FNSBKPG403A: Establish and maintain an accrual accounting system

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Description

This unit describes the performance outcomes, skills and knowledge required to establish
and maintain a bookkeeping system on an accrual basis. Various aspects of the Tax Act,
Goods and Services Tax (GST) Rulings and other legislation apply to this unit at the time of
endorsement.

Employability Skills

This unit contains employability skills.

Application Of Unit

This unit applies to individuals who are responsible for providing contract bookkeeping
services, and bookkeepers working directly for organisations and small business owners.
These individuals may be carrying out bookkeeping activities across all industries.

This unit requires the application of skills and knowledge to reconcile and monitor an
accrual accounting system. The unit encompasses setting up accounting systems;
establishing debtors and creditors, bad debt and contra entries; reconciliations; reviewing
compliance terms and conditions; planning a recovery action and preparing reports; and
filing of documentation. This unit also relates to carrying out activities on a continuing
basis.

Where the activities are being carried out by a contract bookkeeper, policies and
procedures relate to the guidelines provided by the organisation for whom the bookkeeper
is carrying out the activities.

This unit should only be undertaken after competence is achieved in FNSBKPG402A Establish
and maintain a cash accounting system. Some of the work covered in this unit is undertaken
with supervision from tax agents.

Unit Sector
Financial Services- Bookkeeping

Performance criteria
Element Performance criteria

1.1
Chart of accounts is adjusted to incorporate and
Manage the establish debtors and creditors as new debtors and
1. chart of creditors arise
accounts
1.2
Debtors and creditors subsidiary ledgers are established
as required

Process invoices, 2.1

adjustment Invoices to debtors are raised and invoices to creditors
2. notes and other are allocated
general ledger
transactions 2.2
Source documents are coded and processed

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 2.3
Payments from debtors are received, processed and
banked in accordance with organisational policies and
procedures
2.4
Payments to creditors are made and processed in
accordance with organisational policies and procedures
2.5
Adjustments are raised and allocated to correct
invoices
2.6
Credit notes are raised for adjustments to invoices
2.7
Other transactions are entered into the general ledger

3.1
Relevant persons are contacted and liaised with to
verify contra deals
3.2
Manage contra Reporting procedures and documentation for contra
3.
entries entries are completed in accordance with
organisational policies and procedures
3.3
Contra entries are processed to update debtors,
creditors and general ledgers

4.1
Bad debt status is verified through liaison with relevant
persons and following attempts to work with debtors to
clear debts
Identify and 4.2
4. process bad Reporting procedures and appropriate documentation
debts are completed in accordance with organisational
policies and procedures
4.3
Bad debts are processed to update debtors and general
ledgers

5.1
Activities and communication with debtors are
reviewed in conjunction with relevant persons , if
applicable, to establish adequacy of follow-up
Manage debt
5.
recovery 5.2
Measures to collect monies, including the initiation of
legal action and the seeking of expert advice, are
undertaken in accordance with organisational policies
and procedures
Prepare and 6.1
6. produce reports Reports are produced and transactions in report are
and trial balance validated

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 6.2
Debtors and creditors are reconciled and relevant
reports are produced
6.3
Any necessary corrections are made
6.4
Trial balance is produced
6.5
Reports are presented and explained where necessary
to relevant persons

Skills and Knowledge

Required skills:

The following skills must be assessed as part of this unit:

 ability to use relevant accounting software where applicable - this may include
adjusted software or equipment for use by people with disabilities
 written and oral communication skills necessary to complete entity's documentation
and work with debtors to clear debts if possible

 literacy skills sufficient to complete relevant documentation

 interpersonal skills particularly in relation to dealing with debtors in an empathetic

manner

 problem solving skills to identify relevant data and to determine necessary courses
of action in relation to debt recovery

 numerical skills to code and reconcile data

 ability to pay attention to detail to ensure accurate numerical work

 reporting skills

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Required knowledge:

The following knowledge must be assessed as part of this unit:

 relevant organisational policies, procedures and guidelines related to the

processing of transactions and records
 relevant statutory, legislative and regulatory requirements specifically with relation
to ensuring that all bookkeeping activities undertaken meet requirements related
to Activity Statements

 relevant industry codes of practice

 systems knowledge where computerised equipment is being used

 awareness of legal systems and procedures in relation to debt recovery and

necessary preliminary steps, timing and acceptable avenues of recovering debts

 difference between cash and accrual accounting

 underlying concepts of double entry accounting

Range statement

The range statement relates to the unit of competency as a whole. It allows for different
work environments and situations that may affect performance. Bold italicised wording, if
used in the performance criteria, is detailed below.

Essential operating conditions that may be present with training and assessment (depending

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on the work situation, needs of the candidate, accessibility of the item, and local industry
and regional contexts) may also be included.

 computer system documentation

 internal control guidelines

 legal obligations

 operations manuals

 organisational policies and procedures including:

 working with others

Organisational policies
and procedures may
 participating in ongoing learning
include:

 monitoring and evaluating own performance

 managing own time and priorities

 applying goals and visions

 suspension of credit facilities

 trading terms and credit limits

 assets

 capital

 interest

Other transactions may  loans

include:
 one-off purchases

 private usage

 taxes
 accountants

 debtors
Relevant persons may
include, but are not  directors
limited to:
 managers

 owners

 staff members

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Evidence guide

The evidence guide provides advice on assessment and must be read in conjunction with
the performance criteria, required skills and knowledge, range statement and the
Assessment Guidelines for the Training Package.

Evidence of the following is essential:

 knowledge of relevant legislation

 ability to review accounts receivable and payable
processes

Critical aspects for

 ability to identify bad and doubtful debts
assessment and
evidence required to
demonstrate  ability to deal with debtors in an empathetic manner
competency in this unit
 ability to review compliance with terms and conditions

 ability to plan recovery actions in accordance with

legal requirements

 ability to produce trial balance.

Context of and specific Assessment must ensure:
resources for
assessment  access to a range of relevant and current industry
information materials.
Method of assessment The following assessment methods are appropriate for this
unit:

 role plays related to dealing with debtors and

undertaking team work to locate and manage data
 demonstration of the activities in a simulated
environment or on the job, including production of trial
balance and debt recovery

 oral and/or written questioning of knowledge and skills

 people with disabilities may use assistive technologies

to demonstrate interview skills and /or receive and
respond to oral and or written questioning.

Holistic assessment with other units relevant to the industry

sector, workplace and job role is recommended, for example:

 FNSACCT405B Prepare financial statements

 FNSBKPG401A Develop and implement policies and
practices relevant to bookkeeping activities

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  FNSBKPG402A Establish and maintain a cash accounting
system

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