Identify an area of business and explain how you could use different forms of current and present financial data to ascertain whether the department made a profit or a loss.

You do not have to use actual figures from your business.

It can be seen that in any business, there are about different areas that are responsible for its growth. These areas include finance, marketing, sales, accounting, production, human resources, and other management operations. All of these departments are playing an important role in any business.  The organization is able to use the income and business statement from any of these areas. Through this, the organization is able to predict its profit and loss in a comprehensive way. Moreover, the business is able to use its cash flow statements to get information on how they can easily manage their cash. This statement is also giving information about how much cash the company has a loss and how much they get after one year. Through the help of this formula, the company is able to calculate its net profit on its business.

There are some documents through which the company is able to use it for its profit and loss statement that includes balance sheet, cash flow statement and the personnel plan of the company.

Question 2

Using your answer from the previous activity, explain how you would undertake research to review the reasons for the profit or loss

 There are many ways that will help any business to review the main reasons for their profit and loss. This can be done to carry out the main research and gain information about the different reasons for profit and loss. This can be done through the auditing of the whole company. If I take an audit of the system and then examine all hard files of the business, then it will be quite easy to evaluate the main reason behind profit and loss. This will help the business to find out the instances of errors. Moreover, I am able to take a survey of the staff members and gain information about the progress of the company. Through this information, I am able to evaluate the performance and the revenue they have collected throughout the year. Moreover, through this information, I am able to find out the main reason behind the profit and loss.

Question 3

Using your business plan, identify your business’ critical dates in terms of income and resource use and generation.

There are many important points and components of the business plan. These components are included a description of the business, their market analysis and their sale strategies for their financial projects. Moreover, for any business in the world, the critical dates are playing an extremely important role. Through these dates, any business is able to manage their progress and also examine it in a proper way. Furthermore, the company is also able to maintain their progress and also increase their income. For any business, the financial year is started from the first of July. According to our business plan, there are some of the critical dates that are given below

30 October

The company has to collect funds for the future development

30 October

The last date for changing the installment report and other payment options

25 November

Submission of the annual report

30 November

The last date for changing the payment options for products and services

1^st December

It’s a due date for gaining the trust income from different areas

30 April

Last date for the fringe benefits tax

30 June

Last date for the financial year

Question 4

Explain how and why you would analyze your business’ cash flow trends

There are many ways through which I am able to analyze the cash flow trends in a proper way. The cash flow trend can be analyzed easily. The best advantage is that through these cash flow trends, I am able to calculate the financial performance of the business. It can be noted that there are different financial ratios that use cash flow for measuring the business. Also, through this, the company is able to maintain its progress for the future and achieve their future goals.

Moreover, all of these ratios are used by different investors and lenders for determining the financial condition of the company in a proper way. Furthermore, if I wanted to forecast the future of the company, then it can be done through these trends.

Now the main issue is how these cash flow trends are used for the analysis of the business. This analysis is started by analyzing the cash flow of the company, and this can be done by establishing the cash flow balance at the start of the financial year. Then after this, just check the cash flow statement balance at the end of every month. This will give you sound information about the positive and negative cash flow of your business.

Question 5

Which taxes are applied to your business? Explain each one, including the rates and geographical variations, if applicable. 

 The main tax on any company is set by the Australian company. As it can be seen that my company is an Australian resident company. Due to this, the tax is applied by the government of this country. There are different types of taxes some of them are given below

Good and service tax

It can be noted that it is a national and board based tax that is put on the different goods and services that are consumed in that country. For that case, many businesses must have to register themselves from the Australian Taxation Office for their GST. For that business that has to pay for their supplies, so their tax equals to the input tax credit. There are also some other businesses in Australia that are not under the territory of government taxes. The reason is that they may include some items like fringe benefit tax and also land tax.

Question 6

In reference to your current financial management software, give all of the pros and cons you can think of. Summarise whether you think the software is suitable for both your current needs and future needs.

There are various ways to control the finance of business but a strong and wise management manage all the finance and control of the business in an efficient way so they could use the resources in proper way to get maximum output in the business. These method gives you a perfect view of the cash flow of business with other different methodologies which are helpful to control the business finance. There may be different accounting software which are used to control and manage the business. In small scale organization, there are using Xero software which could manage the invoicing, bank reconciliation and all the financial management in the activities of the business.

Pros of the software:

Any business organization while working on some projects needs to be implementation of the policies in a way that it could help the business to get maximum output in minimum input and the effort of the staff could not be wasted in managing the resources in proper way. There are some advantages which are related to the usage of software in the business:

a)      Effortless setup:

Financial management software are used to save the time duration spent on the work of the project while performing the financial operation of the business. When data is summarized in a software it just required single click to find out the required data. This make the task easy and time saving.

b)      Understandable transection

The financial management software is helpful in making the transection easy and understandable as it could be easily edit the files and paste the templates in the required documents.

c)      Reliable security

The application software is designed to make the information more secure with usage of two factor authentication which reduce the risk factor in the project. For every transection, there is an attached format which shows the information about the specific transection about the user, date and time of the transection record. This software could be helpful in many other tasks which are conducted on daily basis such as:

·         To control sale process

·         To maintain purchase orders

·         To draft the invoices of sales

·         To record the payments and receipts of the business

d)      Relatively mobile app

Financial management software is easy to use in the SME accounting in many integration which is used in the daily task of the business. The service of the software is completed to give the trainings to new user in the organization.

Cons of using software

As there are some pros of using financial software, there is also some drawbacks which could be faced by the organization while using that software.

a)      Lack of customer service

With the usage of software there is no use of customer service support number to contact the customers. There may be missing factor of the IOS app which could be used for this purpose.

b)      Expensive

The usage of the software is expensive as it required some operating functions which could increase the cost of the project therefore its use could be considered as expensive.

c)      Compliance regulations

The software or any other tools or method used in the business required that business should follow the compliances and regulations related to the task should be according to the compliances of the regulations.

After the analysis of the advantages and disadvantages of the usage of the financial software in the business it is concluded that the businesses are working in the new era where technology is used to manage the tasks of the business with technology there it should be used in the business projects to get the ultimate results.

Question 7

Give an example of how you could use previous financial data to determine the allocation of resources. Explain the figures and how you would allocate resources accordingly.

Past information of the company is used to take help about the division of resources among different activities of the business. These resources are distributed among the different activities of the business such as:

·         Planning of projects

·         Selling and distribution process

·         Investing in the new projects

The company will able to predict the expense in the future production with these allocations. Whenever the budgeted expenses are allocated on perfect place it will be easy and reliable for the organization to get the expected results from this project.

Question 8

Identify a new item you could add to the budget in your business. Estimate the costs of the new item and how it would be included within the budget. You need to estimate both upfront and ongoing costs.

The budget of the business plan shows that how could be budget is handled with the increase in salary by the HR department which could be included initial cost financial cost and repair and maintenance cost of the business. The new items which are acquired by the business is repair coast which could be $600,000 per annum. This cost will be added in the new budget as estimated upfront cost.

Question 9

Give an overview of the organizational policies and requirements you need to adhere to when you are preparing budgets.

To prepare the budget for any business plan, the organization required to determine the provided finance in different business activities in which a business is required to maintain the budget for that specific project which shows the impact on the growth of the business. Followings are the organizational requirements:

·         Financial analysis assessment

·         Financial management manuals

·         Policies and guidelines for the legal requirements

·         Occupational safety measures and procedures  

·         Price and exchange parameters

·         Procedural measures and quality control

·         Internal control process

·         Reporting requirements

·         Analysis of standard techniques

There may be further requirements which are required to fulfill by the organization to deal with policies and procedure in the business. These could be includes:

·         Delegations of authorities

·         Limits prescribed on volumes and types of financial transactions

·         Reporting and timing about the duty, excise and other overseas government fee

·         Reporting periods prescribed

·         Taxation and payment timings fixed by the government

All these policies and procedures are compulsory to keep in mind while making the budget for any business entity to allocate the finance in perfect place to get the maximum output from business. The above discussed policies and requirements are used to make sure that the output should follow the requirements of quality assurance by following all the policies and procedures. Furthermore these policies could be helpful in smooth working of human resource department to dealing with the staff.

Question 10

You have just been taken on in the financial management department of your organisation. You have been told that over the next financial year you need to:

Financial management is planned with the review of the financial data which could be helpful in the in the preparation of the budgets and allocation of the resources which is required to spend on specific project. The previous data could be analysed with revising the new data to compare with the data estimated and allocated which shows that either the project is in profit or in loss.

With the analysis of the data given in the budget, there are some issues which could be discussed such as increasing cost and difficult to manage the financial system of the company. Therefore the company should implement the plan with cost effective plans subch as allocation of resources accordance to implement in the project.