Financial Performance Report and Budget Forecasts for 2018-2019

Desklib provides past papers and solved assignments for students. This project covers financial management, budgeting, and debtor management.

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Manage finances

Contents
Assessment Task 1: Written questions........................................................................................................ 3
Explain the four main taxation and superannuation obligations for a business. Briefly discuss each
obligation................................................................................................................................................. 3
Assessment Task 2: Planning project........................................................................................................ 10
PART A: FINANCES AND PREPARE BUDGETS.................................................................................10
PART B: MEET WITH MANAGEMENT TEAM......................................................................................15
Assessment Task 3: Review project.......................................................................................................... 16
Assessment Task 4: Debtor management project.....................................................................................24
References................................................................................................................................................ 26
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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)
2. Answer the following questions relating to GST in Australia:
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.
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b) 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).
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
d) What accounting method would a small business with an aggregated turnover of less
than $2 million use to account their GST?
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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.
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).
3. Answer the following questions relating to Pay-as-you-go (PAYG) in Australia:
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
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cash installment at year's last for example this helps with hard income. (Jurevičienė et. Al.,
2012)
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.
4. 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
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 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.
5. 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)
7. Describe the following terms:
a) Financial accounting
b) Management accounting
c) Accounting standards
d) Financial accounting system
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• 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
8. 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.
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.
10. 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
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honesty. (Joshi et. Al., 2013). The standards of fidelity and morals are trustworthiness and
respectability, straightforwardness, pertinence, moral conduct, great aim, and esteem creation.
11. 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.
12. 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.
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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.
2. 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.
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 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 .
3. Develop budget forecasts for the next financial year
Sales & Profit Budget 2018-2019
Particulars Amount ($)
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 Sales 1,550,70
Less: Expenses
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– 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
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