GMC Financial Analysis and Budgetary Planning: 2018-2019

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MANAGE FINANCES
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Table of Contents
Assessment Task 1: Written questions........................................................................................................ 3
Question 1............................................................................................................................................... 3
Question 2............................................................................................................................................... 3
Question 3............................................................................................................................................... 3
Question 4............................................................................................................................................... 4
Question 5............................................................................................................................................... 4
Question 6............................................................................................................................................... 5
Question 7............................................................................................................................................... 5
Question 8............................................................................................................................................... 6
Question 9............................................................................................................................................... 6
Question 10............................................................................................................................................. 6
Question 11............................................................................................................................................. 6
Question 12............................................................................................................................................. 6
Assessment task 2: Planning project........................................................................................................... 8
PART A: ANALYSE FINANCES AND PREPARE BUDGETS.................................................................8
PART B: MEET WITH MANAGEMENT TEAM......................................................................................11
Assessment Task 3: Review project.......................................................................................................... 13
Assessment Task 4: Debtor management project.....................................................................................19
References................................................................................................................................................ 21
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Assessment Task 1: Written questions
Question 1
Taxation and superannuation obligations for business include:
 Providing employment in Australia- If a person provides employment in Australia then
that person will have tax obligations relating to them.
 Withholding of Tax on making payment to foreign residents- If payment is made to any
person outside Australia being non-resident then the person will have tax obligation on behalf of
such non-resident person.
 Payment made to employees above threshold limit- If the employer is making payment
to any of the employee exceeding $450 then such a person has the obligation of
superannuation.
 Capital Gain Tax-If the asset is sold by a non-resident then, in that case, capital gain is
taxed on such property and paid by the seller (Gallery, et. al, 2004).
Question 2
a) For business- Registration required if:
 Turnover exceeds $75000
 Provides taxi or limousine travel for passengers and charging cost for such service
 Claim for fuel tax credits
For Non-Profit Organization-Registration required if turnover is equal to or more than $150000
per year.
b) For claiming of GST Credit tax invoice is required if the invoice cost is more than $82.50
(including GST). If the amount exceeds the threshold limit explained above then it is necessary
to issue an invoice.
c) Details identified on the tax invoice for sales over $1000 includes:
 The document provided intends to be a tax invoice
 Identity of seller
 Australian business number(ABN) of the seller
 Issue date of invoice
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 Description of items sold which includes the quantity and price of the product
 GST amount payable
 Details of taxable sale i.e. extent to which each sale is a taxable sale
 The identity of buyer or Buyer’s ABN
d) Cash method, as well as non-cash (accrual) method of accounting, can be used for the
small businesses having an aggregate turnover of less than $2 million to account GST.
However, large business generally uses the accrual method of accounting.
Question 3
The company is a separate legal entity which has a higher setup and administration cost in
comparison to other entities and also company has an additional reporting requirement for
taxation which includes:
 Apply and have Tax file number(TFN) which is used while filing an annual return
 Registration for GST if turnover exceeds the threshold limit of $75000
 File annual tax return of the company
 Pays tax at rates applicable to companies
 If eligible then claim small business concessions
Question 4
A):
PAYG withholding PAYG Income Tax Instalments
The PAYG withholding is a type of tax that can
be collected from the Employee in every year.
The PAYG Income Tax Instalments is also the
type of tax that can be collected from an
employee in advance it depends on
taxpayerhow much tax can pay tax for further
deduction.
It’s compulsory. It’s not compulsory.
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A fixed amount of tax from the government. It’s depending on taxpayer.
B):
 Registered under PAYG withholding.
 The Australian taxation office provides informationon taxation.
 Organization has maintained the record of an individual employee for the deduction of
the PAYG tax.
 Provide the annual taxation summary.
 The employee has to take interest or awarenessof the PAYG tax (Law Path, 2019).
Question 5
Cash accounting
Cash accounting is the part of accounting; the cash accounting is doing the tally of financial
transaction on the receipt and payment basis. The cash accounting gives the result of income
and expenses.
Advantage
 The cash accounting is the simplest method to record the financial transaction, it is easy
to operate.
 Cash accounting does not have to make a different statement of cash.
Disadvantage
 The cash accounting records on payment and receipt basis so it does not make the
correct profitability.
 The cash accounting is not useful for the large organization.
Question 6
Accruals accounting:
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In the Accruals accounting, it records the income and expenses in the accruals basis that
means they do not follow the date of payments and receipt with the invoices (Azhari, et. al, 2018).
Advantage
 It provides the original data of the organization with the double entry system.
 This helps to the large organization for making the profitability.
Disadvantage
 For the use of accruals accounting, they have to require the perfect knowledge of the
double entry system.
 This is expensive accounting, to be maintaining the effective knowledgeable person.
Question 7
 Financial accounting
Financial accounting is the accounting system for maintenance or records of the financial
transaction and this is the main part of the organization. The financial accounting is following the
rules and regulation for the particular task or reports for the external part of the organization.
 Management accounting
Management accounting is the recording, analyzing, the evolution of the data of financial
accounting and cost accounting for achieving the organizational goals (Horngren, et. al, 2010).
 Accounting standard
The accounting standard will work on the financial reporting guidelines and system to present
the financial performance of the organization. The standard is the legal arrangements for the
financial reports of the transaction.
 Financial accounting system
The financial accounting studies on the financial data to collecting, recording and advising to get
the best result for the organization. Many of the organizationsare following the financial
accounting system for helping the plans effectively and to achieve (Yahya, et. al, 2018).
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Question 8
Financial audited report
 The large organization has to make the audit mandatory for the entire
 Organization in the incorporated association act.
 All participants have to maintain the property with their turnover.
 Also, all organizations have to make the investment scheme for more earning.
Question 9
The audit report has to make for the external and up gradation of the organization. The audit
report consist of all the financial statement of the organization and that would be registered in
the audit manager and that audit file will go in the bank also. The audit file makes the attraction
among the stakeholders for the investment in the organization. The audit file consist of all the
presence and non-presence particles, the material of the financial part that all show in the audit
file in the concise form.
Question 10
Financial probity
Financial probity means the performance of the organization with honesty and integrity, all data
of the financial transaction will true that shows the ethical behavior of the organization. The
organization has to maintain the financial probity for making the goodwill and truthfulness
among the entire customer (Finance, 2019).
The financial probity creates value for both customer and organization.
Question 11
Considered fraudulent behavior in regard to company finances
 Miss transaction recorded
 Fake transactions were recorded for making the profit and loss strong for the
stakeholder or external part of the organization.
 Miss lead the stakeholders
 Expenses were not recorded for increment in profit.
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Question 12
Difference between Generally Accepted Accounting Principles (GAAP) and the
International Accounting Standards
Generally Accepted Accounting Principles International Financial Reporting Standards
The generally accepted accounting principle is
to impress the stakeholders to do investment
in the organization.
This principle uses to make for the
entireorganization in the world to show the
financial performance.
It is based on the rule. This is based on the approach.
It makes for stakeholders It makes for all the persons in the world.
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Assessment task 2: Planning project
PART A: ANALYSE FINANCES AND PREPARE BUDGETS
Introduction
In this report, it will discuss the financial information of growing management consultants
(GMC). It identifies the accounting software to make the financial budget for the development of
the organization. In this report, it will identify and solve the financial performance of the
organization to achieve the organizational goal.
Analysis of financial performance and cash flow trends:
As per the profit and loss statement of Grow Management Consultant (GMC), the
organizationhas achieved the revenue from the consulting services and executive services. The
GMC is earning the revenues from professional workshops is $38000 has been generated in
2017-18. In the year of 2017-18, GMC paid the wages and salaries to the employee that is
$504000 that is the highest cost in this year and they earn the $652077 profit in the same year.
In the current situation, the organization has founda new strategy to earn more profit that is
diversified services and they are earning great profit.
Currently,organization having the goal of generating the income from sales that is $10000 from
the E-books and organization is preparing the best quality services to the customers and they
are achieving the maximized profit from this. It is generating the income from the operation
management for minimizing the cost of operations. They have earned the $16782 cash flow
from the operations activity and inflow is the $82500. The PAYG withholding is a type of tax that
can be collected from the Employee in every year. The PAYG Income Tax Instalments is also
the type of tax that can be collected from an employee in advance it depends on taxpayer how
much tax can pay tax for further deduction (Ato, 2019).
The budget forecast for the next financial year is as follows:
Sales & Profit Budget 2018-2019
Particulars Amount ($)
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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 1,550,170
Less: Expenses
– Accounting Fees 7,164
– Advertising & Marketing 5,513
– Computer Software 4,830
– Insurance 7,875
– Lease/Loan Payment 1,575
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– 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
– Utilities 2,520
– Travel and Accommodation(For Workshops) 25,200
– Contract writer (e-book) 10,500
– E-book 10,000
– Desktop publishing 3,000
–Marketing (e-book) 1,200
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