BSBFIM501

 Assessment Task 1- Written Report………………………… .…..................3

Introduction…………………………………………………….....................3

 Team budgets and financial plans…………………………….....................3

Making changes to team budgets or financial plans…………....................7

Contingency planning………………………………………….....................8

Financial Management Approaches………………………………..............9

Assessment Task2- Written Report………………………………..............10

Monitor and control Finances………………………………………...........10

Review Variances……………………………………………………............15

Review and Evaluate Processes…………………………………….........….17

ASSESSMENT TASK 1- WRITTEN REPORT

INTRODUCTION:

Kathmandu furniture is a manufacturer based in Glenorchy, Tasmania. The company produces furniture’s which are sold to relaters in the Australian market. According to company strategic plans, the company aims to achieve a net profit before tax of $1000,000. The major risk to this goal are:

Poor sales due to economic downturn

Increase in expenses such as wages

In further, Australian preparations, the company is considering manufacturing overseas to take advantage of reduced costs. The company is also considering diversifying its product range to reduce poor sales of one product.

Budgeting and finance policy plan is very important as it helps to set the parameters for all financial budgeting. There are various plans and policies which should be followed strictly. All the reporting requirements, financial delegation and format for budgets and reports plays important role in whole plans and project.

1) Team budgets and financial plans.

The name of my organisation is Kathmandu furniture pty ltd. Furniture industry, all the companies and activities involved in the design, manufacture, distribution, and sale of functional and decorative objects of household equipment. ... Earlier furniture making was a handicraft, going back to the most ancient civilizations. The growing sophistication in technique brought a revolutionary change in the men who made furniture. Where previously carpenters and joiners had made furniture along with every kind of building construction in wood, several circumstances combined to create a new profession: that of cabinetmaker.

The senior management structure of the company is given below:

Cash Flow projection

Long-term budgets/plans

Long term budget is a budget plan for long time of period more than one year. In long-term budget the uncertainty is more than in short-term budget because the market cycle and its movements are more easily forecast in the short-term budget plan. Long-term budget is specially used in big business with big amount of investments. There are three types of budget such as balances budget, surplus budget, and deficit budget.

Operational Plan

Operational plan is also known as work plan. It is a figure of our department will give emphasis for the future use, mostly for coming year. Just we need to put our strategic plan with our future goal while making operational plan and we need to get it in daily to weekly basis. It is plan which provides a clear picture of how a team or department will do the activities to get the objective of an organisation’s aim.

Store Budget

Targets or KPI for production, productivity, wastage, sales, income and expenditure

Master Budget with Profit Projections

2) Making changes to team budgets or financial plans.

The purposes of budgeting are for resource allocation, planning, coordination, manage and motivation. It is additionally an important tool for choice making, monitoring enterprise performance and forecasting profits and expenditure. With suitable budgeting, limited sources are managed efficiently.

Budgeting is indispensable in the business planning process. A commercial enterprise owner has to predict whether or not the corporation will be profitable. Budgeting offers a mannequin of the manageable economic performance of a business, given that precise strategies and plans are followed. It provides a monetary framework for making essential decisions. To control a enterprise effectively, expenditure ought to be appropriate controlled. An instance of how budgeting performs a function in decision making is when spending money on advertising. When the finances allocated for this aspect has been absolutely used, the decision is probable to cease spending cash on it. Budgeting additionally helps measure the forecast business overall performance towards the real commercial enterprise performance.

Yes, it is achievable because of the variation in plans it helps to analyse the problem or lack in the team budget and financial plans. It is accurate because the software applications to be used in reporting are very reliable and accuracy rate is high such as

software environment-windows

Accounting Information System-BRB will use MYOB Account Right plus.

Data analysis-BRB will use Microsoft Excel

Actual results will be produced monthly by the MYOB accounting System. Actual variances to budget will be performed by Excel with a report prepared for senior management for significant variances.

Budgeting and finance policy

Budget preparations

-Variations to the enterprise layout have to be authorised by the CEO and senior managements strategic committee.

-The business design will set key parameters for all monetary budgeting.

-Prior consequences are to be analysed in order to pick out the profit level value centres, discover relationship between monetary information and set key performance symptoms and benchmarks for the future budgets.

-The price range planning committee will meet prior to price range being developed and agree on finances parameters. The committee will consist of all branch managers plus the CEO and finance manager.

-A Capital Expenditure finances will be developed from the accredited enterprise plan.

-Sales budget have to the first three months will be organized after the earnings price range is completed. A grasp budget including income projections will be accomplished from this grasp price range value centre allocation.

-The role of Chief Financial Officer within the organisation who I would approach to discuss and clarify the team budget/financial plan are

Providing leadership, course and management of the finance and accounting crew

Providing strategic tips to the CEO/president and individuals of the executive management group

Managing the techniques for financial forecasting and budgets, and overseeing the guidance of all monetary reporting

Advising on long-term business and financial planning

Establishing and developing relations with senior management and external partners and stakeholders

Reviewing all formal finance, HR and IT associated procedures

Contingency Planning

A massive section of a manager’s feature is planning. Planning includes getting ready contingency plans in the event the initial plans need to be varied. Using the crew budget/ monetary graph in the previous part, 5 an instance of a state of affairs or event that would purpose a problem/ trouble in the course of the implementation section of the team budget/ economic plan.

A contingency plan is a diagram devised for a result different than in the common (expected) plan. It is regularly used for danger administration for an extremely good threat that, even though unlikely, would have catastrophic consequences. Contingency plans are regularly devised via governments or businesses. For example, think many employees of an organisation are journeying collectively on an aircraft which crashes, killing all aboard. The enterprise ought to be severely strained or even ruined with the aid of such a loss. Accordingly, many corporations have processes to comply with in the event of such a disaster. The diagram may additionally encompass standing policies to mitigate a disaster's practicable impact, such as requiring employees to tour one after the other or limiting the range of employees on any one aircraft.

A contingency sketch is a route of action designed to assist an organization respond correctly to a vast future event or scenario that can also or can also now not happen. A contingency graph is every so often referred to as "Plan B," due to the fact it can be also used as a choice for motion if anticipated effects fail to materialize.

When planning our building project, setting up a budget is one of the first steps in planning a profitable project. Setting a layout for where to spend the money, and budgeting for all the work takes both interest to detail and a complete scope of the project. However, there is often instances unforeseen issues, or items that come up the place extra work will be needed. This is the place a contingency finances turns into critical. A contingency finance is money set apart to cover unexpected prices all through the building process. This money is on reserve and no longer allocated to one region of the work, and certainly “insurance” in opposition to other costs. As tasks progress, once in a while mild can be shed on opportunities for future prevention, or opportunities for improvements. For example, whilst the assignment is happening, proprietors would possibly suggest an improve to a better piece of gear that is in perfect operating condition, however while walls are open, it is an exact time to upgrade.

The predicted consequence if the contingency format used to be applied then it helps us quickly take steps to tackle a trouble that may want to end production, shut down website, cause us to lose work and data or miss credit payments. A simple instance of a contingency diagram is having a backup generator in the event of an electricity failure. The purpose of a contingency layout is to enable an organization to return to its each day operations as rapidly as possible after an unforeseen event. The contingency graph protects resources, minimizes client inconvenience and identifies key staff, assigning particular duties in the context of the recovery.

Financial Management Approaches

According to the new approach, the monetary administration is involved with the answer of the primary areas relating to the monetary operations of a firm, viz., investment, and financing and dividend decisions. The cutting-edge monetary manager has to take monetary selections in the most rational way. So, finance functions, in accordance to this approach, covers economic planning, rising of funds, allocation of funds, economic manage etc. The new approach is an analytical way of dealing with monetary issues of a firm.

Before implementation of a budget/financial plan it is important that all individuals of the group who are impacted the diagram are worried in its formation and implementation. The steps taken to disseminate the records are conducting meetings, emails, suggestion box, conducting presentation. The methods I would use to speak and acquire agreements on the important points of the format by way of conducting meetings, asking for views of staffs, emails, cell phone conversation. Each manager is accountable for accomplishing the revenue budgets agreed to in the budget committee. Manger is accountable to approve, by signing the necessary paperwork, all charges that fail within their vicinity of responsibility. Expenditure ought to be inside the budget guidelines for the man or woman departments.

The support methods or organisational process that members are able to perform the financial management roles they are allocated are described below.

1. Share the Organizational Vision with Each Member

If everyone is aware of the collective vision, which will lead to prosperity and success of every team member, motivation and enthusiasm emerge as the indivisible components of all activities. Make positive that you continually listen the interest of your workforce on the glory of accomplishing that powerful vision. two

2. Communicate with Staff

You can’t study about ideas, attitude or worries of your crew participants without constant communication. Use every possibility to interact with them and you will find out thousands of new approaches of organizing your activities extra successfully.

3. Make People Feel Appreciated

One of the best desires of every man or woman is the need of being appreciated. Very frequently appreciation is a larger reward than money. Show your honest gratitude for the unique contribution everyone makes to the organization successful.

4. Support New Ideas

Each group member will feel empowered by the probability to no longer solely implement day to day tasks, but as well as suggest new thoughts and make them a reality. Give human beings a chance to take initiative and you will be amazed by using their capability to create exquisite ideas. two

5. Give Challenging Tasks

People can’t develop if they are continuously doing what they have usually done. Let them boost new competencies through giving challenging tasks. At the same time make positive the duties are reachable and in the frames of the person’s interests.

Conclusion:

Kathmandu furniture is a manufacturer based in Glenorchy, Tasmania. The company produces furniture’s which are sold to relaters in the Australian market. According to company strategic plans, the company aims to achieve a net profit before tax of $1000,000. According to company strategic plans, the company aims to achieve a net profit before tax of $1000,000 and the major risk of this goal are poor sales due to economic downturn and increase in expenses such as wages. To control the unnecessary expense, and to eliminate loss of the company we need to prepare of budget plan which will helps to give proper direction to use the money in proper way to give benefit to company. The budgeting and finance policy is very important to the company and all the employees should support and encourage to perform their duty allocated by the manager properly and should follow their responsibility. Reporting requirements should prepare properly and all the important software applications such as windows, MYOB, Microsoft excel should use for actual result for significant variances.

Contingency plan is money set aside to cover unexpected costs during the construction process. This money is on reserve and not allocated to one area of the work, and simply “insurance” against other costs. As projects progress, sometimes light can be shed on opportunities for future prevention, or opportunities for improvements. The expected outcomes should implement.

Financial management approaches are the solution of the major areas relating to the financial operations of a firm, viz., investment, and financing and dividend decisions. The modern financial manager has to take financial decisions in the most rational way. So, finance functions, according to this approach, covers financial planning, rising of funds, allocation of funds, financial control etc.

ASSESSMENT TASK 2-WRITTEN REPORT

Introduction:

Kathmandu furniture is a company produces furniture’s which are sold to retailers in the Australian market. According to company strategic plans and its objective is to earn net profit before tax of $1000,000 but the market risk to get the goal are poor sales due to economic downturn and the expenses increases in wages. So, in order to control these risk and to get the aimed target of $1000,000 some strategies, plans and solutions should be implemented. The main strategies such as monitor and control finances, Review variances, Review and evaluate process should study very closely to support the company’s goal.

Monitor and Control Finances

After the implementation of a budget/financial plan it is essential that we monitor actual expenditure and control costs across the financial activities of the work team.

Properly manage accounting. We can hire a good bookkeeper or purchase DIY accounting software. It is crucial that you keep accurate track of our income and costs.

Review your costs. Keep track of all of our small business expenses. These can add up quickly, but reviewing them allows you to fine-tune where our money goes.

Make financial projections. Having clear financial projections is important. our main business plan will help us to anticipate and address possible future obstacles.

Don’t get slack on invoicing.

- Send out invoices as soon as possible after providing goods or services.

-Set payment terms of seven days to make sure that payments are not forgotten or lost in the process.

- Always follow up on sent invoices. we can make this easy by creating set templates for email or SMS follow-ups.

Reference invoice numbers and cross-reference these with payments.

Keep a separate business bank account. Mixing business money with our personal finances is a recipe for unexplained losses and tax-headaches. Keeping our business’s money separate will make gauging profitability easier and help us to keep proper track of our expenses.

Keep track of personal loans to business. Keep accurate records of what we loan to our business. When your business starts making money, we can easily pay back the director’s loan first before paying tax on the remaining profit.

Contingency planning is a process in which individuals within an organization or from different organizations work together to establish shared perspectives on potential crisis scenarios and likely humanitarian needs, agree upon common objectives, define how they would make decisions and carry them out in the event of a crisis.

The plan is a record of what has been envisaged and agreed upon at a particular moment. It is not an end in itself. The understandings and relationships developed during the contingency planning process are as important as the plan itself. But a written plan is also essential for preserving the thinking and decisions over time and over staff changes. The plan must be regularly reviewed, and be updated as needed, by those who would be responsible for taking action in the event of a crisis.

The contingency plan may be brief and general if the hazard appears to be distant or is ill‐defined. It should be in greater detail as a particular event or hazard becomes clear and imminent. It should then be adapted into and elaborated on in an operational plan when a crisis occurs and emergency action has to be taken. An actual crisis will rarely correspond exactly to a scenario adopted for contingency planning purposes.

A spreadsheet is an interactive computer application for organization, analysis and storage of data in tabular form. Spreadsheets developed as computerized analogy of paper accounting worksheets. The program operates on data entered in cells of a table.

Steps involved in using a spreadsheet as the tool to identify the variance and overruns are described below:

For example, cell A3 below contains the SUM function which calculates the sum of the range A1:A2.

Enter a Formula. ...

Tip: instead of typing A1 and A2, simply select cell A1 and cell A2. ...

4. Excel automatically recalculates the value of cell A3. ...

To edit a formula, click in the formula bar and change the formula.

6. Press Enter.

Review Variances

The contingency adjustments that I would need to implement in order to maintain the financial objectives to assist in our explanation are very important for the review variances. The purpose of a contingency plan is to allow an organization to return to its daily operations as quickly as possible after an unforeseen event. The contingency plan protects resources, minimizes customer inconvenience and identifies key staff, assigning specific responsibilities in the context of the recovery.

A contingency budget is money set aside to cover unexpected costs during the construction process. This money is on reserve and not allocated to one area of the work, and simply “insurance” against other costs.

To develop a scenario where there have been 3 areas of account variances (value less than originally planned) and 5 areas of account overruns (value over the original plan) are listed below:

5 areas of account overruns (values over the original plan) are discussed as below:

The 8 accounts that are under and over the planned values are listed below: 

To calculate the under and over variance difference and percentages of each variance are calculated by given formula 

= (Actual cost – Forecasted Cost)/ Forecasted Cost 

Contingency adjustment: 

The contingency adjustment that need to implement in order to maintain the financial objectives are explained in table 

Monitor process that undertaken to ensure the modification were sufficient or if further adjustment modifications may be necessary in order to achieve the financial objectives of the original budget/financial plan are described below:

-Determine how every situation, such as hearth or flood, would have an effect on these key areas; what actions would be taken; and the resources wished for everyone. two

-Set desires for the return to critical operations and return to full everyday operations. two

-Identify every required manner and record every step in the process, what wants -to be done, along with the personnel and other resources needed to entire the work.

-Develop plans for each purposeful region and the agency as a complete and then check and refine the plans on a regular basis. two

-Finally, enforce a communications and education design to hold personnel informed of adjustments and remind them of their roles and responsibilities.

The organisational procedures and protocols to report on the team’s budget/financial plan variances, are all the employees and the management should follow their responsibilities according to their post and role. Everyone should follow the rules, policies and protocols strictly.

Review and Evaluate Process

Financial Management Process

The financial management processes that are used to monitor the effectiveness and reliability of financial activities of the team are given below:

I) Collect and for analysis, data and information on the effectiveness of financial management process while working as a team.

II) Analyse data and regulate information of financial management process while working as a team and emphasis the document and suggest the information which helps to improve the working process.

III) Monitor and implementing the improvements in the financial activities of business or an organisation.

The list of documents that I would use to collect and collate data and information

1) Income statements and sales record: We can find all the records of income, profit, revenue, loss and sales record which helps us to analyse the business is in track or not.

2) Balance sheet: Balance sheet helps us to identify any errors during financial process and can do correction of it.

3) Bank reconciliation: Bank reconciliation helps to detect errors and mistakes in account transactions of business.

4) Inventory record: Inventory record is useful to check the inventories and if anything should be ordered then the goods are ordered from suppliers. So, it helps to keep up to date of all essential goods and materials.

Approach use to analyse data and information.

The approach I would like to use to analyse the data and information gathered I.e. spreadsheet, tables, diagrams etc. In order to identify financial process improvement opportunities.

Example- 

 Formula = (Net Profit after Tax/Sales) * 100  

The areas of financial management process

The areas of the financial management process that may be improved and your recommendations for process improvements to ensure the effectiveness, efficiency and reliability of the financial management process are discussed below:

Step-1: The meeting will conduct and organise by the CFO and all the finance team should participate it that meeting.

Step-2: All changes in reports of finance will be discussing in meeting and important steps will. be taken after all information is shared to CFO and other team member then CFO will take decision of what to change and what need to do which is recorded by the responsible person for the role.

Step-3: After the meeting is finished then the things which is decided or finalised by CFO will regulate through the organisation and will run properly.

Organisational process required to implement and monitor the agreed improvements

The organisational processes required to implement and monitor the agreed improvements which is conducted by an Australian government which is approved by third party and audit on behalf of ATO.

Improved financial management

The improved financial management process is more aligned with the financial objectives of the work team and organisation by gathering and implementing all the information from own employees. The feedbacks and suggestion plays vital role to improve the technical and organizational aim.

Conclusion

From overall idea it is clearly understand that monitor and control finance, Review Variance and Review and evaluate process are very essential for the development and progress of any company. All the failure elegance should do correction and should record properly for the future reference which is very important. It helps to give the overall view of company status and current condition which helps to detect an error and loss.

REFERENCE

lf.com.au. (2019). The Importance of Budgeting in Business | WLF Accounting & Advisory. [online] Available at: https://wlf.com.au/importance-budgeting-business/ [Accessed 31 Jul. 2019].

Smallbusiness.chron.com. (2019). Team Budget Examples. [online] Available at: https://smallbusiness.chron.com/team-budget-examples-25628.html [Accessed 31 Jul. 2019].

Roberthalf.com.au. (2019). CFO job description and duties | Robert Half. [online] Available at: https://www.roberthalf.com.au/our-services/finance-accounting/cfo-jobs [Accessed 31 Jul. 2019].

En.m.wikipedia.org. (2019). Contingency plan. [online] Available at: https://en.m.wikipedia.org/wiki/Contingency_plan [Accessed 31 Jul. 2019]

Camp, A. (2019). 17 tips to manage your small business finances | finder.com. Retrieved 2 August 2019, from https://www.finder.com/small-business-finance-tips

(2019). Retrieved 2 August 2019, from http://www.monitor2.org/downloads/MONITORII_WP5_Methodology_Contingency_Planning_PP11.pdf

steps involved using a spreadsheet as the tool - Google Search. (2019). Retrieved 2 August 2019, fromhttps://www.google.com/search?

ASSMENT TASK 3: WRITTEN QUESTIONS AND ANSWER

1) What is budget?

ANS: Budget is a financial plan for any project and business. It includes sales, revenue, expenses, assets, liabilities and cash flow. Budget is very important to start and to run the business in a planned manner.

2) What benefits can a budget provide?

ANS: The benefits a budget can provide are by helping us to ignore spending on unnecessary fees, services. IT helps to make easier to meet the aimed budget goal. It helps to track of our spending and can control the unnecessary expenses, less money stress, save money.

3)What is contingency plan?

ANS: A contingency plan is a subject of action planned to aid an organization to response effectively to upcoming event that may or may not happen. It can be used as alternative plan or we can say plan B which can play a important role as a backup plan.

4) When developing cost control measures what do business need to ensure?

ANS: When developing cost control measures a business need to ensure about following things:

I) Hire the right people: All steps should take very carefully as it is important to control cost and minimize the un necessary expenses. One of the important way to control cost is to hire the right people for business who can take a good care and responsibility.

II) Negotiate annual contracts: By negotiating annual contracts it helps to minimize the cost of goods as well as for long term control measure.

III) Build strong relationship with suppliers: Another way of cost control is building strong relationship with suppliers. By paying in time will make a good impression towards the suppliers which can helps to negotiate the cost of goods.

IV) Using cloud computing as a cost control: Technology has become advanced can be just productive as ever. By using cloud computing many ways of cost controlling can be used which helps to reduce cost overhead.

5) How can business ensure a streamlined feedback system?

ANS: A business can ensure a streamlined feedback system by following these tips:

I) KEEPING CUSTOMERS HAPPY: A business cannot be successful without customers so they should be happy then everyone can be happy and the business will also be successful. By making customers happy with the services provided can helps the business to get the successful place.

II) TRAINING: Should pinpoint our company’s training by hiring or a company which offers customs training. By giving training from a person who had trained thousands of employees who performed leadership training.

III) STREAMLINING: By hiring an outside consulting company it will be best way to discover the process and procedures which are used for business and which ones we should shred. Should consult with employees about the reason of slow down the productivity and the process work well in the working environment.

6) What does financial management deal with?

ANS: Financial management deal with the financial health of an organization. They are engage in producing financial reports, direct investment activities, and develop strategies and plans for the long term financial objectives of their organization.

7)What are the key financial documents that should be created early in the budget cycle?

Key financial documents that should be created early in the budget cycle are

I) PREPARE YOUR BUDGET: The first step of budget process is to design it. This process starts with the thought at the ground level. According to the needed and its initiatives it should be designed and should started.

II)GET YOUR BUDGET APPROVED: For a successful business the political budgeting process is a bit shattered and it comes under the principle. Budget should not depend in yes or no content. However, it is the context of discussion.

III) EXECUTE YOUR BUDGET: After a budget is approved a time comes to implement it. Likewise, the federal government, business owners can’t be appropriate funds to control unnecessary expenses. But we can adjust the business strategies to control in expenses or minimize the targeted revenues.

IV) EVALUATE YOUR BUDGET REGULARLY: Budget plan should reassess time to time for the best of business future. Changes in revenue, control in cost and new information about our customer base are the best examples of things that may needed in budget requirement.

8) What are the key process to effectively manage approved budgets include?

ANS: The key process to effectively manage approved budget include are

-Analysis from past trend

-Actual sale order/targeted sale order

-Market research

-Economic condition

9) What does effective monitoring of budget performance require?

ANS: Effective monitoring of budget performance require a plan for our money, it ensures that we will always have enough money for the things we need for the budgeting plan, and which things are important to us. By following a budget plan will keep us out of dept., loss and it helps us to overcome from debt.

10) What can the main ratio groups be classified as?

ANS: The main ratio groups can be classified as liquidity ratio demonstrate a company’s ability to pay its current responsibility. It can be related to the provided cash and other assets to control accounts payable, short-term debt, and other liabilities. The measurements can be found in one of the company’s financial statements such as balance sheet, income statements, cash flow statement, and statement of changes in owner’s equity. Financial ratio plays vital role in business owners and managers with valuable means with which its progress can be determined and helps to increase in revenue and control debts, loss of the company.

11) Who is usually in control of budget compliance?

ANS: Chief Financial Officer(CFO) is usually in control of budget compliance.

12) Describe accounting principles?

ANS: Accounting principles are the rules and law that companies must follow while reporting financial data. Accounting principles are different in all countries. As accounting principles are different across the world, investors should be careful while comparing companies from different countries. The problem of differing accounting principles should focus while doing business and should concern the rules and regulation of accounting principle where we are about to deal with our business. The important principles of accounting are:

-REVENUE PRINCIPLE: The principle defines a point in time when bookkeepers may record a transaction as revenue on the books. The revenue principle states that the revenue for the business is earned and recorded at the point of sale.

-THE EXPENSES PRINCIPLES: The principle defines a point in time at which the bookkeeper may log a transaction as an expense in the books. The expense principle, or expenses recognition principle, defines that an expense comes at the time which the business accepts goods and services from another entity.

-THE MATCHING PRINCIPLES: The matching principle defines that we should match each item of revenue with an item of expense. We should match the expense of taco ingredients with the revenue earned from the sale of the taco.

-THE COST PRINCIPLE: The cost principle state that we should use the historical cost of an item in the books, but should not include the resell cost. For example, if our business owns property such as vehicles that should be listed as historical cost of the property, not the current fair market value of the property.

-THE OBJECTIVE PRINCIPLE: The objective principle states that we should use only factual, verifiable data in the books, never a subjective measurement of values. The subjective data are better that the verifiable data, the verifiable data should always be used.

13) Identify and explain the relevant legislation and current requirements of the Australian taxation office, including the goods and services tax(GST)

ANS: The relevant legislation and current requirements f the Australian taxation office, including goods and services are to make the 2019 GST regulations more consistent with modern requirements for drafting legislation, some have been renumbered along with their associated tables and item numbers. These changes don’t affect the meaning or operation of the regulations. GST rate is 10%.

14) Explain they key requirements for financial record keeping and auditing?

Ans: The key requirements for financial record keeping and auditing are explained below:

To keep the records for a minimum of five years

-Accurate and accessible accounting records that explain the transactions and financial position of our SMSF.

-An annual operating statement and an annual statement of our SMSF’S financial position.

-Copies required to lodge of all SMSF annual return lodged

-Copies of transfer balance account reports lodged

-Copied of any other statements we are required to lodge with us or provide to other super funds.

We need to keep the following records for a minimum of 10 years:

-Minutes of trustee meetings and decisions.

-Records of all charges of trustee

-Trustee declarations recognition the obligations and responsibilities for any trustee, or director of a corporate trustee, appointed after 30 June 2007

-Member’s written consent to be appointed as trustees

-Copies of all reports given to members

-Documented decisions about storage of collectables and personal use assets.

15) Describe the principles and techniques involved in managing:

I)Budgeting

II)Cash flows

III)Electronic spreadsheets

IV)GST

V)Ledgers and financial statements

VI)Profit and loss statements

Ans: The principles and techniques involved in managing

Budgeting

1) Responsible fiscal management. Minnesota’s financial standing (including the state’s bond ratings) depends on adequate reserve.

2)Clear lines of accountability.

3) Flexibility to respond to short-term challenges and plan for a long-term vision.

4) Good financial information.

5) Stability in the decision-making process.

Cash flows

1) Manage a cash flow budget:

In order to manage our cash, it’s important to have a really clear handle on how much we’ve got. Start by setting up a cash flow statement and make sure we put the time into keeping it up to date. We can use our statements as the foundation for a cash flow forecast that will allow we to look six to 12 months into the future and predict our cash position the.

2) Manage a cash reserve:

If we operate our business with a cash balance of zero, then we are going to find it doesn’t take much to cause a crisis. A much better plan is to build a buffer into our bank balance that will prepare us in case of unexpected challenges.

3) Be realistic with our sale volume estimates:

t’s important to be optimistic in business but not when you are predicting your revenue. When you gather your numbers together to create your cash flow forecast, make sure you are realistic with your sales figures. Being realistic is important because false optimism could hide a cash flow problem that’s just around the corner. It’s better to err on the side of caution and be prepared for any challenges that lie ahead.

4) Focus on our invoices:

Focus on our customers don’t pay their bills on time it can really hurt your business, so it’s important to keep a close watch on our invoice processes. Create a clear framework around the issuing and management of invoices so both us and our customers know what to expect.

5) Keep a tight rein on our spending especially through start up:

Every dollar you spend comes directly from your bottom line, so it’s important to hold onto your cash reserves and avoid adding cost into your business. The easiest way to manage spending is to create a detailed budget and stick to it.

Electronic spreadsheets:

1) Determine what role spreadsheets play in your business, and plan your spreadsheet standards and processes accordingly.

It is fundamental to consider what part spreadsheets play and how they are used. You need to consider how to create, implement, and communicate a plan of best practice. If you only use spreadsheets sparingly, then the Twenty Principles themselves are enough of a standard. But in a spreadsheet-heavy environment like a financial modelling organization, then a more formal modelling standard might be more appropriate.

2. Adopt a standard for your organisation and stick to it.

This is one of the fundamental ideas that drives the Twenty Principles. Good standardisation is useless if it isn’t considered in the context of your organisation and what makes sense for what you’re trying to achieve with spreadsheets. The standard should include, among other things, consistent conventions on use of cell formatting.

3) Ensure that everyone involved in the creation or use of spreadsheets has an appropriate level of knowledge and competence.

Spreadsheets, no matter how well designed, are only as good as their users. For anyone designing, developing or maintaining (as distinct from just using) a spreadsheet, this will include: awareness of the range of functions available, clear understanding of such basic concepts as relative and absolute cell references, and an appreciation of the importance of carefully checking the results of functions.

IV) GST

Destination Principle' states that the supply of goods and services would be taxed at the point of consumption. This means that GST replaces source based tax system with destination based tax regime.

V) Ledgers and financial statements

The general ledger documents all of the organization’s transactions over the course of a year for all accounts. Every time a check is written, the transaction reduces cash and increases an expense account. Every time a check is deposited and recorded, cash is increased and revenue is increased.

-Statement of financial position accounts

Asses accounts

Liability accounts

Net asset accounts

-statement of activities accounts

Revenues and gains

Expenses and losses

Vi) Profit and loss statements

The purpose of the income statement is to provide the financial earnings performance of the entity over a specific period of time. It is also referred to as a profit and loss statement or earnings statement.

The format of the income statement components allows for dissecting the revenues, expenses, operating income, and profits of an entity. The income statement is one of three critical company financial statements for investor analysis.

REFERENCE

Shiffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 502. ISBN 0-13-063085-3.

AUGUST 27, 2018 BY ASHLEY PATRICK

MARGARET ROUSE (16 APRIL 2013)

Robert (2019) Half International Inc. An Equal Opportunity Employer M/F/Disability/Veterans.

(https://www.roberthalf.com/blog/management-tips/4-cost-control-measures-you-cant-live-without)

Cirrus Insight on Sep 22, 2015

(https://www.cirrusinsight.com/blog/10-ways-to-streamline-your-businesss-best-practices)

College Grad LLC (2019)

(https://collegegrad.com/careers/financial-managers)

Steve Lander; Reviewed by LD Withier, MBA; Updated January 25, 2019

(https://smallbusiness.chron.com/4-phases-budget-cycle-71723.html)

Muhammad Tullah Rashid ACCA, UAECA, Senior Accountant, Kampar International General Trading LLC / Dubai Crystal Mineral Water & Ref Co (2016)

(https://specialties.bayt.com/en/specialties/q/258083/what-are-the-most-important-factors-to-consider-in-budget-development/)

Clark, Scott. "Financial Ratios Hold the Key to Smart Business." Birmingham Business Journal. 11 February 2000.

(https://www.inc.com/encyclopedia/financial-ratios.html)

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