obligation: The general manager of the company has the duty to withholding the rules
to collect tax and to meet with their tax liability. The company has paid income tax in the
year 2014 is 152447 and it has increased in the year 2015 is 336414. (Annual report, 2015)
PAYG instalment: The Company has paid income tax instalment quarterly. To pay income
tax timely is very essential for the company otherwise it would have negative impact on the
company.
Payroll tax obligation: Payroll obligation is the tax responsibility of the employers who has to
pay the taxes such as medical taxes, social security, etc.
Frequency of payment: The Company has to do the payments on time with the requirement to
comply with the legislation. The payment of tax, payroll should be made according to law. To
report the staff regarding the details of the company, expenses, and revenues is all important.
Resources should be allocated properly and choices of funds should be made wisely. (Philo,
2016)
2 Requirements to manager:
The meeting should be attended only when there will 100 people presenting over there. In the
meeting the company will also explain about the financial delegations. The company has to
comply with the policy and procedures for the effective working. The manager needs to
discuss the functioning of the company and also to make a budget which forecast the future.
3 Discuss in the meetings:
The budget which has made earlier is discussed in the meeting. The budget is made to replace
the workshops with the annual reference. The budget is made to increase the sales. It is
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discussed in the meeting that there will be no more workshop will be created as it is not
attended by people. The manager has also discussed about generating the sales of worth
$10000. The company has generated conference cost $750 each. The company has to fulfil
the entire requirement along with the policies and procedures of finance. The company has a
liability to pay a tax of amount 336414 in the year 2015. (Annual report, 2015)
4 Communication skills:
In the meeting the communication skills of the manager should be proper so that it could be
understand by the other people of the meeting. He should speak properly and have a good
communication so that it can easily accessible by everyone. He should response to the
questions which has asked to him. He should listen properly to answer the accurate answer of
the question and also he has a knowledge regarding the information. He should give the
information regarding the budget and the have a complete knowledge about the financial
position of the company (Fujimori, 2014).
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Assessment Task 3 – Budget Review Project
1. Analyse the information
Overall performance and Gross/Net margins
Gross Profit margins (Revenue-COGS) / Revenue
COGS 1709014
Gross profit margin 0.698169357
Net Loss margin Net Loss/ Revenue
0.046076393
After seeing the gross and net profits of the company it can be said that the company has
higher revenues when compared with its operating expenses. This gives the company gross
profits but when it comes to net profits the company has higher non-operating expenses
which push the company into losses. It can be said that company has to increase its revenues
to meet the rising costs and at the same time to develop cost control measures (Knight, 2012).
As the company is in losses the Net loss margin has been calculated.
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Variations in Actual vs. Budgeted amounts for income and costs:
Particulars
2016
(Actual)
2016
(Budgeted) Difference Variance
Income
Grants (recurrent) 4801036 4679766 -121270
-
2.52591315
7
Grants (non-recurrent) 45781 3479 -42302
-
92.4007776
2
Other grants 1699 11550 9851
579.811653
9
Fundraising 61243 55220 -6023
-
9.83459334
1
Donations 108402 95835 -12567
-
11.5929595
4
Interest received 99003 115062 16059
16.2207205
8
Other income 286406 250722 -35684 -
12.4592361
12