Ronaldo Financial Management 2 Assessment 1

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Maseno University *

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Management

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Nov 24, 2024

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Assessment 1 Part A – Case Study/Practical Your Task 1. Use the internet to RESEARCH and discuss the importance of workplace review and evaluation in the context of monitoring financial plans. Include in your report how work health and safety programs within an organisation can have affect on the financial performance of an organisation. A good financial plan is important as it’s the basis for putting ones financial sphere in order. When one has a financial plan, they are at a better position to tackle their goals and objectives as they understand what it takes to achieve them. Financial plan assist one in prioritizing competing financial needs in their life. It also depicts how financial goals are intertwined in that saving for your kids’ education may impact your ability to save for a home investment. One can use the information gathered to make concise decisions on how to implement specific strategies, select right products or services and prioritize one’s goals. Defining and implementing a good financial plan involves working with financial professionals to: identifying and prioritizing financial goals and set timeline for achieving them, select suitable products and services that are suited to meet one’s financial goals, develop strategies that will address one’s current financial weaknesses while boosting on the strengths, monitor and review one’s plan to align with financial goals, time frames and objectives as circumstances change, and establish a clear view of one’s current financial situation by reviewing one’s assets, income vehicles, liabilities and investment portfolio. In an organization, financial planning is important is directing funds towards the priority areas of focus. There is staff performance evaluation which depicts how objectives have been achieved and aligned with financial measures; it clarifies the roles and responsibilities of every staff in the team. There is also supposed to be a highly effective management system that enables managers in a company to measure staff performance and enhance productivity by aligning individual employee's day-to-day actions with strategic business objectives, establishing focus for skill development and learning activity choices and Setting and communicating clear performance expectations. Work place healthy and safety (WHS) for employees in an organization is an important aspect of business that should be evaluated and given a lot of consideration as it may have impacts on the finances of the business. Training, preventive and protective

equipment such as aprons, gumboots, gloves and facemasks should be provided to staffs so as to prevent accidents and injuries which will force the company to pay for medical bills and any other damage done to an employee. The benefits of prioritizing WHS in a business include: Reduced asset damage due to accidents, improved brand image of the organization and less interruption from legal entities. 2.DISCUSS how you would analyse the effectiveness of financial monitoring and planning. Every company or organization has a financial data management system that is usually used to compile financial reports using software tools that generate and balance ledgers thus maintaining compliance with accounting rules and regulations that enables auditing to be done in an effective manner. As a manager, it is important for you to consider the following when analyzing most financial data management system: ensure it has been targeted to meet the needs of the user, look at it in the wider context of industry, consider the political and social environment and any trends that have been occurring over the last few financial periods, and ensure the base information was good to start with, otherwise it could result in what is commonly known as Garbage In Garbage Out (GIGO). A business entity can use a number of techniques for financial analysis. They range from simple techniques, such as studying the financial statements, and forming a rough opinion of what is happening to detailed and expensive statistical techniques Some of the financial techniques for analyzing financial data used are:  Variance analysis- this involves analysis examining the variance in respect of several attributes, its origin and cause, the person responsible and its significance.  Trend analysis is normally used when there are at least two periods or a few years of information available.  cost volume profit analysis  ratio analysis In every business organization, there should be a centralized system where financial data is stored and retrieved when need be for safety purposes. It allows the person in change to trace financial transactions including double entry system, which in turn allows the company to easily comply with tax rules and regulations. 3. OUTLINE how you would monitor such improvements that are made in the monitoring of procedures. The following stages can be used to monitor process improvements: a. Monitor speech analytics and text analytics from your clients in order to see whether the goals and objectives of the company or business align with the needs of customers.

b. Conduct surveys to get customer feedback through emails and online social media platforms once they use the business services or products. c. Utilize quality monitoring to assist staff improve on skills, including customer engagements and financial record keeping skills. d. Measure results and track continuous feedback mechanism so as to monitor and evaluate progress. Monitoring process improvements built a strong foundation to enable a business to expand to other levels. The monitoring and managing of performance and service quality, management of financial recording are usually for the purpose of identifying financial management system that compare actual expenditures against a planned budget, ensure all expenses and income are reported completely, ensure there is enough cash for day to day operations of the business , provide the management and other stakeholders with financial information where need requires, establish financial risk and have a plan to deal with them and record financial transactions throughout the year. Managers are tasked with the responsibility of utilizing financial resources prudently in an organization as most of the activities and functions are pegged on the money resource. They therefore need to know how much is spend on what. This is the reason why every organization must install and manage a financial accounting system that is automated for easier auditing and the small businesses can have a manual one, for example book keeping which will be updated regularly. There should be strategies to conduct monitoring and evaluation periodically so as to easily rectify any anomaly that arises before it has a great negative impact on the financial position of the organization. The focus areas of any financial management system should include:  Procedures that are in place to make sure those payments are made on agreed terms.  Procedures for handling cash, cheque and credit sales  Procedures for checking goods delivered against goods ordered and  Procedure for compensating customers for damaged goods or goods returned. 4. VISIT some internet search sites and research and provide information on: a. Bilateral or regional trade agreements Regional trade agreements (RTAs) are trade agreements between two countries done to eliminate tariffs and other trade barriers. They are mostly done by World Trade Organization member states (WTO) and updated on the RTA database. RTAs removes unnecessary restrictions to conduct trade between WTO members and Non- discrimination among trade partners is one of the core principles of the WTO. RTAs are authorized under the WTO, subject to a set of rules that recognize the need for transparency and increase understanding of RTA’s impact on WTO members’ interests and wellbeing in trade. What all RTAs in the WTO have in common is that they are reciprocal preferential Trade agreements between two or more partners.

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b. International Commercial Terms (INCOTERMS) International commercial terms or Incoterms were introduced in 1936 and are a series of sales terms that are used by businesses to make international trade easier. The Incoterms have been updated six times to highlight the developments in international trade and are used by businesses both large and small. c. Competition and Consumer Act (2010) The Competition and Consumer Act 2010 (CCA) is a legislation act for competition law in Australia which seeks to promote fair trade competition while protecting consumer rights. Therefore the Australian Federal Court has the mandate to determine public and private complaints in relation to contraventions of the Act. It is usually administered by the Australian Competition and Consumer Commission (ACCA). The Competition and Consumer Act (CCA) is an act of the Parliament of Australia and so its application is limited by section 51 of the Australian Constitution , which Stipulates the division of roles and powers between the state parliaments and the federal government. a. Warsaw Convention An international agreement that was signed in 1929 in Warsaw to establish the limiting liabilities and responsibilities of air transports for passengers, luggage and goods. It sets out the rules for how persons and goods, including documentation and tickets are conducted for air transport and it’s a major development of international air transport. It is being regulated by the international Civil Aviation Organization (ICAO). e. World Trade Organization determinations . The World Trade Organization (WTO) provides a platform for negotiating trade agreements between member states that are geared towards reducing trade tariffs and other barriers to international trade hence ensuring a fair level playing field for all parties. The goal of WTO agreements is to enable manufacturers of goods and services, importers, exporters to conduct their businesses with ease. It is the only global international organization that deals with trade regulations between countries. WTO agreements consists of 16 different multilateral trade agreements to which all member countries are parties and 2 different plurilateral agreements where only some members of the WTO are parties. 5. OUTLINE the requirements of the Australian Tax Office, including Goods and Services Tax, Company Tax, PAYG. Include in your answer areas such as:

a. Internal control procedures an organization would need to have Goods and services tax (GST) is a baseline tax of 10% on most goods, and services Consumed or offered in Australia. All enterprises registered for QST will claim credits for GST included in the price of products they purchase for their businesses and also include GST in the price they charge for their services or products. A company that has a GST turnover of $75,000 or more will need to register for GST, issue tax invoices for taxable sales and obtain tax invoices for business purchases, account for GST on either a cash or non-cash basis and put aside the GST collected to pay it later when its due, and lodge activity statements or annual returns and pay GST or receive a GST refund. . b. Reporting periods for GST, Company Tax and PAYG GST amounts are reported and paid to Australian tax Office same as claiming GST credits through lodging an annual GST return or Business activity statement (BAS). The business activity statement is issued at about two weeks before the end of reporting period which is usually after every three months. The statement can be sent via email. For the Annual reports for PAYG, it should be done at the end of every financial year and the report must include: all payments made to payees during the financial year and the amounts withheld from those payments. For the annual reports of a Company: A company is regarded as a legal entity with higher administration costs and set up procedures it is usually run by directors and owned by its shareholders. Companies are regulated by the Australian Securities & Investments Commission (ASIC). In this regard the company: must register for GST if its annual GST turnover is $75,000 or more, lodge an annual company tax return, apply for a tax file number (TFN) and use it when lodging its annual tax return, pay its income tax by installments through the Pay As You Go (PAYG) installments system and pay superannuation guarantee contributions for any eligible employees.

c. Outline the statutory forms that organisations are required to utilize when reporting their tax commitments. They include the following: tax return for individuals 2016, tax file number (TFN), PAYG payment summaries, PAYG withholding variation application, applying for HECS-HELP benefit, Superannuation standard choice form, TFN declaration, and individual tax returns instructions 2016. 6. OUTLINE the guidelines for businesses operating in Australia in regards to reporting of duty, excise and other overseas government charges. Excise duty is a product- based tax on goods that are alcoholic, tobacco, fuel or petroleum products in nature. It is also referred to as customs duty when it is related to importation of the same nature of goods. In order to report excise duty and pay, one has to calculate the excise liability, lodge a return and pay duty either as a periodic settlement basis or prepayment basis. Periodic settlement permission (PSP) allows a business to deliver excisable commodities into the Australian domestic market for a specified period and to defer lodging excise return and payment up to a specified date. The business needs to periodically, that is weekly, lodge an excise return during the settlement period and pay excise duty on those commodities. If a company is eligible for the small business entity concessions, they can apply to defer weekly settlement to a monthly reporting cycle which is done by the 21 st day of the month following the delivery of products into the Australian domestic market. For the prepayment, the entrepreneur has to first lodge an excise return and prepays excise duty before delivery of excisable goods into the Australian domestic market. After the Australian Tax Office receives the payments, they will approve the return and issue a delivery authority to allow the business person to move the goods and deliver them for domestic use. Where one does not have an excise license and has to pay for excise duty, they will first complete registration for excise payments.

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7. DESCRIBE the discrepancies in business transactions that would not be acceptable and what processes can an organization have to avoid discrepancies in their business transactions. There are various discrepancies in finances that may not be easily detected during analysis of budget. They include:  A push to make a financial decision related to a particular client. When an employee is circumventing protocols and controls in relation to a financial transaction with a particular customer, be alert as that may lead to fraud. Usually undertake additional verification processes to ascertain that it is within the business laws. Practice professional skepticism by validating the financial information beyond a mere analysis of financial ratios and trends and to identify fraud, misrepresentations, and error.  An employee who is in a senior position, works for long hours and does not take leave is also a red flag as they can commit a fraud and cover it up. A fraud is associated with greed and a low expectation of being caught. An organization can use the following measures to avoid discrepancies in the business:  Conduct corroboration of documentation such as verify revenue, review historical budgets and the actual results. If there is a big difference, embark on a validation exercise to justify the results for example, establish whether a new product line was included, were there change in business or changes in budget format or processes.  Forensic accounting approach is usually used in business to investigate potential problem areas, and falsified financial statements. When carrying out investigations of fraud, be sure to document the results of investigation, and quantify the loss of the company and the benefits to the accused employee or individual, which will help in compensation terms. Part B – Case Study/Practical 1. Prepare you cash sales income for each month (taking into consideration your accounts receivable information). Note: Done in Excel.

2. a. Calculate variance ($) & (%) for each period as requested (5 x Financial Reports contained in the assessment). Note: Done in excel. b. Complete each cashflow opening balance, receipts, payments & closing balance for each actual month. NOTE: Done in excel. 3.Highlight three “unfavourable” variants and provide recommendations. From the table in Q2, it depicts that the actual cost for the 1st and 2nd quarter Of the total income of the business was more than its budget which showed The negative values of over budget about $-3,000 and $-13,700, respectively. Therefore, the amount of each quarter was unfavorable variance. From the table in Q2, it highlight that the actual cost for the 1st and 2nd quarter Of the total expense of the business was more than its budget which is shown on The negative over budget of $-107 and $-1,789, respectively. Therefore, the Amount of each quarter was unfavorable variance. From the table in Q2, it demonstrates that the actual cost for the 1st and 2nd quarter Of the net income of the business was more than its budget which is shown on the Negative over budget of $-2,893 and -11,911, respectively. Therefore, the Amount of each quarter was unfavorable variance. 4. Notate your recommendations to PMC on actual sales and expenditure for the following months: a. July:  expect many invoices in July because of the many numbers of leads Decrease licenses and permits to 690

Decrease expensed equipment to 440 Decrease postage and delivery to 20 Reduce the motor expense to 8700 All motor vehicle registration and insurance are due in July, 18,000. b. August  decrease printing and reproduction to 300 Reduce postage and delivery to 50 Reduce motor expenses to 2500 Reduce the telephone expense to 200 Increase in sales to 44500 15th August moving to new premises whereby rent will go up to 3,500 Per month c. September  there will be upgrade of all computers under expensed equipment at 1200 thus increasing productivity. Sales will decrease to 42000 Motor expense reduced to 2900 d. October sales decrease to 49000 Increase on book and publications expense to 50 Software expense increase to 100 Increase on utilities expense to 300 Lost clientele thus have sought an aggressive advertising campaign 16,000 Because of the advertising campaign, two new consultants will be recruited in October by PMC. This will and 30% to November and December’s payroll. Also $10,000 in recruitment and training during October. It will further lead to increase in business in November and December by 40%. e November  Reduction on sales to 45000 3 staffs are on leave thus will have a 50% impact on sales. 5. Complete a new budget based on your recommendations . Done in Excel

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Ronaldo Financial Management 2 Assessment 1

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