BSBFIM601 Manage Finances: ASSESSMENT 1 - Written Questions

BSBFIM601 Manage finances
ASSESSMENT 1 – Written Questions
QUESTIONS
1. Briefly explain the five main taxation and superannuation obligations of an Australian
company, including taxes that are paid through the Australian Tax Office and those paid to the
state or territory.
1. Property Tax (GST)
 10% general tax on most goods or services sold or used or imported into Australia.
 Companies are required to collect GST from their customers on GST-based products
 Businesses are required to report their GST collected and used and to report to ATO
2. Pay As You Go (PAYG)
 The system will deduct income tax and payments from employees and send that money to the
ATO.
3. Fruit Tax (FBT)
 Tax payable on certain benefits provided to employers by employees or their partners in lieu of
a portion of their salary or salary.
 This may include voluntary agreements between employers and employees known as wage
agreements.
 Additional taxes are required to be paid on items that may be reasonable at the employer's
expense.
4. 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.
5. 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)
2. Answer the following questions relating to GST in Australia:

a) When does a business/enterprise and non-profit organisations 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.
b) When do you need a tax invoice to claim a GST credit?

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 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:-
 That the record should be a tax statement.
 Identity of the retailer.
 Australian Business Number of Retailer (ABN).
 Duration of issuance of the statement. (Farvacque et. At., 2014)
 A brief description of the products sold, including the amount and price (if applicable).
 The GST quantity payable can be set out individually..
 To what extent each invoice sale is a taxable sale (i.e. to what extent each sale contains GST)
 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?
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. Not everyone is entitled to an ABN. Provide a list of the conditions that must be met to be
entitled to an ABN
You are entitled to ABN if:
 doing or starting a business in Australia
 Doing things related to Australia's indirect tax area
 Corporate Company.
4. To work as a business and be entitled to an ABN, what activities should you be undertaking
according to the Australian Taxation Office?
 Provide products and services directly to your customers, whether public or other businesses
 Find your customers, for example by advertising your products and services
 citation and invoice for work, including quoting or negotiating prices
 have a separate bank account for insurance and your business insurance such as public loans
and WorkCover
 enter and report all business income, even if the business income is below the tax-free limit.

5. According to the ATO website, what obligations are you likely to have if you have an ABN?
 Tax registration of goods and services
 Send work statements to us
 Sign up for PAYG hosting and meet your best obligations to qualified staff
 among other legal obligations of the state, states and territories such as employment tax,
employee compensation, and employment documents
6. Outline the key requirements around tax for companies in Australia including:
a) how annual tax is reported
Taxes are reported on annual company tax refunds
b) the methods by which it can be paid

Taxes are usually paid as you travel through the tax system
c) the name and value of the two tax rates for Australian companies and when each applies
There are two taxes - 30% corporate tax and corporate tax, currently 27.5%. The company's tax rate
applies to low-cost companies, with a combined profit of less than $ 50million. The corporate tax rate
applies to all other businesses.
d) The small business tax rates for FY (Financial Year) 2019, FY 2020, FY 2021 and FY 2022
Tax rates are:
 2019 - 27.5%
 2020 - 27.5%
 2021 - 26%
 2022 - 25%
7. Answer the following questions relating to Pay-as-you-go (PAYG) in Australia:

a) Explain the difference between PAYG withholding and PAYG Income Tax Instalments.
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 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.
8. 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:
 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.
9. Explain the principle of accrual accounting. Include two advantages and two disadvantages
of accrual 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)
Benefits:
 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:
 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.
10. Describe the following terms:

a) Financial accounting
Accounting is primarily a way of reporting the results and financial position of an entity. It does not take
much to provide details about the operation of the business. The primary function of financial accounts is to
satisfy the information needs of people who are not involved in the operation of the business. They provide
historical details.
b) Management accounting

Financial Management - Managers are responsible for planning and managing business resources and
making long-term and day-to-day business management decisions. Managers need detailed information
and need to plan for the future e.g. budgets, which predict future income and expenditure. Sometimes
known as cost calculation, a management information system analyzes data to provide information as a
basis for administrative action. The concern of the management accountant to present the accounting
details in a way that greatly helps the management.
c) Accounting standards
Financial statements - Financial statements are authoritative statements about how certain types of
transactions and other events should be disclosed in the financial statements. Accounting Standards are
part of the General Accounting Guidelines (GAAP) which set the accounting rules that companies must
comply with. They are designed to provide detailed calculation guidelines.
d) Financial accounting system

A system of accounting, data, records and procedures used by an entity to prepare, provide and report
financial information to its stakeholders. In order to produce financial statements, an entity must keep a
record of all transactions, assets and liabilities. When it comes time to prepare financial statements, the
relevant details are taken from those records.
11. Explain what is meant by audited financial statements?

An audited financial statement means that a certified auditor has reviewed the company's financial
statements and has confirmed that they are accurate and accurate and are an accurate indicator of the
company's financial position.
12. Explain what a financial audit is, the purpose of a financial audit and what the purpose of an
auditor’s report is.
An audit is a time when an audited auditor will review any financial statements or financial statements from
the organization.
 The auditor's report is an important tool for reporting user information.
 It is an independent concept provided by an independent external auditor as a result of audited
audits, reviews or business processes.
 The auditor's report is intended to provide feedback to users as to whether the financial
reporting framework has been used in the preparation of the report, whether it has been
improperly used and whether it reflects a fair and accurate view of performance results,
financial position and cash flows.
 The preparation and presentation of financial reports, and the content of those reports, is
ultimately the responsibility of those in charge of business management (for example, directors
of companies).
13. Explain the concept of financial probity. In your response, list at least six 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 honesty. (Joshi et. Al.,
2013). The standards of fidelity and morals are trustworthiness and respectability, straightforwardness,
pertinence, moral conduct, great aim, and esteem creation.
Principles that set out ethics and probity:
 Authorities must conduct themselves with integrity

 Authorities should not abuse their position.
 Authorities must refrain from taking risks.
 S authorities should not accept admissions, gifts or benefits
 Agencies should not seek to benefit from dishonest, illegal or unsafe merchant actions.
 Conflicts of interest should be handled fairly.
 The choice and conflict of interest requirements must be applied in a fair and equitable manner
provided by the risk management principles.
 Information Confidential information must be handled properly.
14. Provide four examples of what would be considered fraudulent behaviour 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.
15. Discuss the difference between Generally Accepted Accounting Principles (GAAP) and the
International Accounting Standards and why there was a need for harmonisation.
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.

ASSESSMENT 2 – Financial analysis and budgeting
PART A: ANALYSE FINANCES
Grow Management Consultants is a consultancy business specialising in leadership consultancy and has
been operational for the last five years. The company offers a range of services to assist companies to
assess leadership behaviour of existing managers and performance metrics and to design and implement
customised leadership programs based on the assessment. Services are offered Australia-wide.
The company employs a General Manager (you), 2 Principal Consultants (who are also Directors), 1 Senior
Consultant, an Administration Officer and Receptionist.
Over the last two years, the company has diversified and offers regular professional development workshops
on all aspects of leading and managing staff. These workshops are conducted approximately every 3 months
in major cities including Sydney, Brisbane and Melbourne. In 2017 – 2018, the company ran a total of 36
workshops. The company has also recently produced an E-book about leadership techniques.
The intention is to replace the workshops with the annual conference in the next financial year as the
workshops were not well attended and client feedback indicates a personalised, company focused approach

in the form of consulting services is the service of choice.
The E-book has had reasonable sales but there needs to be a wider selection of books, as well as more
marketing. The plan is to generate $10,000 worth of sales for the e-books during the next financial year and
increasing over time.
As the General Manager for the company and with responsibility for finances, you are currently completing
the financial planning for the year ahead. This involves a review of the company’s business plan, previous
year’s profit and loss statement, the current business plan and strategic directions and cash flow statements.
Based on the review, you will be establishing budgets and allocating funds. In developing the budget, you
are to assume a 5% increase in cost of sales, as well as a 10% increase in sales for consulting services and
executive search.
As per the business plan, the company plans to run an annual conference starting in 2019. The costs for the
conference have been estimated by the Principal Consultant as set out in the Estimated Conference Costs
document. Conference attendance is aimed at 100 people paying $750 each. (You will be provided with a
copy of this document for the purpose of this assessment).
The Principal Consultant has also asked you to review the current accounting software used by the
business. The company is currently using MYOB but as it has grown, the Principal Consultant wishes to
review whether this is the best accounting software for the business. He has also requested that the software
have a cloud feature.
Complete the following activities:

1. Conduct research in preparation for your financial performance report. Review the provided business
plan and financial statements for Grow Management Consultants.
a) Review the scenario information above and the 2017 – 2018 Profit and Loss Statements and the
2017 -2018 Statement of Cash Flow which will be provided to you. Using this information, identify
areas of the business that have generated a profit and those that have generated a loss.
b) Conduct research to establish why those areas have made a profit or loss. Your research should
include a review of the financial data provided to you, economic conditions and business trends
(which you can research on the internet) that may have resulted in the profit or loss. You will be
required to report on your findings in the financial performance report as outlined below.
c) Conduct research on accounting software systems as per the scenario information. Make notes for
use in your report.
2. In the business plan, you will note that one of the objectives in 2019 is to review the current accounting
software system and ensure it meets the business’ goals and needs. Your manager has asked you to
compare the current system used with at least two other accounting software systems and make a
recommendation about whether the current system still meets business needs, or whether there is a
case for change. The rationale for reviewing the system are outlined in the business plan. Conduct
research into the current accounting software system and at least two others that the business could
consider, identifying pros, cons and costs of each. Fill in the template called Accounting Software
System Comparison.
3. Prepare a Financial Performance Report for the Principal Consultants using the template provided by
your assessor that includes an:
a) Overview of the purpose of the report.
b) Analysis of the previous year’s (2017 – 2018) profit and loss statement for Grow Management
Consultants, including revenue generated, cost of sales, gross profit/loss margin and net profit/loss
margin and the areas of highest cost for the business.
c) Analysis of overall business performance including the performance of each of the income streams
for 2017 – 2018 as proportionate to others.
d) Outline of reasons for profit or loss based on your analysis of the data and research on economic
conditions and business trends.

e) Summary of the organisation’s goals and priorities for the upcoming financial year as documented
in the Strategic Business Plan and make some recommendations about the financial resources
required to achieve these goals, as well as key dates.
f) An analysis of cash flow trends as per the cash flow statement.
g) The outcomes of your research in relation to the accounting software system and making your
recommendation, providing a rationale for your recommendations.
h) A summary of statutory requirements for compliance and tax:
i. GST reporting requirements (the company is required to report quarterly)
ii. PAYG withholding obligations
iii. PAYG income tax instalment
iv. Payroll tax obligations (state government)
v. Superannuation entitlements and employer obligations regarding frequency of payment,
choice of fund and reporting to staff.
i) Summarise any current tax or super liabilities based on the financial statements (Statement of
Cash Flows and Profit and Loss Statement).
j) An outline of the due diligence checks you completed in preparing your analysis.
k) Analysis of the Ageing Debtor Summaries your Assessor will provide you with and any
recommendations for better managing ageing debtors on an ongoing basis.
Submission Items
 Completed Financial Performance Report
 Completed Accounting System Comparison Form
Financial Performance Report

Introduction
The purpose of the financial report is to analyses the profit and loss for Grow management
consultant, including the revenue generated, cost of sales, gross profit/loss margin and net/loss
margin and also analysis of overall business performance.
2016-2017 performance
The net sales for Grow management consulting FY2106-2017 is $1,335,600 with a total expense
of $683,523 therefore, the net profit for Grow management consulting FY2016-2017 is
$652,077. From the income stream we could see that the main source of income is mainly from
the consulting fees which is a profit of $1,175,600 secondly follow by executive search service
$120,000 then workshops $38000 and the least profit would be from publications $2,000.
Table 1: The income source categories of Grow management consulting according to their
budgeted, actual and the variation of the total income forecasted for FY 2017-2018.
Income Budget Actual Variation
Consulting fees $1,210,000 $1,410,720 $200,720
Conference $75,000 $45,000 -$30,000
E-book $10,000 $15,000 $5,000
Executive search $144,000 $144,000 $0

Strategic Goals And Priorities
The goal is to generate $10,000 worth of sales for the E-book during the next financial year and
increasing over time. As per the business plan, the company plans to run an annual conference
starting 2018.
Cash Flow Statement Analysis
From the cash flow statement, we can see that the highest net income sales were on June 2017
which resulted the highest surplus for the financial year. During September 2016, the surplus
was the lowest out of the 12 months due to high expense with addition of accounting fees which
caused the low surplus during that month. The total expense for FY 2016-2017 has over budget
by $42,435.
Financial Software
Wiise is clever business software. It helps SMBs get clarity over their business, so they can see
the complete picture and make decisions with certainty. Wiise helps SMBs graduate from an
accounting software to clever business software designed to handle the complexity of their
growing business. Wiise brings your systems together in one place to give you a complete
picture of your business finances by integrating banking, invoicing and payments.
GnuCash is simple enough to be used for home finances, but flexible enough to be put to use by
small businesses as well. While the software is easy to use, the fact that it's suitable for small
business accounting is thanks to the inclusion of a number of extra features that you would not
necessarily expect to find – support for payroll management and double-entry accounting, for
instance.
HomeBank will appeal if you work on multiple platforms, or don't use Windows by default.
Available for Windows, macOS and Linux (there's also an Android app in development)
HomeBank can be installed normally or as a portable app, and it makes the topic of personal
finance easily accessible. If you've been using another program – such as Quicken or Microsoft
Money – to manage your finances, you can import data to save having to start from scratch.
Advantages of MYOB:
 Anytime, Anywhere Access
Cloud accounting gives employees the ability to work on organisational content from
anywhere, using any device. This eliminates productivity roadblocks when traveling, while
onsite with a client or at home.
In a study of 1000 companies, MYOB found the most popular reasons for adopting cloud
computing were being able to access data from any location (42%), followed by remote
working capability (28%).
Tim Reed, CEO of MYOB, says “Cloud usage can provide a serious competitive advantage.
Increasingly, businesses have teams on the road, in the office and working at home. The power
of the cloud provides the freedom to work anywhere at any time, to be with your customers,
partners and suppliers while still enjoying a connection to the office.”
Anytime, anywhere access can extend a workforce’s productivity remarkably, reducing

employee stress and strengthening an organisation.
 Greater Speed Of Input
Manual accounting systems can be painfully slow. MYOB automates many manual accounting
processes that waste valuable time and money.
Oftentimes, manual accounting systems require multiple entries of the same information.
MYOB syncs information and reduces time-consuming processes by automating credit notes,
purchase orders, payroll and more.
In addition, business analysis becomes painless. Reports – including Statement of Cash flows,
Profit and Loss statements and more – are seamlessly produced to assist with managing,
monitoring and controlling the business. Instead of waiting for different teams to collect and
collate information, users generate extensive reports with a few clicks of the mouse.
This allows organisations to predict events like cash flow problems or periods of growth,
helping them plan for the future with confidence.
 Greater Accuracy
Accurate data is essential for effective financial management. Organisations relying on manual
accounting systems are burdened by the possibility of human error and the likelihood of
working off outdated information.
MYOB automates these manual processes, reducing the room for human error. Furthermore,
there are built in controls designed to detect and remove duplicate entries and redundancy
errors.
Additionally, MYOB ensures content updates occur in real time, so employees are always
working with the latest information. For example, updated accounting records are instantly
reflected in account balances in customer accounts.
This enables accurate representations of the organisations financial position at all times, helping
to achieve genuine financial stability and security.
 Reduced Costs
Hardware, operating systems and accounting fees can quickly exhaust a solid budget. MYOB’s
cloud offering reduces financial and operational expenditure.
When organisations use MYOB’s, cloud offering, instead of needing upfront capital,
organisations pay a monthly fee. This eliminates the ongoing costs of maintenance, updates,
and backups. Additionally, server failures, hardware upgrades and other technical issues
are no longer the company’s problem. According to CCH, 32% of Australian SMEs turn to
cloud computing to avoid paying for infrastructure.
Cloud Accounting Australia found businesses reviewed could save up $125 billion a year if
they shifted to cloud computing. Michael Kuster, CEO of Cloud Accounting Australia, says
“Cloud software is an opportunity for small and medium businesses to use state-of-the-art
technology with very low operating costs. Over the next few years, we expect to see a range of
businesses reducing their operating costs by moving their bookkeeping, accounts and financial
reporting online."
MYOB provides enterprise-grade tools to not only reduce expenditure on assets, but also
operational costs, giving organisations the opportunity to enhance their productivity.
Disadvantages of MYOB:
A major concern for cloud accounting systems like MYOB is data security, with 46% of
Software Advice’s survey respondents stating security is the top concern. This is because online
content may be vulnerable to hackers, fraud and other threats. However, MYOB invests heavily
in security architecture and design and in implementing industry best practises. Not many
organisations can afford this level of security, including secure user access controls and
approval processes.
MYOB is not novice-friendly. An organisation’s workforce must be trained on the software to
avoid employees continuing with inefficient manual processes. Many companies aren’t taking
advantage of cloud automation, as they’ve gotten used to the limitations of the old solution.
Therefore, it’s critical to arrange for staff training. MYOB offers free webinars for MYOB
Essentials users.
Report 2
Analysis of the previous year’s ( 2016-2017) profit and loss statement
Overall there was a good performance of income streams but an incurred loss.
 The net profit was $797,125 and the expenses were $817,595.
 The Gross profit/net sales was $1,614,720
 The income from workshops was $45,000 and it was projected $75,000 therefore, 40% of
income from workshops was loss.
 The income from publications $15,000 and it was budgeted only $10,000, therefore,
$5,000 profit earned.
There seems to be discrepancies between actual and budget for publications and workshops.
This could be due to the workshops not being well attended with clients preferring the
consulting services. Analysis shows that more e-books are required and better marketing is
required. However, the costs for the workshops and publication of the e-books were high. The
e-book was developed at a loss- this was due to the writer costs. The workshop costs were also
too high.
Strategic goals and priorities
To be well le, high performing, profitable and accountable
 Ensure that all financial operations, performance indicators and results support the
strategic policies
 Identify new and expand existing sources of revenue.
 Achieve profits of at least 10% per annum.
Dates: 2016-2017 financial year.
Develop services to meet customer needs and aspirations
 Increase range of services offered to include change management and diversity

 Plan for and establish an annual conference, starting in 2016.
 Increase range of e-books commencing with organizational change e-book to be published
during 2016.
Dates:2016-2017 financial year
Continue building deeper customer relationships
 Customer-centered practice, with a focus on meeting their total needs for a high-
quality services
 Strengthen the skills of our people, to better support customers
 Drive innovation to better meet customer demands
Dates: ongoing
Attract, engage and develop the best staff
 Continuing the drive to a customer centered, high performance workforce and culture
 Strengthening the skills of our people, to better support customer needs
 Empowering innovation and responsiveness to change
 Continuing to enhance the diversity of our workforce
 Employing additional consultants
Dates: 2016-2017 financial year
Cash flow statements analysis
Upon analysis of cash flow trends as per the cash flow statements it can be seen that there are nil
cash flow problems. The income from consulting and executive can be seen as strong and stable.
Financial software
The following is a review and analysis of three financial software that the business could use, including
the advantages and disadvantages of each. The software packages reviewed are xero, QuickBooks and
MYOB.
XERO
Package overview Xero is the market leader for online accounting
software in Australia. The company boasts
147,000 Australian customers as of September
2014. An increase of a whopping 96% from the
same time in 2013. Xero is a purely cloud-
based accounting platform that focuses on
eliminating inefficiencies in the accounting
process and enabling greater collaboration
between team members. Many manual
processes that require calculators, ledgers
and/or a great deal of effort are no longer
necessary. For example, xero automatically
pulls data from bank feeds, reconciling and
categorizing transactions in seconds
Costs Starter Plan: $25/month, limited team users,
transactions, invoices and bills
Standard plan: $50/month, includes up to five
team members and unlimited transactions,
invoices and bills
Benefits and Challenges Benefits:
Increased Efficiency: Xero reduces time
wasted on manual accounting because it allows
for access from any location and automates
time-consuming, manual activities.
Effective Collaboration: Organisations using
Xero can invite users to collaborate on real-
time financial data, reducing bottlenecks and
ensuring effective group effort.
Security: Cyber threats are intensifying with
each passing year, Xero helps organisations
strengthen their security measures, providing
enterprise-grade technology to protect them
from unauthorized access and system failures.
Challenges:
Limited stock control features
Potential security threats/unscheduled
downtime ( hackers)
Reliance upon the internet.
MYOB
Package overview MYOB has a powerful cloud accounting
saluting. The company boasts over 100,000
online customers with their cloud product
accounting for 70% of their business. Similar
to other cloud accounting solutions, MYOB’s
offering lets you automate manual tasks, but
does run slower than other solutions
Costs MYOB Essentials starts from $29/month (basic
and simple)
MYOB Account right starts from $43/month
(more features like stock tracking and billing)
Benefits and challenges Benefits:
Anytime, anywhere access: Cloud accounting
gives employees the ability to work on
organizational content from anywhere, using
any device. The eliminates productivity
roadblocks when traveling, while onsite with a
client or at home.
Reduced costs: Hardware, operating systems
and accounting fees can quickly exhaust a solid
budget. MYOB’s cloud offering reduces
financial and operational expenditure.
When organizations use MYOB’s cloud
offering, instead of needing upfront capital,
organisations pay a monthly fee. This
eliminates the ongoing costs of maintenance,
updates and backups. Additionally, server
failures, hardware upgrades and other technical
issues are no longer the company’s problem.
Challenges :
A major concern for cloud accounting systems
like MYOB is date security, with 46% of
Software Advice’s survey respondents stating
security is the top concern. This is because
online content may be vulnerable to hackers,
fraud and other threats. However, MYOB
invests heavily in security architecture and
design and in implementing industry best
practices. Not many organizations can afford
this level of security, including secure user
access controls and approval processes.
MYOB is not novice friendly. An
organisation’s workforce must be trained on
the software to avoid employees continuing
with inefficient manual processes.
QuickBooks
Package overview QuickBooks online is the cloud accounting
product developed by Intuit. Quickbooks
online has seen a lot of success in the United
States, but certainly doesn’t have the market
penetration like Xero or MYOB in Australia.
Costs Quickbooks online simple start product is
$15/month
Quickbooks online essentials product is
$25/month (manage bills, automate invoicing,
currency conversion)
Quickbooks online plus product is $35/month (
tract inventory, create budgets, compare
business performance)
Note: Quick books online frequently offers
special pricing-you should be able demand 15-
30% off regular pricing
Benefits and challenges Benefits:
Quickbooks online provides centralized access
to information, updated in real time.
Unsurprisingly, a survey by Quickbooks found
83% of Quickbooks online users called this
their favorite feature.
Automatic syncing occurs across desktops,
tablets and phones, propagating changes to data
throughout the system. For example, changing
the sales tax rate in one place updates all sales
records.
Quickbooks online also integrates well with
other programs like Microsoft Excel and
Acrobat Reader.
Security: QuickBooks online uses security
technologies most organizations couldn’t
afford on their own. This includes the same
data-encryption technology as leading banks,
firewall software, security personnel and
automatic backups. Also, the activity log below
shows all user and third-party activity,
including user log-ins, editing of accounts and
items, bank transactions downloads and more.
A team of technical experts monitors the
network in real time, ensuring organizational
content is completely protected from online
threats.
Challenges:
Quickbooks online carriers a history of
unscheduled outages. One of the worst
instances occurred in 2012 on the Friday before
the corporate tax deadline, resulting in angry
users without access to accounts the entire day.
Quickbooks online is designed for ease of use
over breadth of features. Therefore, it doesn’t
have all the accounting methodologies some
accountants require to perform certain
analyses. Other limitations include the number
of products an organization can offer.
Organizations looking for a more extensive
range of features can pay a one-time fee for the
desktop version.
PART B: DEVELOP A BUDGET
Now that you have analysed the previous year’s financial performance, your manager has now asked you
to develop a month-month budget for the upcoming financial year, using the template provided.
The budget you develop must be comprehensive and reflect business needs and goals for the upcoming
year. Your budget must use informed estimates of new items that need to be included based on the
business’ goals and your own research about how this will be achieved.
The Principal Consultant would like a new venue for the conference this year and would like you to
research local options for the new venue and find out prices of the venue, and then help prepare a bid for
the new venue. This must be allowed for you in your budget.
Your budget must be developed in accordance with the Financial Management Policy and Procedure
provided and developed in Excel. You must use the same income and expense accounts as per the
existing financial statements, unless the item is a new addition. Your budget must show all allocations for
payroll tax, income tax, and superannuation.
To prepare your budget, ensure you:
a) Use the information in the business plan to establish critical dates and new initiatives that the
organisation intends to implement in the upcoming year that will generate income. Ensure these are
reflected appropriately in your budget.
b) Ensure that your budget includes the estimated income and costs for the conference and e-book to be
implemented in 2019. This is provided to you as a separate document.
c) Consider any resources required to implement new initiatives and account for them in your budget.
d) Research new venues and find out the costs of the venues. You must provide options for two different
venues that can accommodate up to 120 people and can provide food and drinks and a place for
presenters to speak. Include an allowance in the budget for the venue hire. Fill in the Venue Summary
Form to show the outcomes of your research.
e) Ensure that the analysis of the previous year’s data and future plans as indicated in the business plan
are taken into account in determining projected income and expenditure.
f) Ensure your budget includes the revenue growth that the organisation intends to make and any cost
impacts this will have.
g) Include a list of assumptions you have used to develop your budget.
h) Assume a 5% increase in all general costs, as well as a 10% increase in income for consulting and
executive recruitment service. Input costs and income for the conference and e-book as per the data
provided in the conference document.
Submission Items
 Completed Budget for 2018 – 2019
 Completed Venue Summary Form

Grow Management Consultants Pty Ltd - Budget
July 18 to June 19
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total
INCOME (includes calculated 10% increase)
Consulting fees 110,000 110,000 110,000 110,000 110,000 110,000 110,000 110,000 110,000 110,000 110,000 110,000 1,320,000
Conference 52,500 $52,500
E-book 10,000 $10,000
Executive search 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 132,000
NET INCOME 121,000 121,000 183,500 121,000 121,000 121,000 121,000 121,000 121,000 121,000 121,000 121,000 $1,514,500
EXPENSES (includes calculated 5% increase)
Salaries/wages 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 529,200
Superannuation 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 63,000
Cleaning 840 840 840 840 840 840 840 840 840 840 840 840 10,080
Accounting fees 0 0 7,164 0 0 0 0 0 0 0 0 0 7,164
Advertising and marketing 440 440 440 440 440 440 440 440 440 440 440 440 5,280
Contract writer (e-book) 10,500 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 51,849
Computer software 800 800 800 800 800 800 800 800 800 800 800 800 9,600
Motor vehicle expenses 454 454 454 454 454 454 454 454 454 454 454 454 5,448
Utilities 1,032 1,032 1,032 1,032 4,128
Insurance 353 353 353 353 353 353 353 353 353 353 353 353 4,236

Office supplies 500 500 500 500 500 500 500 500 500 500 500 500 6,000
Lease/loan payments 132 132 132 132 132 132 132 132 132 132 132 132 1,584
Rent 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 45,108
Sundries 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Travel and Accommodation 472 472 472 472 472 472 472 472 472 472 472 472 5,664
Repairs & maintenance 630 630 1,260
Telephone 298 298 298 298 298 298 298 298 298 298 298 298 3,576
Conference venue and
catering 3,000 $3,000
Speaker fees and travel 10,000 $10,000
Marketing (conference only) 2500 2,500 $5,000
Conference bags 1,000 $1,000

Conference casual project
officer 5,000 5,000 5,000 5,000 5,000 5,000 $30,000
E-book writer 830 830 830 830 830 830 830 830 830 830 830 830 $9,960
Desktop publishing 3000 $3,000
Marketing (e-book) 1200 $1,200
TOTAL EXPENSES 83,460 70,487 88,151 69,649 67,987 67,987 64,019 62,987 62,987 64,649 62,987 62,987 $828,337
SURPLUS/ DEFICIT 37,540 50,513 95,349 51,351 53,013 53,013 56,981 58,013 58,013 56,351 58,013 58,013 $686,163

PART C: PREPARE TO IMPLEMENT THE BUDGET
The Principal Consultant has approved the budget for the upcoming financial year of 2019-2020.
You are now required to ensure the budget will be implemented correctly by:
 Ensuring managers and supervisors are clear about the budget, reporting requirements and their
responsibilities in relation to adhering to the budget
 Setting up systems to record financial transactions and ensure they are only approved if in accordance
with the budget
 Set up key reporting dates at which the budget will be monitored and reported on
 Set up a system for dealing with aged debtors and debt recovery
1. You must now prepare to implement the budget by developing any required systems and templates to
effectively implement and monitor the budget and ensure all team members are clear about their
responsibilities.
2. Make updates to the Financial Management Policies and Procedures to ensure:
a) Risks for misappropriation of funds are managed
b) Procedures around the management and monitoring of the budget, including responsibilities, are
included.
c) Expenses are monitored in order to approve expenses and purchase orders so that budgets are
not exceeded
d) Financial transactions are tracked against consistent income and expense accounts in line with the
budget.
e) They include a policy and procedure for dealing with aged debtors and debt recovery.
3. Develop a proforma template that can be used for expenses and purchase orders to be approved,
showing that the approver has checked the budget before approving.
4. Develop a proforma template that can be used by anyone submitting an expense claim or invoice for
the conference or e-book where a staff member can select the relevant income or expense account.
Submission Items
 Updated Financial Management Policies and Procedures
 The proformas you have created to implement the new procedures and systems

PART D: BUDGET IMPLEMENTATION MEETING
In this part of the task, you will participate in a role play with your assessor and at least three other
students from your class. Your assessor and the other students will play the roles of the other supervisors
and managers from Grow Management Consultants.
You are now required to meet with the managers and supervisors to communicate the budgets you have
developed and the updates to the policies, procedures and systems you have made to assist in
implementing the budget. You are also required to explain reporting requirements and financial
delegations as outlined in the company’s financial policy and procedures, as well as explain the company’s
compliance requirements and tax liabilities.
1. Prepare for your budget implementation meeting. Prepare a PowerPoint presentation that you can
deliver at the meeting. Your presentation should include:
a) A high-level overview of the budget you have prepared including:
i. Key assumptions
ii. Projected income for each revenue stream
iii. Budgeted amounts for key expense items
iv. Overall outcome of the budget
b) Key responsibilities to ensure budget is adhered to.
c) Discuss the amounts allocated to each activity, including the conference and the e-book.
d) Explain any allowances you have made for contingencies.
e) A summary of the changes you have made to the financial policies and procedures and systems in
place to ensure budget control
f) A discussion of any significant issues that the managers should be aware of in relation to previous
financial reports and to help them adhere to the budget.
g) An explanation of the templates and systems you have developed to help manage the budget and
the reason for setting them up in the way you have
h) Provide an outline of the financial policy and procedure so as to ensure that roles and
responsibilities are understood and risks of misappropriation of funds/incorrect recording of
financial transactions is minimised.
i) How risks have been managed to ensure there are no opportunities for misappropriation of funds.
j) A summary of the venues that you found including the price and features of each, and how the
organisation can put forward a proposal to the venue operator to use their facility.
k) Explain the due diligence measures that you have taken in preparing the budget.
2. Ensure your presentation is clear, presented professionally, and free from spelling and grammatical
errors.
3. Participate in the budget meeting at a time negotiated with your assessor. Note the other three
students will need to be available to participate in the meeting. Your assessor and the other students
may ask you questions during the meeting which you will need to respond to. During the meeting:
a) Present your slides, explaining each of the points outlined in Point 1 above.
b) Circulate copies of your budget and a copy of your slides (other students must return these to you
at the end of your presentation).
c) Circulate the changes you made to the financial management policies and procedures (other
students must return these to you at the end of your presentation)
d) Circulate and explain the systems and proformas you have set up (other students must return
these to you at the end of your presentation).

4. At the meeting ensure demonstrate effective communication skills and ensure the supervisors and
managers know what is expected of them by:
 Speaking clearly
 Providing concise information in a language that is appropriate for the audience
 Ask questions to check that managers and supervisors are clear about the budget.
 Using active listening techniques to confirm or clarify information
 Ensure that the participants of the meeting agree that they have understood what’s required of
them or clarify any points if needed.
Submission Items
 The PowerPoint presentation you prepared for the meeting
Research and report on the business’ key financial compliance requirements and liabilities
for tax.
Quarterly GST report
If your GST turnover is less than $20 million and we haven't told you to report GST monthly, you
can report and pay GST quarterly. If you report and pay quarterly, you use one of three reporting
methods: Full reporting method: If your GST turnover is $10 million or more, you need to use the
full reporting method. Under the full reporting method, you calculate, report and pay your GST
amounts quarterly. You provide more detailed information on your business activity statements
(BAS). You can use either the accounts method or the calculation worksheet method to work out
your GST amounts for your BAS. You have the option to use the GST full reporting method or
Simpler BAS when you report quarterly if either:
 Your GST turnover is less than $10 million but you have aggregated turnover greater than
$10 million (for the previous year or the current year)
 You make input-taxed supplies as your main business or enterprise activity.
What you need to report
If you report and pay GST quarterly and your GST turnover is $10 million or more, you must
report amounts at the following labels on your activity statement each quarter:
 G1 Total sales
 G2 Export sales
 G3 Other GST-free sales
 G10 Capital purchases
 G11 Non-capital purchases
 1A GST on sales
 1B GST on purchases.
You can use either the accounts method or the calculation worksheet method to work out your
GST amounts.
If you have a wine equalisation tax (WET), luxury car tax (LCT) or fuel tax credit (FTC)
obligations or entitlements, you must also report these amounts each quarter (labels 1C, 1D, 1E,
1F, 7C or 7D). These labels are shown on your BAS if you have these obligations.
Simpler BAS reporting method
If your GST turnover is less than $10 million, you need to use the Simpler BAS reporting method
unless you are on GST instalments.
Under this reporting method, you report less information on your quarterly BAS, but still calculate
and pay your GST amounts quarterly.
You must report amounts at the following labels on your Simpler BAS form each quarter, if your
GST turnover is less than $10 million:
 G1 Total sales
 1A GST on sales
 1B GST on purchases.
You do not need to report amounts at the following labels:
 G2 Export sales
 G11 Non-capital purchases.
1F, 7C or 7D). These labels are shown on your BAS if you have these obligations.

GST instalments method (pay quarterly and report annually)
You may elect this reporting method if you meet the eligibility requirements, including where you
either:
 Carry on a business with an aggregated turnover of less than $10 million

 Do not carry on a business (for example, you are a not-for-profit organisation) and your
GST turnover is $2 million or less.
If you elect to use this reporting method, you pay a quarterly GST instalment that we work out
(you can vary it) and report your actual GST information annually on an annual GST return.
You must report amounts at the following labels on your annual GST return:
 G1 Total sales
 1A GST on sales
 1B GST on purchases
 1H GST instalment amounts reported in your quarterly instalment notices for the period
shown on the annual GST return.
You do not report amounts at these labels:
 G2 Export sales
 G11 Non-capital purchases.
1F, 7C or 7D). These labels are shown on your annual GST return if you have these obligations.
You use your annual GST return to account for any difference between your actual GST liability
and the total of your GST instalments for the year (or the period shown on your annual GST
return). You show the total amount of GST instalments that were payable for the year (or the
period shown on your annual GST return) at label 1H of your annual GST return.

If the total instalments are more than your actual GST liability for the year, you claim a refund
from us. If your total instalments are less than your actual GST liability, you must pay the
difference to us by the time your annual GST return is due.
Under the GST instalments method, any refund you may be entitled to is paid after you lodge your
annual GST return for the year.
Lodgment and payment dates
The following table provides a summary of the payment and lodgment dates for businesses that
report or pay GST quarterly.
Table 1: For businesses that report or pay GST quarterly
Quarter Payment and lodgment date
September quarter 28 October
December quarter 28 February
March quarter 28 April
June quarter 28 July
If you have chosen to pay by GST instalments, your instalments are also due on the dates shown
above.
If you are a primary producer or a special professional who pays only two GST instalments for the
year, your instalments are due on 28 April and 28 July.
If the due date falls on a weekend or a public holiday, you have until the next business day to
report and pay.

If you pay GST instalments, your annual GST return will be due on the same date your income tax
return is due. If you are not required to lodge an income tax return, your annual GST return will
be due by 28 February following the financial year the return covers.
Changing reporting methods
Your GST turnover directly determines whether you use the Simpler BAS or full reporting
method. If your GST turnover increases above or falls below $10 million, your reporting method
changes.
To elect to use the GST instalment method, there are additional eligibility requirements.
If you want to switch from or to GST instalments, you need to contact us.
If you contact us by 28 October, your election or revocation will generally take effect from 1 July
of that financial year (or by the concessional due date, if you lodge your September quarter
activity statement through a registered agent).
If you contact us after 28 October, your election or revocation will generally take effect from
1 July of the next financial year.
You may request in writing that your election take effect from the start of an earlier tax period.
However, we will only approve your request under exceptional circumstances.
 PAYG withholding obligations
Your self-managed super fund (SMSF) has to withhold tax from benefit payments if the member
is:
 under 60 years old

 under 60 years old and the benefit is from a reversionary capped defined benefit income
stream where the deceased was 60 years or over when they died
 60 years old or over and the benefit is from a capped defined benefit income stream.
See also:
 Refer to Schedule 13 – Tax table for superannuation income streams for more information
on when to withhold.
When is tax not withheld?
Tax is not withheld if the member:
 is 60 years old or over and the benefit is from an income stream which is not a capped
defined benefit income stream
 has died and the benefit is paid to a dependent beneficiary as a lump sum
 has died and the benefit is paid to a dependent beneficiary as an income stream which is
not a capped defined benefit income stream and either the dependant or member were
60 years or over
 has a terminal medical condition
 died in the line of duty as a member of the defence force, police or protective services and
the benefit is paid as a lump sum.
How to withhold tax
If you have to withhold tax, you need to:
 register for pay as you go (PAYG) withholding

 obtain a tax file number declaration from the member
 issue a PAYG payment summary to the member for a
o superannuation lump sum
o superannuation income stream
 lodge a PAYG withholding payment summary statement with us.
 PAYG income tax instalment
Pay as you go (PAYG) instalments is a system for making regular payments towards your
expected end of year income tax liability. You report and pay your PAYG instalments on your
business activity statement (BAS).
You'll need to lodge your activity statements and pay all your PAYG instalments before you lodge
your tax return. This will make sure your income tax assessment takes into account the
instalments you've paid through the year.
You can generally choose between two options for calculating and paying your PAYG
instalments, which will apply for the income year.

Option 1 – Instalment amount
If you choose option 1 'instalment amount', you'll pay the PAYG instalment amount we calculate.
We calculate this amount using the business and/or investment income from your most recently
assessed income tax return. The benefit of this method is that you'll know the amount of your
instalment you need to pay each quarter, without having to work it out yourself, which can help
you plan and budget for the payment.
Option 2 – Instalment rate
This option allows you to calculate your PAYG instalment amount based on your actual income
for that period multiplied by a rate we provide you. The benefit of this method is that your
instalments are based on your income as you earn it, instead of a projection based on your tax
return. You may prefer this method if your income changes throughout the year.
PAYG instalment notice
If you pay PAYG instalments using option 1 ‘instalment amount‘ and have no other obligations
that require a BAS, we will send you an instalment notice rather than a BAS. You don't need to
lodge this notice (unless you want to vary the amount), you just need to pay the amount shown on
the notice, by the due date.
 Payroll tax obligations (state government)


Taxes and duties levied by state and territory governments include:
 stamp duty
 payroll tax
 land tax.
These taxes and duties vary between states and territories. You need to ask your local
state/territory revenue office about them and not us (the ATO) – contact details are provided.
States and territories also have their own laws regulating the fundraising activities of not-for-profit
(NFP) organisations.

Stamp duty
Stamp duty – also known as ‘duty’ in some states – is a tax on written documents ('instruments')
and certain transactions, including
 motor vehicle registrations and transfers

 insurance policies
 mortgages
 transfers of property such as businesses, real estate and certain shares.
The types of instruments that are subject to duty vary between the states and territories. The rate
of duty varies according to the type and value of the transaction involved and may not be charged
on all transactions listed above in every jurisdiction. Depending on the nature of the transaction,
certain concessions and exemptions may be available.
Payroll tax
Payroll tax is levied by state and territory governments on the wages paid by employers.
Employers are liable for payroll tax when their total Australian wages exceed the tax-free
threshold. Tax-free thresholds vary between states and territories.
Don't confuse payroll tax with the pay as you go (PAYG) withholding system. Payroll tax is
payable to the state/territory by an employer, based on the total wages paid to all employees.
Wages include salary, allowances, superannuation contributions, fringe benefits, shares and
options and certain contractor payments.
Under the PAYG withholding system, amounts are generally withheld from payments made to an
individual and sent to us to offset the individuals' end-of-year income tax liability.
Some NFP organisations may be exempt from payroll tax provided specific conditions are
satisfied. These organisations may include religious institutions, public benevolent institutions,
public or NFP hospitals, NFP non-government schools and charitable organisations.
See also:
 Payroll Tax AustraliaExternal Link

 Pay as you go withholding

Land tax
Land tax is imposed in all states and the ACT but not in the Northern Territory. It is a tax levied
on landowners – except in the ACT where it applies to all residential properties that are rented or
are owned by a trust or corporation.
Land owned and used by certain NFP organisations may be exempt from land tax. These
organisations generally include NFP societies, clubs and associations, religious institutions, public
benevolent institutions and charitable institutions.
Concessional rates of tax may be applied if land is used as a person’s principal place of residence,
primary production land or land used by a club for sporting purposes
Superannuation guarantee
Under the superannuation guarantee, employers have to pay superannuation contributions of 9.5%
of an employee's ordinary time earnings if:
 when an employee is paid $450 or more before tax in a month and is:
 over 18 years, or
 under 18 years and works over 30 hours a week.
This applies to full-time and part-time employees and some casual employees and includes
temporary residents.
Superannuation has to be paid at least every 3 months, into the employee's nominated account.

ASSESSMENT 3 – Budget Monitoring
Task summary:
This task requires you to make adjustments to the budget based on a number of changes that have
occurred within the business.

Resources and equipment to be provided by the student:
 Computer and Microsoft Office
 Access to the internet for research
 Your Budget from Assessment Task 2
When and where will I complete this task?

This task will be completed in your own time as homework or you may be given time to do this task in class
– your assessor will advise.
What do I need to submit?

 Revised Budget
 Email (word document) to team members explaining the changes to the budget and how this impacts
them
What happens if I get something wrong?

If your assessor sees that you have not completed all parts of this task satisfactorily, the details of
resubmission will be discussed with you. You will only need to redo the parts of the task that are not
satisfactory, however you will need to resubmit the entire assessment. Your assessor will advise of the due
date for the resubmission.
INSTRUCTIONS:
Its five months into the year that you budgeted for and the conference has now been held.
The conference went really well, and the organisation had great feedback, however the return on the
conference wasn’t as strong as it was forecast for as a number of unexpected things happened.
Firstly, the conference organiser mis-communicated the number of attendees to the conference meaning
that catering was provided for too many people and food went to waste but still had to pay for. The venue
was told there were 99 attendees to be catered for.
There were however more sales of conference tickets than anticipated of 89 attendees.
There was an additional charge by the venue for late bump-out which had not been accounted for of
$3,658.
In other areas of the business, the organisation has seen a significant increase in staff turnover for reasons
out of its control. This means that more time has been spent on training new staff members, there were
additional costs for recruiting new staff that hadn’t been accounted for of $3,500 in advertising costs. There
was an additional cost of $6,850 to cover temporary staff while the organisation was searching for new
staff members and to meet team demands.
Consulting revenue has fluctuated from month to month bringing in:
Month 1 - $130,000
Month 2 - $70,000
Month 3 - $83.000
Month 4 - $110,000
Month 5 - $150,000
1. Based on the information provided in the above additional information, make changes to the budget
you submitted in Task 2.
2. Highlight changes you have made based on the above information by making the cells changed
yellow.

3. Based on this information, there may be other adjustments you need to make to the budget so the
business can still meet its financial goals. Make any changes to the budget in other areas by
highlighting those cells in blue.
4. Prepare an email (in a word document) that you could send out to affected team members (managers
and supervisors) explaining the changes you have made to the budget and how this impacts them.
Submission Items
 Revised budget with cells appropriately highlighted
 Email (word document) to team members explaining the changes to the budget and how this impacts
them

Grow Management Consultants Pty Ltd - Budget Revisions
1 July 2019 - 30 June 2020
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total
INCOME
Consulting fees 130,000 70,000 83,000 110,000 150,000 108,600 108,600 108,600 108,600 108,600 108,600 108,600 1,303,200
Conference 66,750 $66,750
E-book 10,000 $10,000
Executive search 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 132,000
NET INCOME 141,000 81,000 170,750 121,000 161,000 119,600 119,600 119,600 119,600 119,600 119,600 119,600 $1,511,950
EXPENSES
Salaries/wages 45,351 45,351 45,351 45,351 45,351 44,100 44,100 44,100 44,100 44,100 44,100 44,100 535,456
Superannuation 5,448 5,448 5,448 5,448 5,448 5,250 5,250 5,250 5,250 5,250 5,250 5,250 63,990
Cleaning 840 840 840 840 840 840 840 840 840 840 840 840 10,080
Accounting fees 0 0 7,164 0 0 0 0 0 0 0 0 0 7,164
Advertising and marketing 8,500 5,000 5,000 5,000 5,000 1,500 1,500 1,500 1,500 1,500 1,500 1,500 34,440
Contract writer (e-book) 10,500 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 51,849
Computer software 1,200 1,200 1,200 1,200 1,200 500 500 500 500 500 500 500 9,500
Motor vehicle expenses 454 454 454 454 454 454 454 454 454 454 454 454 5,448
Utilities 1,032 1,032 1,032 1,032 4,128
Insurance 353 353 353 353 353 353 353 353 353 353 353 353 4,236

Office supplies 1,500 1,500 1,500 1,500 1,500 550 550 550 550 550 550 550 11,350
Lease/loan payments 132 132 132 132 132 132 132 132 132 132 132 132 1,584
Rent 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 45,108
Sundries 1,000 1,000 1,000 1,000 1,000 150 150 150 150 150 150 150 6,050
Travel and Accommodation 1,200 1,200 1,200 1,200 1,200 500 500 500 500 500 500 500 9,500
Repairs & maintenance 630 630 1,260
Telephone 298 298 298 298 298 298 298 298 298 298 298 298 3,576
Conference venue and catering 3,000 8,608 $11,608
Speaker fees and travel 10,000 $10,000
Marketing (conference only) 2500 2,500 $5,000
Conference bags 1,000 $1,000
Conference casual project officer 5,000 5,000 5,000 5,000 5,000 5,000 $30,000
E-book writer 830 830 830 830 830 830 830 830 830 830 830 830 $9,960
Desktop publishing 3000 $3,000
Marketing (e-book) 1200 $1,200
TOTAL EXPENSES 95,097 78,624 96,288 86,394 76,124 67,975 64,007 62,975 62,975 64,637 62,975 62,975 $881,047
TOTAL INCOME 141,000 81,000 170,750 121,000 161,000 119,600 119,600 119,600 119,600 119,600 119,600 119,600 $1,511,950
SURPLUS/ DEFICIT 45,903 2,376 74,462 34,606 84,876 51,625 55,593 56,625 56,625 54,963 56,625 56,625 $630,903

Review of overall performance and gross/net profit margins
Financial information
Actual Budgeted
Net profit margin

Net Profit Margin = Net Profit / Total Revenue 49.37% 48.74%
Calculation of variation in actual versus budgeted amounts for each income source
PROFIT & LOSS 2016 - 2016 -

2017 2017
Income Actual Budget Variance % of an over-
budgeted amount
Consulting fees $1,410,720 1,210,000 $200,720 16.59%
Workshops $45,000 75,000 -$30,000 -40.00%
Publications $15,000 10,000 $5,000 50.00%
Executive Search Service $144,000 144,000 $0 0.00%
Gross profit/net sales $1,614,720 1,439,000 $175,720 12.21%

Expenses
Accounting fees $7,165 504,000 - -98.58%

$496,835
Advertising and marketing $5,250 63,000 -$57,750 -91.67%
Computer software $4,830 10,080 -$5,250 -52.08%
Insurance $4,028 6,300 -$2,272 -36.06%
Lease/loan payments $1,575 525 $1,050 200.00%
Motor vehicle expenses $5,444 11,550 -$6,106 -52.87%
Office cleaning $10,800 4,200 $6,600 157.14%
Office supplies $2,207 4,200 -$1,993 -47.45%
Rent & Rates $45,108 4,200 $40,908 974.00%
Repairs & Maintenance $1,260 4,200 -$2,940 -70.00%
Salaries/wages (including $529,200 1,575 $527,625 33500.00%
PAYG)
Superannuation $63,000 1,365 $61,635 4515.38%
Telephone $3,569 45,108 -$41,539 -92.09%
Utilities $4,131 2,100 $2,031 96.71%
Sundries $2,384 5,250 -$2,866 -54.59%
Contract writer (e-book) $48,090 5,000 $43,090 861.80%
Travel and Accommodation $5,654 10,000 -$4,346 -43.46%
E-book $10,000 5,000 $5,000 100.00%
Desktop publishing $3,000 1,000 $2,000 200.00%
Marketing (e-book) $1,200 30,000 -$28,800 -96.00%
Conference venue and catering $10,000 10,000 $0 0.00%
Speaker fees and travel $11,000 3,000 $8,000 266.67%
Marketing (conference only) $7,500 1,200 $6,300 525.00%
Conference bags $1,200 1,575 -$375 -23.81%
Conference casual project $30,000 3,150 $26,850 852.38%
officer
$0
Total expenses $817,595 737,578 $80,017 10.85%

NET PROFIT (Net Income) $797,125 $701,422 $95,703 13.64%
Calculation of variation in actual versus budgeted costs, focusing particularly on conference costs.
Actual Budget Variance % of an over-

budgeted amount
Marketing (e-book) $1,200 30,000 -$28,800 -96.00%
Conference venue and $10,000 10,000 $0 0.00%
catering
Speaker fees and travel $11,000 3,000 $8,000 266.67%
Marketing (conference only) $7,500 1,200 $6,300 525.00%
Conference bags $1,200 1,575 -$375 -23.81%
Conference casual project $30,000 3,150 $26,850 852.38%
officer
Recommended revisions to the budget for conference costs for 2017 – 2018.
Type Budgeted Recommended revisions

Cost to the budget
Venue and catering in Sydney CBD $5,250 $10,000

(5% increase)
Speaker fees and travel $11,000 $11,000

(10% increase)
Marketing $5,500 $7,500

(10% increase)
Conference bags $1,050 $1,200

(5% increase)
Staff time (appoint casual Project $33,000 $30,000

Officer for 6 months, may be
permanent depending on success)
(10% increase)
Total costs $55,800 $59,700

Proposed conference fee for 2018 conference assuming attendance of 70 people and to
make a profit of at least 20%.
Anticipated numbers: 70 people. Price of conference to be $856.
To gain 20% of profit, then price of conference should be at least $800.
Email:
To: Managers
From: Financial management team.
Subject: Intimation about profit & loss accounts
Date: 18 Jan 2018
Dear Sir/Madame,
I’m writing this email to inform you in regard to analysing profit and loss account. Following were the
profit accounts which had generated gross income for the company:
Income Actual Budget Variance % of an over-budgeted amount

Consulting $1,410,720 1,210,000 $200,720 16.59%
fees
Publications $15,000 10,000 $5,000 50.00%
Gross $1,614,720 1,439,000 $175,720 12.21%

profit/net
sales
However, income from workshops was reduced by 40%
Workshops $45,000 75,000 - -40.00%

$30,000
Even though, the company has incurred loss from workshops but still company had managed to earn
gross income and net profit.
Gross profit/net $1,614,720 1,439,000 $175,720 12.21%

sales
NET PROFIT (Net $797,125 $701,422 $95,703 13.64%
Income)

Above information indicates that the company has earned profit from the profit & loss
statement which was favourable for the company.
Best regards,

ASSESSMENT 4 – Review Project
Task summary:
This assessment task requires you to review and analyse the draft Profit and Loss Statement and
associated account ledgers for Grow Management Consultants for the 2018 – 2019 year, identify and fix
any errors they find, keeping an audit trail of your changes and then compare financial results with the
budgeted amounts. You must then prepare a report to summarise your analysis and make
recommendations on the effectiveness of financial management systems.
Resources and equipment to be provided by the student:

 Computer and Microsoft Office
 Access to the internet for research
 Your Budget from Assessment Task 2
Resources and equipment to be provided by the rto / assessor:

 Financial Review Report Template
 Profit and Loss Statement FY 2019
 Statement of Cash Flows FY 2019
 Budget vs Actuals FY 2019
 When and where do I complete this task?
This task will be completed in your own time as homework or you may be given time to do this task in class
– your assessor will advise.
What do I need to submit?

 Revised Profit and Loss Statement and associated ledger accounts with your changes and audit trail
marked
 Report covering your analysis and recommendations
What happens if I get something wrong?

If your assessor sees that you have not completed all parts of this task satisfactorily, the details of
resubmission will be discussed with you. You will only need to redo the parts of the task that are not
satisfactory, however you will need to resubmit the entire assessment. Your assessor will advise of the due
date for the resubmission.

Student Instructions:
It is now one year later, and you are required to review the draft profit and loss statements for 2018 –
2019 to identify and amend any errors in the financial reports and then analyse the information to make
your recommendations.
You then need to analyse the data and make recommendations to the Principal Consultant about the
conference for the next year. The Principal Consultant has asked you to focus on this because while
there was very positive feedback from the conference and the company wishes to run it next year, there
needs to be revisions to the budget and a potential price increase for the conference fee to make the
conference profitable.
The Principal Consultant would like you to report on a proposed conference fee given a 10% increase in
all the recorded costs for the conference as shown in the profit and loss statement (and that match the
conference costs for the document you reviewed in Assessment Task 2) and assuming 70 people will
attend the 2020 conference. The Principal Consultant would also like to make a minimum of 12% return
on the investment in running the conference, allowing for all contingencies.
Complete the following activities:

5. Review the draft profit and loss statement. You must ensure that the draft Profit and Loss Statement is
accurate, based on the account ledgers provided. To do this:
a) Review each entry on the Profit and Loss Statement, comparing them with any provided
account ledgers in the other excel sheets.
b) Ensure any entries into the ledgers are relevant to the account it has been put into.
c) Where any mistakes are identified, update the ledger page and the corresponding entry on the
profit and loss statement (where applicable) and highlight your changes in red text.
d) Keep an audit trail of your changes, by writing in the changes you make at the bottom of each
page in the space provided.
e) Ensure the profit and loss statement is accurate and shows correct figures.
6. Now that you have fixed the errors in the Profit and Loss Statement, analyse the information and
compare it with projected results from the budget you prepared in Assessment Task 2. Write a report,
using the Financial Review Report template provided, that you can provide to the Principal Consultant,
covering the following items:
a) Overall performance of the year.
b) Calculation of variation in actual versus budgeted amounts for each income source.
c) Calculation of variation in actual versus budgeted costs, focusing particularly on conference
costs. Include in your report any information or reasoning about why there are variances.
d) A summary of the recommended revisions to the budget in 2020 to ensure financial viability of
the organisation.
e) An outline of significant issues in the financial statements, comparing these financial
statements to the year prior.
f) Provide advice on any allowances that should be made for contingencies in the next year’s
budget, including dollar amounts, and rationale.
g) A summary of the effectiveness of the financial management processes and any changes that
should be made to ensure ongoing financial viability.
Submission Items
 Revised Profit and Loss Statement and associated ledger accounts with your changes and audit trail
marked
 Financial Review Report covering your analysis and recommendations

Company X
Aged Debtors Analysis
As of December 31st, 2016
Report: Aged Debtors Analysis
Client Range: All
Client Name 120+ Days 90 Days 60 Days 30 Days Current Total
$4,356.
Client 1 $- 00 $- $- $- $-
Client 2 $2,714.00 $- $- $- $- $-
$3,781.0
Client 3 $- $- 0 $- $- $-
Totals 2,714.00 4,356.00 3,781.00 0.00 0.00 0.00
From the table can show we are have only 3 clients. Are satisfied in the condition of not paying
their fees in the time. With our company must be has a policy of allowing our clients some
additional condition for updated the new policy with this issue.
For the old client we suggest the sent the update about interest charges on fees toward debtors that
satisfy conditions related to the amount of time the debt hasn’t been pay on time.
- If the debt hasn’t been paid for the amount of time 60-90 days outstanding, We will
charge additional interest of 5%. Client 3 falls in this category with his outstanding debt
of $3,781.00. If the debt is paid within this period, the clients out of pocket expense will
be $3970.00.
- If the debt hasn’t been paid for the amount of time 90-120 days outstanding, We will
be $4,791.60
- - If the debt hasn’t been paid for the amount of time 60-90 days outstanding, We will
be $3970.00
- - If the debt hasn’t been paid for the amount of time 120+ days outstanding, We will

be $3,528.20
- If the debt hasn’t been paid for the amount of time 120+ days limit and opts out to pay in
instalments we will charge yet another additional amount of 2% of the amount of
instalment paid
With the last of recommendation we should to keep:

– Perform credit checks on new customers.
– Monitor their customers for payment defaults, court judgments and ASIC changes
(administration, winding up orders, change of directors).
– Be alerted when their clients are in financial difficulty.
– Use the Creditor Watch membership logo on their invoices, statements and final notices. This
encourages customers to pay their bills on time.
– Access debt collection templates including final notices and letters of demand.


BSBFIM601 Manage Finances: ASSESSMENT 1 - Written Questions

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BSBFIM601 Manage Finances: ASSESSMENT 1 - Written Questions

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BSBFIM601 Manage finances

ASSESSMENT 1 – Written Questions

2. Answer the following questions relating to GST in Australia:

b) When do you need a tax invoice to claim a GST credit?

BJSB Pty Ltd. trading as Learners Tool - BSBFIM601

b) the methods by which it can be paid

7. Answer the following questions relating to Pay-as-you-go (PAYG) in Australia:

BJSB Pty Ltd. trading as Learners Tool - BSBFIM601

10. Describe the following terms:

BJSB Pty Ltd. trading as Learners Tool - BSBFIM601

d) Financial accounting system

11. Explain what is meant by audited financial statements?

BJSB Pty Ltd. trading as Learners Tool - BSBFIM601