Assessment Templates

BSBFIM501 Manage budgets and financial plans

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TASK 2: Knowledge Questions Template

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Please provide answers to the following 17 questions.

1. Describe each of the six (6) steps of the accounting process required to record all of the
transactions that take place, and to organise and collate this information before finally
producing financial reports that are analysed and used in decision making.
Provide a description of each of the 6 steps:
• Transactions
• Journals
• General ledger
• Trial balance
• Balance day adjustments
• Accounting reports
- Transactions are the means by which individuals or legal entities exchange resources.
- Journals relates to the period of the current day.
- The primary goal of general ledger accounting is to offer detailed information on a
company's real and economic financial circumstances.
- A trial balance is an accounting report that summarizes a company's operations in terms of
costs, expenses, and revenue.
- When a business operates on a non-cash basis, an expense is logged when a bill is paid, and
an income is logged when money is received. The accountant will produce adjustment journal
entries to place the revenue and spending in the proper timeframe.
- When a corporation operates on a non-cash basis, accounting reports are prepared, and a
cost is recorded when a bill is paid and an income is recorded when money is received. The
accountant will produce adjustment journal entries to place the revenue and spending in the
proper timeframe.

2. In 50 words or more, explain how a revenue-received transaction with a credit balance has a
corresponding debit against an asset or liability account.
The debit and credit balances are always equal when comparing a revenue-received
transaction to an asset or liability account. We lower liabilities by the same amount as we
increase the asset. The revenue account will then be modified in the same manner as the
asset or liability account.

3. In 50 words or more, describe the difference between cash basis and accrual basis
accounting when recording transactions, producing financial reports.
The incident must be recorded on the date it occurred, according to the Competence Regime.

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 The Competence Regime is defined by accounting as the report's submission on the date of
the triggering event. In the Cash Regime, we treat report registration like a bank account, and
we keep track of documents until they are due for payment or reception.

4. Explain in 50 words or more the difference between the profit calculated in the trading
account compared with the profit calculated in the profit and loss account.
The results of commercial activity, such as goods purchases and sales, are displayed in a
trading account. The balance sheet depicts a business's actual profit or loss over time. The
profit and loss account reveals the company's genuine earnings, whereas the trade account is
part of the financial statement.

5. List at least four (4) of the financial regulatory requirements including the relevant
legislation that businesses must comply with.

- GST reporting and other taxation-related issues on the declaration of economic

activity.

- Compliance with the Income Tax Assessment Act 1997.

- Administration and reporting guarantee levy for superannuation.

- Compliance with the Australian Accounting Standards AS/NZS.

6. Describe at least four (4) functions of the Australian Taxation Office in terms of the financial
management requirements of a business and in 50 words or more explain the Good and
Services Tax.
1. Managing Australia's superannuation system on a large scale
2. revenue collection
3. managing a variety of programs that deliver community transfers and benefits.
4. handling the GST on behalf of the Australian states and territories.

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 The GST (Goods and Services Tax) is a value-added tax that is levied on the majority of goods
and services sold for domestic consumption.
The GST is paid by consumers, but it must be remitted to the government by businesses
selling the goods and services.

7. In 50 words or more, describe the purpose of an audit in financial records management.

This technique is aimed to ensure that a company's financial, equity, and accounting data is
correct for a certain length of time, providing greater security to shareholders and managers
while also protecting the company's assets. In addition, the audit verifies all facts and
operations that occur within the business and conclude in accounting.

8. In 50 words or more, explain why it is important when monitoring budgets to make balance-
day adjustments at the close of an accounting period, before preparing financial statements.
The budget should be examined on a regular basis to see if any modifications are needed to
improve the company's financial status. As a result, it's vital to evaluate how the company's
budget is performing right now, and then to identify any major issues that may arise in both
the spending and earning areas.

9. Give at least three (3) reasons why work teams need access to budgets and financial plans
and in 50 words or less, outline the ways financial information can be shared effectively with
relevant stakeholders.
Adapt to the specifications;

Adjustment;

Create tactics to get the desired results.

Financial information documentation can be discussed at special meetings.

This process can be done monthly or weekly, depending on your needs.

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10. Identify at least five (5) signs that team members are under-performing and may need
support in their role to manage finances for the organisation.
1. Failure to achieve or exceed performance goals.

2. That person was overloaded with chores that should have been simple.

3. Disruptive or disruptive behaviour that has a bad impact on coworkers.

4. Fail to complete or fulfill the duties of the position satisfactorily.

5. Employees do not meet the minimum requirements when performing their jobs.

11. In 50 words or more, describe the process of monitoring actual expenditure, variance and
costs controls to avoid budget over runs.

Any financial outlay is a long-term investment. When discussing budgets, the term
"expenditure" is frequently used. The variance is calculated by comparing budgeted revenue
and expenditure to actual revenue and expenditure, which results in a revenue difference
between the budget and actual revenue. To avoid overruns, evaluate source material related
to the spending categories and collect documentation of the difference. Look for any seasonal
variables or ordering timeframes that may have contributed to the variance if it has been
confirmed. Notify your manager of the problem by writing down the reasons.

12. In 50 words or less for each, provide a description for the following types of resource data
commonly used by the work team for managing budgets and financial plans.

Account and routing numbers, current and minimum balances, bank

Bank account records data, adjustment categories, and any notes you want to link can all be
found in the bank account records.

The bank account records contain account and routing numbers,

GST calculations and current and minimum balances, bank data, adjustment categories,
any credits and any notes you want to link.

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 The bank account records contain account and routing numbers,
Wages/salaries books current and minimum balances, bank data, adjustment categories,
(including PAYG, and any notes you want to link.
superannuation, etc.)

It's defined as a recording technique that doesn't always take into

account the price of production. Work costing software can be used
Job costing by a team leader or accountant to keep track of the costs of each job.

13. Using 50 words or less, outline the process of analysing and documenting resource data, and
making recommendations for improvement.
It's characterized as a recording method that doesn't always take the cost of production into
account. A team leader or accountant can use work costing software to keep track of the
costs of each job.

14. Outline at least four (4) advantages of using software programs or electronic spreadsheets
when monitoring and analysing budgets.
- It's defined as a recording technique that doesn't always consider the expense of
production. Work costing software can be used by a team leader or accountant to keep track
of the costs of each job.
- This software arranges data in a way that makes it simple to find and review each entry.
- It takes less time to create reports and make financial decisions.
- Stakeholders can access information from any location.

15. In 50 words or more, explain how planning, implementation and modifying contingency
plans is used to control financial risks for a business.
To control a company's financial risks, contingency plans must be established, implemented,
and modified. Because the environment determines the number and intensity of events'
effects on company activities, the domain of business operations should be addressed in the
formulation of an emergency plan. Financial ramifications of the events, as well as financial
measures for the company's long-term viability, must be factored into the strategy. The
effectiveness of a contingency plan is determined by how it is implemented. If the strategy is

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 not implemented properly, the organization will suffer even larger financial losses.

16. In 50 words or less, outline the advantages of regular reporting of budgets and financial
plans.
Assist in the transparency of the company and its activities. It also aids in the detection and
correction of arithmetic errors.

17. In 50 words or less describe the budgeting process of analysing and managing cash flow.
Budgets help with the development of cash forecasts, which are then used to determine cash
flow and outflow. The company's goal is to get cash flow in line with the budget so that there
are no more issues. Seasonal income and expenditure cash flow analysis can help a
corporation plan for the coming fiscal year.

End of Questioning - 17 questions in total.

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 TASK 3: Project
Portfolio of
Financial Information

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Table of Contents
Budget Report..............................................................................................................................3
Briefing: Retail Outlet Managers.................................................................................................4
Briefing: Sales Staff......................................................................................................................4
Short Report................................................................................................................................5
Blog Post......................................................................................................................................6
Staff email:...................................................................................................................................7
Plan: Monitoring revenue and expenditure................................................................................8
Proposal submission: Board of Directors.....................................................................................9
Executive briefing......................................................................................................................10
Revised Budgeting and Financial Planning Procedures.............................................................11

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Budget Report
Financial strategy for the next 5 years:

The Income's current revenue is expected to rise from $150 million in 2018 to $262 million in
2023. The rest of the budget will suffer if revenue isn't fulfilled, unless we keep an eye on it. As a
result, the goal can be to keep track of product sales on a regular basis and spend in
training/marketing (promotion) in order to meet sales targets. The Expenditure's costs are now
rising at a slower rate than profits in order to ensure a long-term growth scenario. If we don't
keep it under control, the cost will rise, lowering the amount of surplus available for
reinvestment. As a result, the recommendation is to continue concentrating on ways to
minimize costs without sacrificing efficiency, allowing income to grow without incurring more
costs. In the coming years, sales and expenses are expected to improve, resulting in a
continuous growth in profit. BizOps will stagnate or maybe lose money if nothing is done,
demonstrating inefficiency or an unsustainable marketing approach. It is recommended that you
keep going.

Forecast (next quarter)

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Briefing: Retail Outlet Managers

Senior management mandates that the budget be based on predicted sales demand, rather of
just inflating prior results by a predetermined proportion. Only act with the value to be sold
because this decreases the error margin. The effect on working conditions is also reducing. This
plan's budget is based on an estimate of sales and production volume, and the accuracy of that
estimate determines the plan's effectiveness. In the coming fiscal year, as a senior manager, I've
opted to achieve a 15% increase in sales with a fixed budget.

Contingency bugdet

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Briefing: Sales Staff

Employees in BizOps must grasp the necessity of meeting financial targets. Salespeople must
therefore be aware of the company's unique product line in Australia, as well as its quality and
innovation, emphasizing how what we offer is an environmentally responsible answer for our
customers.

Because hools aren't selling well, a strategy has been designed to do a month-long special
promotion and discount sale. The marketing strategy, which is made up of four components,
revolves around the target audience. These four elements are referred to as the 4Ps.
Promotional, personal sales, and sales promotion are all part of the promotional mix. It's also
vital to remind employees of the aim of promotion in the workplace, which in this case is to
persuade clients that our products and services are superior to others.

The corporation would invest $3 million in Hool shares and offer a 10% discount on commodities
for ten days, as well as spend $30,000 on promotion, to achieve the goal. The sale price
reduction would be the equivalent of a 10% discount off the regular sale price.

Short Report

*Budgeting requires allocating revenue and expenses in such a way that money is distributed
strategically. You should establish a detailed budget plan because it will make financial
management and analysis easier. Creating a budget to keep track of your spending is a simple
strategy that can help you regulate and assess how you spend money. Prepare the appropriate
individuals for the budgeting job to ensure that the company's budgeting expectations are
satisfied.

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*A technique for controlling earnings and results liquidity is referred to as "cash flow." The
method of calculating cash flow is similar to that of budgeting in that we must organize our
earnings and expenditures to see how the money is dispersed. After that, as the first stage, we'll
review our spending and compare it to our projections.

*One technique of computing account profit and loss is totally up all of your monthly revenue,
add up all of your monthly expenses, then subtract expenses from total income to find the
difference. The first step in dealing with it is to create an income statement to keep track of
profit and loss. This will show you your profits and losses in a clear manner, as well as point you
in the appropriate direction for cost-cutting.

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Blog Post

All viable and fixed business costs are captured, analyzed, and documented using cost
accounting. To put it another way, he needs to be involved in each department manager's
financial statement at BizOps in order to make a decision. This concept can assist you in
calculating product or process expenses so that you can accurately report the amount on a
company's financial statements. The major purpose of providing this information is to provide
exact information to accountants and to assist them in understanding how the budget was
created. The five types of accounts are as follows:

> Money created on a regular basis as a consequence of a transaction, an investment, or other

sources is referred to as income. Consider the case of a 20-hour-per-week BizOps employee. Is
the total revenue from service or product sales plus dividends and capital asset interest.

> The tangible and intangible value-owned goods of the corporation are referred to as assets.
For instance, the location of BizOps' facility or a well-known brand name in the industry are both
suitable examples.

> The phrase "liabilities" refers to the amount of money owed by the company to others (e.g.
mortgages, car loans). As part of its business activities, a firm must meet a legal financial burden
or obligation. BizOps, for example, may owe money to a variety of financial entities, including
banks and trusts.

> Expenses are the costs incurred or required during the product development process.

> The fraction of a company's total assets owned entirely by its shareholders or stockholders is
referred to as equity. Is a means of raising funds through the sale of stock. Assets = Equities, for
example, can be recast from the classic accounting equation Assets = Liabilities + Owner's
Equity.

Staff email:

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Recipient: New Staff Financial Management

Subject: Recipient: New Staff Financial Management

Good morning you all,

The goal of this email is to assist you understand the following topics, which are important to
us as legislation and requirements that we must consider.

The Australian Taxation Office has the following requirements for assessing revenue: If any
of the employees own a business, they can deduct the majority of their earnings. The whole
amount of assessable income is what we call it (or total income).

Take into account the following:

> Make sure the paper is intended to be a tax invoice.

> Mention the seller's name.
> As a reference, use the seller's Australian business number (ABN).
> The invoice's issue date.
> A brief description of the items for sale, including quantity and price (if appropriate).
> The amount of GST due (if any) — this can be shown separately or as a statement that
states "Total price includes GST" if the GST amount is exactly one-eleventh of the total cost.
> The percentage of each taxable sale on the invoice (i.e., the percentage of each sale that
includes GST).

GST collection, payment, and reconciliation: You can report and pay GST only once a year if
you like. This method can only be used if your company is GST registered. If you hold a GST
license and your annual income is less than $75,000 (or $150,000 for non-profits), you are
required to pay GST. If you qualify and have decided to report and pay GST every year, you
may not have to register or pay any GST throughout the year. Any residual money must be
reported and paid at the conclusion of the fiscal year. If you're still using the deferred GST
system, you'll have to stop. Here are a few things to consider:

1. You must first register for GST.

Then, if the sales are taxable (i.e., they are not exempt because they are GST-free or input-
taxed), include GST in the price of taxable sales.
2.Receive and issue tax invoices for company purchases and taxable sales.
3. Claim GST credits for GST paid on your company purchases.
4. Account for GST on a cash or non-cash basis, and set aside the GST earned for BIZOps to
pay to the ATO when the project is finished.
5. File activity reports or yearly returns with the Australian Taxation Office to reflect BIZOPs
sales and purchases, and pay or receive GST.

The following auditing and record-keeping standards must be met by financial records: For

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 tax purposes, you must preserve your documents in an accessible format (either written or
digital) for five years.

As a company, we must keep the following records:

Receipts and other evidence of all transactions and purchases made on your company's
behalf.
Invoices for taxes, as well as wage and compensation records.
Any and all GST-related documentation.
Any commercial assets, such as land, buildings, or office equipment, as well as the costs of
purchasing, selling, and maintaining them.
Maintain a complete record of all tax returns and activity statements.

Tax on a pay-as-you-go basis (PAYG): We have a responsibility as a corporation to assist

payees in meeting their end-of-year tax obligations. This is done by deducting PAYG
withholdings from payments made to our employees; other employees, such as contractors,
with whom you have formed voluntary agreements with companies that do not submit their
Australian business number (ABN); and payments made as part of a voluntary arrangement.
If you do not comply with the PAYG withholding requirements for a worker's salary, you will
not be entitled to a deduction. Sanctions, in addition to fines, may be imposed.

Thank you for your time and consideration!

Have a good day;

Management of financial resources.

Plan: Monitoring revenue and expenditure

Monitoring actions Responsible Priority Deadline Start End

Preparing budget variance reports

Prepare budget worsheets for
Financial
each department High 30. jul 1. jul 29. jul
manager

Assumptions and forecasts

Departmenta High
should be prepared 30. aug 15. aug 30. aug
l heads

Make a functional and

Departmenta High
auxiliary budget 14. sep 1. sep 14. sep
l heads

Collect all budgets from all

Budget High
departments 20. sep 15. sep 25. sep
committee

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Complete the Board Papers on Senior
High
time and budget managers/ 15. oct 25. sep 15. oct
CEO
Approval by the Board of
High
Directors CEO 30. oct 15. oct 30. oct

Proposal submission: Board of Directors

Up to 200 spending categories and 20 revenue categories will now be tracked by the financial
management technique. Department heads allege that it takes them a full working day to reply
to all of the errors in their monthly budget report. It also helps with activity organization by
requiring BizOps managers to explore the connections between their operations and
departments. As a result, I advocate for good budget and financial plan management, which
necessitates a thorough understanding of a variety of accounting principles, procedures, and
specifics.

Mock-up examples:
Minor expense variances:

Expense item Actual Budget Variance

Unexpected
$500 $250 100%
equipment repair

Major expense examples:

Expense item Actual Budget Variance

$3,388.32-
Casual Wages $3,811.68 3,600 5,88%

$39,530.4 -
Stock purchases $44,469.6 42,000 5,88%

Major sales revenue example:

Income item Actual Budget Variance

$39,530.4 - $44,469.6
Sales revenue 83,333 20%

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Executive briefing
Internal deadline meetings should be held on a regular basis, and materials should be ready to
deliver to the Budget Committee at least 14 days before the deadline. However, it would be
required to double-check and obtain assistance.
Budgeting issues
The department managers rarely have their
preliminary budget projections submitted to
the Budget Committee on time. Consequently,
the Budget Committee usually has to delay its
review of all of the subsidiary budgets by about
two weeks.
The two-week delay puts enormous pressure
on the finance department as the production of
the master budget overlaps with other
scheduled finance department tasks such as
GST activity reporting, payroll preparation and
asset register updates.
The finance staff feel that the budget cycle
should commence two weeks earlier, but if this
were implemented it would clash with the
stocktake period in the retail outlets.
The budget consolidation is performed
manually by entering information from hard
copy forms into a database. It would require a
major financial systems upgrade to provide
department managers with the ability to enter
this information directly. You do some research
and find that if the department managers
entered their forecast budget data into a
standard spreadsheet template, it would then
Greystone College Australia
Recommendations
Internal deadline meetings should be held on
a regular basis, and papers should be
available to send to the Budget Committee 14
days prior to the deadline. It would, however,
be necessary to double-check and seek
support.
Employees who work on multiple projects
should not be overworked and should adhere
to each job's deadlines. To give those who
are more vital a higher priority. Holding a
brainstorming session or meeting where
departments can analyze probable scenarios
and devise solutions to avoid them is another
way to avoid delays and one activity
interfering with another. Finally, the essential
idea is to create a shared schedule before
deciding on a certain day.
It is vital to maintain information on the
cloud up to date and to have a workflow
strategy in place to avoid such conflicts.
Another option is to allow extended periods
of time, but no more than one week.
Organizations should aim to make the most
efficient decisions possible, but this can only
be done if each change is properly evaluated
with other departments before being
implemented.
If the system is improved and changed,
workers will be able to complete jobs on time
and accurately. More temporary consultants
may be employed to advise and train
personnel if this isn't enough. The main
purpose is to teach employees how to keep
the process running smoothly. Furthermore,
going cashless and allowing for the smooth
operation of additional payment terminals is
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be relatively simple to export data from this crucial. Time is tied to money resources in
format into the financial system for budget this case.
consolidation. This approach would require
resources for setting up the spreadsheet
templates and training department managers in
using the spreadsheet templates.

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Revised Budgeting and Financial Planning Procedures
The BizOps budget plan helps the organization and its divisions manage operations, stock levels,
mitigation strategies, GST and plan requirements, and more. Spending, variations, budget
comparisons, and growth and reductions are all shown in financial statements. Show the
suggestions and their ramifications if there have been any modifications. The forecast forecasts
the amount of money that will be received, whereas the budget forecasts the amount of money
that will be received. To begin with, conditions change throughout the year, and the
organization must be able to respond to these shifts and comprehend their commercial
ramifications. Using historical data to make predictions can lead to more proactive and
successful actions. Budgeting and forecasting in a variety of ways would allow for improved
accuracy and company success. Using spreadsheet templates to collect data for budget
estimations is one of the most critical adjustments to make.

It's also worth considering developing a budget committee to whom a large percentage of the
above-mentioned responsibilities would be delegated. The design and updating of policies and
budget guides assists in the administration of the plan and provides direction on how to make
various predictions; also, if the firm takes risks, it must choose the option with the best return.

Make educated estimations and estimates. Budget for the costs that you have the most
influence over. This appears to be a situation where a variety of forecasts would be beneficial.
Determine which costs BizOps should eliminate if the firm is failing and which costs it should
invest in if it is prospering. This operation would be overseen by Mike Booth, Managing Director
of Financial Operations.

Regularly assessing and evaluating these procedures is an important element of the process.
Periodic reports from the budget committee may be provided to track how the implemented
modifications are affecting the company's budget dynamics.

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