Student Name: Mac Guiver Castro Sánchez

Student ID: VTI18197

BSBFIM601 Manage Finances

ASSESSMENT BSBFIM601 Manage Finances

Student Name: Mac Guiver Castro Sánchez

Student ID: VTI18197
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Task 1

1. Identify and describe financial probity and requirements for businesses.

Probity decisions should be:
Helpful: Probity should be used to facilitate discussion of current approaches to
market with suppliers in order to promote genuine engagement,
Inclusive: Probity processes should be designed to enable innovative
approaches to be adopted if required.
Tailored: Probity roles can be tailored to the business need and range from
using internal expertise through to engaging external specialist advice.
Sensible: Each individual process may require a different approach; one size
will not fit all.
https://www.finance.gov.au/procurement/procurement-policy-and-
guidance/buying/accountability-and-transparency/ethics-and-probity/principles.html

2. Provide four examples of what would be consider fraudulent behaviour in

regard to company finances.
Personal purchases. An employee can divert funds to buy goods or services on
his own behalf. This is usually done by approving his own expense reports or
supplier invoices. The person must hold a sufficiently senior position to be able
to browbeat other employees into participating in this diversion of assets. Ghost
employees. The payroll staff can create fake employees and then pay these
"ghost employees," directing the funds into their own bank accounts. Weak
controls over the payment of employees makes this type of fraud more likely.
Skimming. Incoming funds are intercepted before they can be recorded in a
company's accounting records. This is usually caused when a person is allowed
to both open the mail and record accounting transactions.
Tax avoidance. A company can alter its tax returns to reveal less taxable
corporate income than is really the case, resulting in lower tax remittances. This
can only be done with the connivance of senior management, which typically
signs off on the tax returns.
https://www.accountingtools.com/articles/examples-of-corporate-fraud.html

3. Identify the requirements for audited accounts and the purpose of an

audit report.
An audit report is a written opinion of an auditor regarding an
entity's financial statements. The report is written in a standard format, as
mandated by generally accepted auditing standards (GAAS). GAAS requires
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
or allows certain variations in the report, depending upon the circumstances
of the audit work in which the auditor engages.
The purpose of an audit is to obtain an independent opinion on the financial
statements of a business or Grow Management Consultant.
Specifically, auditors establish whether the financial statements are fairly
presented and in accordance with generally accepted accounting principles.
The following report variations may be used:
 A clean opinion, if the financial statements are a fair representation of
an entity's financial position.
 A qualified opinion, if there were any scope limitations that were
imposed upon the auditor's work.
 An adverse opinion, if the financial statements were materially
misstated.
 A disclaimer of opinion, which can be triggered by several situations.
For example, the auditor may not be independent, or there is a  going
concern issue with the auditee.

4. Describe the principle of cash accounting one advantage and one

disadvantage of cash accounting.
Cash accounting is an accounting method where receipts are recorded during
the period they are received, and expenses are recorded in the period in which
they are actually paid. Cash accounting is one of the two forms of accounting.
Advantage: For companies that do a great deal of cash business and do not
maintain large inventories, cash accounting is a convenient and reliable way of
tracking expenses and profits without necessitating a great deal of
bookkeeping. 
Disadvantage: Because cash accounting is so simple, it does not allow for
tracking the actual dates of sales and purchases. Additionally, it usually does
not provide a means of matching these transactions to specific items of
inventory. There are no accounts receivable or accounts payable records; this
can create difficulties for businesses that do not receive payment for goods
immediately, or have outstanding bills that have yet to be paid. Additionally,
since partial payments are not recorded as such in a cash accounting system,
the cash accounting balance sheet may not reflect all monies due. If meticulous
records are not kept of these outstanding balances due or owing, then
companies may not receive or make payments in a timely fashion, if at all. 

5. Describe the principle of accrual accounting and one advantage and one
disadvantage of accrual accounting.
The accrual principle is the concept that you should record accounting
transactions in the period in which they actually occur, rather than the period
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
in which the cash flows related to them occur. The accrual principle is a
fundamental requirement of all accounting frameworks, such as Generally
Accepted Accounting Principles and International Financial Reporting
Standards.
Advantage: Corporations are required to use accrual
accounting under generally accepted accounting principles.
Disadvantage: Small businesses often use cash accounting because it is
simpler and more straightforward, and it provides a clear picture of how much
money the business actually has on hand.

6. Explain the four main taxation and superannuation obligations for a

business. Briefly discuss each obligation.
The following four taxations are the most common:
 Australian business number (ABN): Consider getting an ABN for Grow
Management Consultant’s business. An ABN helps to manage Grow
Management Consultant’s tax and business obligations and is used as a
reference by the Australian Taxation Office (ATO) for Grow Management
Consultant’s business. You will also use Grow Management Consultant’s
ABN when dealing with other businesses and government departments.
 Goods and services tax (GST): GST is a broad-based tax of 10%
imposed on most goods, services and other items sold in Australia.
Depending on Grow Management Consultant’s turnover or service, you
may need to register for GST.
 Pay as you go (PAYG): PAYG is a system that allows you to pay an
expected tax liability in instalments. The ATO will notify you of Grow
Management Consultant’s PAYG obligations.
 Tax obligations for paying staff: As an employer, you must be aware of
Grow Management Consultant’s tax obligations when paying staff,
including pay as you go, withholding tax and superannuation. Depending
on the size of Grow Management Consultant’s business, you may also
need to pay payroll tax.

7. Identify the act that details requirements for financial reporting and
auditing and, explain requirements for companies for preparing and
lodging reports under this act.
According with Australians securities & investment commission, the financial
reporting and auditing requirements under the Corporations Act 2001
(Corporations Act).
A company (other than a small proprietary company), registered scheme
(managed investment scheme) or disclosing entity (a body that holds enhanced
disclosure securities) must have its annual financial report audited.
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Medium-sized charities with annual revenue of more than $250,000 must have
their financial statements reviewed or audited, while Grow Management
Consultants that fall under the Incorporated Association Act and large charities
with annual revenue of more than $1 million must have their financial reports
audited.
An audit may be required in certain industries due to regulation – for example,
for manufacturers supplying products to the government.

8. Explain the requirements for registered foreign companies regarding

preparing and lodging financial reports.
The Corporations Act 2001 (Section 601CK)
A small proprietary company that is controlled by a foreign company, which is
not a disclosing entity, must comply with certain financial reporting and audit
reporting requirements, as set out in the following:

Requirements: You are not required to appoint auditors or prepare or lodge

financial reports if the directors resolve to rely on the relief provided by ASIC
Corporations (Foreign-Controlled Company Reports) instrument 2017/204 and
lodge notice of that resolution within the time requirements under that
instrument.
The directors must resolve to rely on the relief and lodge Form 384 Resolution
by directors of a small proprietary company controlled by a foreign company
which is not part of a “large group” within the deadlines set out in instrument
2017/204.

9. Identify the current company tax rate for both smaller and large
businesses.
From the 2017–18 income year, companies that are base rate entities must
apply the lower 27.5% company tax rate.
A base rate entity is a company that both:
Has an aggregated turnover less than the aggregated turnover threshold –
which is $25 million for the 2017–18 income year
80% or less of their assessable income is base rate entity passive income – this
replaces the requirement to be carrying on a business.

10. Explain the process by which a business reports GST to the Australian
Tax Office.
Grow Management Consultant’s GST reporting and payment cycle will be one
of the following:
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Monthly – if Grow Management Consultant’s GST turnover is $20 million or
more.
Quarterly – if Grow Management Consultant’s GST turnover is less than $20
million – and we have not told you that you must report monthly.
Annually – if you are voluntarily registered for GST. That is, you are registered
for GST; and Grow Management Consultant’s GST turnover is under $75,000
($150,000 for not-for-profit bodies).
Depending on Grow Management Consultant’s circumstances, you can change
the cycle you use to report and pay GST. This may happen when Grow
Management Consultant’s GST turnover changes or if you choose to report and
pay using a different cycle.
If you elect to change Grow Management Consultant’s cycle early in the
lodgement period (for example, in the first month of the quarter or at the
beginning of the financial year) you can generally commence the new cycle
straight away. Otherwise, the new cycle will take effect from the start of the next
quarter or year.

11. Identify the penalty rate to be applied if a supplier does not provide an
ABN.
The penalty rate to be applied if a supplier does not provide an ABN is 48.5%

12. A non-profit Grow Management Consultant needs to register for GTS

after it has a turnover of more than how much
The current rate is $150,000.
Grow Management Consultant’s GST turnover meets the registration turnover
threshold if Grow Management Consultant’s current GST turnover or Grow
Management Consultant’s projected GST turnover threshold is at or above the
turnover threshold.
Grow Management Consultant’s current GST turnover is the value of all the
supplies (sales) you make during the current month and the previous 11
months. Grow Management Consultant’s projected GST turnover is the value of
all Grow Management Consultant’s sales you make during the current month
and the next 11 months.
Both the current and projected GST turnover is based on Grow Management
Consultant’s gross income, excluding all the following:
 Sales that are input taxed sales
 Sales not connected with an enterprise that you carry on
Student Name: Mac Guiver Castro Sánchez
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BSBFIM601 Manage Finances
 Sales that are not made for consideration (unless the sales made to
associates).
A gift made to you is not considered payment for a sale and is not subject to
GST. The value of a gift is also excluded when calculating Grow Management
Consultant’s GST turnover.
If you are not registered for GST, you will need to calculate Grow Management
Consultant’s current GST turnover and Grow Management Consultant’s
projected GST turnover each month to identify if you are required to be
registered for GST purposes, i.e. when either of these turnovers are $150,000
or more.
Generally, you must register for GST within 21 days if either GST turnover
meets or exceeds the GST turnover threshold of $150,000.

13. Explain the difference in pay As You Go withholding obligations for

employees and contractors.
If Grow Management Consultant’s Grow Management Consultant has
employees, you must withhold amounts from their pay and send the withheld
amounts to us through the PAYG withholding system.
You must register Grow Management Consultant’s Grow Management
Consultant with us when you are required to withhold from payments to Grow
Management Consultant’s employees and/or Grow Management Consultant’s
independent contractors.
Under the PAYG system, independent contractors can provide for their own
income tax liability by entering into voluntary agreements authorising Grow
Management Consultant’s not-for-profit Grow Management Consultant to
withhold amounts from their payments.
If Grow Management Consultant’s Grow Management Consultant is in a labour
hire arrangement, it must withhold from payments to the labour hire firm if the
firm has not quoted its ABN.

PAYG
If the contractor doesn't provide you with their ABN:
you generally need to withhold 47% (from 1 July 2017) from payments to them
give a completed PAYG payment summary - withholding where ABN not quoted
to the contractor with their net payment, or as soon as practicable afterwards
include the payments in Grow Management Consultant’s PAYG withholding
where ABN not quoted – annual report and lodge the report with us by 31
October.
Student Name: Mac Guiver Castro Sánchez
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BSBFIM601 Manage Finances
 If the contractor is an individual who has a PAYG withholding voluntary
agreement with you:
 Work out the PAYG amount to withhold from payments to the contractor
 Use the tax withheld calculator or tax tables online
 Take into account any information provided by the contractor in a
withholding variation or withholding declaration
 By 14 July, provide a PAYG payment summary – business and personal
services income to the contractor showing the total amounts paid and
withheld
 Include the payments in Grow Management Consultant’s PAYG payment
summary annual report and lodge the report with us by 14 August.
 If you have to withhold PAYG amounts for any reason:
 If you haven't withheld before you need to register for PAYG withholding
straightaway
 Report and pay the PAYG withholding amounts to us in Grow
Management Consultant’s BAS which is usually quarterly or monthly for
most businesses. Business withholding more than $1 million per year
report and pay more often.
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Task 2
Growth Management Consultants
Finance Report

Introduction
Growth Management Consultants is a company specialise in leadership
consultancy. It has been operational for five years, the company ran a total of
36 workshops, however the company try to replace the workshop with annual
conferences, the plan is generating $10.000 worth of sales for e-book during the
next financial year.

2016/17 Performance
Overall there was a good performance of income streams but an incurred loss.

INCOME Budget Actual Variation

Consulting fees 1,100,000 1,175,600 -75,600
Workshops 48,000 36,000 12,000
Publications 5,000 2,000 3,000
Executive search 108,000 108,000 0
       
NET INCOME 1,261,000 1,321,600 -60,600

Table 1: The income source categories of Grow management consulting according to their
budgeted, actual and the variation of the total income forecasted for 2017-2018.

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.

Cash flow statements analysis

Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
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-centred 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 centred, 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 Xero is the market leader for online accounting software in
overview 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
Student Name: Mac Guiver Castro Sánchez
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BSBFIM601 Manage Finances
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
categorising 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 Benefits:
Challenges 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: Grow Management Consultants
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 Grow Management Consultants 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 MYOB has a powerful cloud accounting saluting. The
overview 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 Benefits:
challenges Anytime, anywhere access: Cloud accounting gives
employees the ability to work on organizational content from
anywhere, using any device. The eliminate 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, Grow Management Consultants pay
a monthly fee. This eliminates the ongoing costs of
maintenance, updates and backups. Additionally, server
Student Name: Mac Guiver Castro Sánchez
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BSBFIM601 Manage Finances
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. Grow Management
Consultant’s workforce must be trained on the software to
avoid employees continuing with inefficient manual
processes.
QuickBooks
Package QuickBooks online is the cloud accounting product
overview 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 Benefits:
challenges 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 favourite feature.
Automatic syncing occurs across desktops, tablets and
phones, propagating changes to data throw-out 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-inscription technology as leading banks, firewall
software, security personnel and automatic backups.
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
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
methodologies some accountants require to perform certain
analyses. Other limitations include the number of products
an organization can offer. Grow Management Consultants
looking for a more extensive range of features can pay a
one-time fee for the desktop version.
 Student Name: Mac Guiver Castro Sánchez
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BSBFIM601 Manage Finances

1. Develop forecasts
 Develop budget forecasts and ensuring that the analysis of the previous year’s data and future plans as indicated in
the business plan is taken into account in determining projected income and expenditure.
 As per the Grow Management Consultant’s policy, the budget forecasts are to be submitted in Excel. Develop a
suitable format within Excel for Grow Management Consultant’s budget.
 Ensure that Grow Management Consultant’s budget includes the estimated income and costs for the conference and
e-book to be implemented in 2017. This is provided to you as a separate document.
 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 indicated in the document.

Budget forecast
July 17 to June 18

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total
Income forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast forecast Forecast Budge
t
Consulting fees 97,975 85,000 82,500 122,000 98,000 121,000 87,625 89,500 105,000 83,000 70,500 133,500
Conference
E-book
Executive search 7,000 8,000 12,000 10,000 12,000 9,000 9,000 9,000 11,000 12,000 11,000 10,000 20,600
104975 93000 82500 132000 110000 130000 96625 98,500 116,000 95,000 81,500 143,500
Project 10% increase 10498 9300 8250 13200 11000 13000 9663 9,850 11,600 9,500 8,150 14,350
Net income 115473 102300 90750 145200 121000 143000 106288 108350 127600 104500 89650 157,850
Expenses (includes 5%
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 44,100 504,000
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 90,000
Cleaning 840 840 840 840 840 840 840 840 840 840 840 840 9,000
 Student Name: Mac Guiver Castro Sánchez
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BSBFIM601 Manage Finances

Accounting fees 0 0 7,164 0 0 0 0 0 0 0 0 0 6,000

Advertising and 1,050 0 525 735 0 840 0 0 2,100 0 0 0 500
marketing
Contract writer (e- 10,500 113 113 113 113 113 113 113 113 113 113 113 11,000
book)
Computer software 2,370 0 0 0 2,100 0 0 0 0 0 0 4,000
Motor vehicle 686 474 914 186 156 276 588 0 966 620 221 357 5,000
expenses
Utilities 706 0 0 0 1,550 776 0 1,100 0 0 0 4,000
Insurance 0 0 345 0 0 3,539 0 0 0 0 0 4,000
Office supplies 105 126 189 126 158 200 189 242 242 137 231 263 1,500
Lease/loan payments 105 126 105 105 221 53 158 0 210 158 128 210 1,300
Rent 3,947 3,947 3,947 3,947 3,947 3,947 3,947 3,947 3,947 3,947 3,947 3,947 42,960
Sundries 210 210 147 179 242 210 210 147 179 242 189 231 2,000
Travel and 1,662 0 1,507 2,044 128 0 0 0 134 180 0 0 5,000
accommodation
Repairs & 105 0 420 0 0 420 0 315 0 0 0 0 1,500
maintenance
Telephone 315 305 326 336 305 315 305 326 347 252 221 221 3,000
Conference venue and $5,000
catering
Speaker fees and $10,000
travel
Marketing (conference $5,000
only)
Conference bags $1,000
Conference casual $30,000
project officer
E-book writer $10,000
Desktop Publishing $3,000
Marketing (e-book) $1,200
Total Expenses 134,075 58.926 65,546 58,307 55,804 60,213 56,475 58,818 59,528 55,837 55,237 55,531 $665,36
 Student Name: Mac Guiver Castro Sánchez
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BSBFIM601 Manage Finances

0
Surplus/Deficit -18,602 43,374 25,204 86,894 65,196 82,787 49,812 49,532 68,072 48,663 34,413 102,319 $725,64
0
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Financial compliance and tax liabilities report
GST reporting requirements
Australian Taxation Office (ATO) has made changes to the GST reporting
requirements of small businesses.

Small businesses eligible for the simplified GST reporting will only be required
to report the following labels on their BAS:

 G1: Total Sales

 1A: GST on Sales
 1B: GST on Purchases
 1H: GST Instalments (when applicable)

The following labels are those no longer required:

 G2: Export Sales

 G3: GST-Free Sales
 G10: Capital Purchases
 G11: Non-Capital Purchases

This change to small business GST reporting methods will be effective from 1
July 2017. Furthermore, from 1 July 2017, businesses with an aggregated
annual turnover (the turnover of the specific business and any businesses
connected or affiliated with it) of less than $10 million, will fall within the small
business category. Therefore, eligible small business can expect to see less
reporting labels on the first BAS for the 2018 financial year.

PAYG withholding obligations

You must withhold tax from benefit payments to members who are:

 under 60 years’ old

 under 60 years old and receives a reversionary capped defined benefit
income stream – if the deceased was 60 years or over when they died
 60 years old or over – if the benefit is from a capped defined benefit
income stream.

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    
o if the recipient does not provide their TFN before the payment is
made you must withhold tax at the top marginal rate (47% for
Student Name: Mac Guiver Castro Sánchez
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BSBFIM601 Manage Finances
residents or 45% for non-residents from 1 July 2017) from the
taxable component
o if the recipient is a foreign resident for tax purposes, you will need
to check if there is a tax treaty External Link with their country of
residence – the tax treaty will tell you if the benefit payment will be
assessable income in Australia or the other country – if it
is only assessable in the other country then no tax needs to be
withheld
 pay withheld amounts to the ATO
 issue a PAYG payment summary to the member    
o PAYG payment summary – superannuation lump sum
o PAYG payment summary – superannuation income stream
 lodge a PAYG withholding payment summary statement with us, usually
by 14 August.

PAYG income tax instalment

Pay as you go (PAYG) instalments is a system for making regular payments

towards Grow Management Consultant’s expected annual income tax liability. It
only applies to you if you earn business and/or investment income over a
certain amount.

If you pay PAYG instalments, you still need to lodge an annual tax return.

We will notify you if you need to start paying by instalments under the PAYG
instalment system. Before Grow Management Consultant’s PAYG instalments
are due, we will also send you an activity statement or instalment notice,
depending on Grow Management Consultant’s circumstances.

As an individual (including if you're in business as a sole trader), you can view,

lodge, pay, vary and manage all Grow Management Consultant’s PAYG
instalment obligations online if you have a myGov account linked to the ATO.

Payroll tax obligation

If you are an employer, you may have a payroll tax obligation.

Payroll tax is a state and territory tax on the wages you pay as an employer. It's
calculated on the amount of wages you pay each month and payable in the
state or territory of Australia where the services were performed.

Wages liable for payroll tax include:

Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
 Employee wages

 Contractor payments

 Directors' remuneration

 Superannuation

 Allowances

 Fringe benefits

 Bonuses and commissions

 Termination payments

Not all businesses will have a payroll tax obligation. You only must pay it if
Grow Management Consultant’s taxable wages (or Grow Management
Consultant’s group wages) exceed the threshold in Grow Management
Consultant’s state or territory.

Each state or territory has a different tax threshold as well as registration

process. It's important to know what the threshold is in Grow Management
Consultant’s state or territory, and if Grow Management Consultant’s taxable
wages are approaching or have surpassed that threshold because you may
have to register for payroll tax. 

Payroll tax is generally lodged and paid to state and territory Revenue Offices
monthly.

There are various employer-based exemptions for payroll tax. Check with Grow
Management Consultant’s relevant Revenue Office to find out if Grow
Management Consultant’s business qualifies for an exemption.

Superannuation entitlements and requirements to comply with legislation

regarding frequency of payment, choice of fund and reporting to staff

Super is money you pay for Grow Management Consultant’s workers to provide
for their retirement.

Generally, if you pay an employee $450 or more before tax in a calendar month,

you have to pay super on top of their wages.

The minimum you must pay is called the super guarantee (SG):
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
 the SG is currently 9.5% of an employee’s ordinary time earnings
 you must pay the SG at least four times a year, by the quarterly due
dates
 you must pay and report super electronically in a standard format,
ensuring you meet Super Stream requirements
 Grow Management Consultant’s super payments must go to a complying
super fund – most employees can choose their own fund
 if you don’t pay the SG on time, you may have to pay the super
guarantee charge.
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Task 3
Grow Management Consultants Pty Ltd
Profit & Loss Statement for Grow Management Consulting FY 2018 – 2019

PROFIT & LOSS 2017 - 2018 PROFIT & LOSS 2018 - 2019
Income   Income  
Consulting Fees $1,410,720 Consulting Fees $987,504
Conference $45,000 Conference $31,500
E-book $15,000 E-book $10,500
Executive Search Service $144,000 Executive Search Service $100,800
       
Gross profit/net sales $1,614,720 Gross profit/net sales $1,130,304
       
Expenses   Expenses  
Accounting fees $7,165 Accounting fees $7,882
Advertising and marketing $5,250 Advertising and marketing $5,775
Computer software $4,830 Computer software $5,313
Insurance $4,028 Insurance $4,431
Lease/loan payments $1,575 Lease/loan payments $1,733
Motor vehicle expenses $5,444 Motor vehicle expenses $5,988
Office cleaning $10,800 Office cleaning $11,880
Office supplies $2,207 Office supplies $2,428
Rent & Rates $45,108 Rent & Rates $49,619
Repairs & Maintenance $1,260 Repairs & Maintenance $1,386
Salaries/wages (including Salaries/wages (including
PAYG) $529,200 PAYG) $582,120
Superannuation $63,000 Superannuation $69,300
Telephone $3,569 Telephone $3,926
Utilities $4,131 Utilities $4,544
Sundries $2,384 Sundries $2,622
Contract writer (e-book) $48,090 Contract writer (e-book) $52,899
Travel and Accommodation $5,654 Travel and Accommodation $6,219
E-book $10,000 E-book $11,000
Desktop publishing $3,000 Desktop publishing $3,300
Marketing (e-book) $1,200 Marketing (e-book) $1,320
Conference venue and Conference venue and
catering $10,000 catering $11,000
Speaker fees and travel $11,000 Speaker fees and travel $12,100
Marketing (conference only) $7,500 Marketing (conference only) $8,250
Conference bags $1,200 Conference bags $1,320
Conference casual project Conference casual project
officer $30,000 officer $33,000
       
Total expenses $817,595 Total expenses $899,355
NET PROFIT (Net NET PROFIT (Net
Income) $797,125 Income) $230,950
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Grow Management Consultants.
Financial performance report.

Overall performance

$800,000

$700,000

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0
NET PROFIT (Net Income)

Grow Management Consultants is going to have an income just for 30%

compared with them net income from 2018, this because they expect less
people to attendance to the conference and they are planning pay more than
the last year by this conference. The company is going to get $566,175 low than
2018.
Income variations

$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
Gross profit/net sales

For 2019 Grow Management Consultants estimate that they are going to have
just 70% of the people that assisted last year that means that the sales would
be $484.415 low than last year.
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Cost variations

$900,000

$880,000

$860,000

$840,000

$820,000

$800,000

$780,000

$760,000
Total expenses

For 2019 Grow Management Consultants estimate that they are going to spend
10% more than last year that means that the coast would be $81,760 more than
last year.
Discrepancies
If the company estimates that it will receive fewer people who will attend the
conference, then the expenses should be reduced and not increased, every
year the costs increase but these should be proportional to the amount of
people expected to receive.
Recommended revisions
It is recommended to make a variation to the expenses, estimating that only
70% of people is going to attended compared with 2018. In that way decrease
the expenses and the income would be higher, however not more than last
year. If the Grow Management Consultants wants to increase them income
must be increase the price of the conference or the number of attended
number.
Conference fee
If the company wants to make a profit of 20% this increments in the expenses
would be fine because the income for 2019 assuming the attendance are for 70
people will be of 20.5%
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
Task 4
Summary
Debtor Management is critical to ensuring Grow Management Consultant’s
business has enough working capital to reinvest and grow. When you’re busy
growing Grow Management Consultant’s business it can be easy to neglect
managing Grow Management Consultant’s debtors.
1. Credit Policy and terms of trade
Credit policies need to be routinely reviewed to ensure they are appropriate for
the Grow Management Consultants risk profile. The credit policy should be
clearly articulated in writing to all debtors and understood by all staff. Terms of
trade should be documented and cover areas such as prepayments, down
payments, terms and any discounts for early settlement.
2. Invoicing and estimates
All quotes, estimates, invoices, contracts, agreements, purchase orders, and
related documentation should refer to Grow Management Consultant’s terms of
trade and credit policy, and information on the nature of work/products supplied,
quantities, timings and the structure and method of payment should be clearly
articulated in order to minimise any misunderstandings. Ensuring that
acceptance of terms in writing is recommended. And of course, invoice as early
and as often as possible.
3. Accounts receivable processes
The process for collections should be clearly mapped out and understood by
staff, with the timings of various communications (letters/emails/phone calls)
articulated. In the event of debtor disputes, payment of the non-disputed
amount should always be sought to maintain cash flows.
4. Conduct Credit Checks to identify and mitigate risks
Credit checks for new and existing customers should be carried out routinely to
identify issues which can influence credit limits. Credit data products such as
ledger monitoring and alerts are increasingly available to identify deterioration in
credit-worthiness and mitigate credit risk.
5. Review system and ledger monitoring
Scheduled reviews of credit limits is critical to ensure settings are appropriate
for individual debtors. Routinely monitoring the days outstanding (DSO) is
critical to identifying adverse trends in the debtor’s ledger and ensuring prompt
action.
6. Systems and data management
Good debtor management relies on well-maintained information. There are
numerous software solutions available to assist owners in credit management,
and increasingly more of them are cloud-based. Data integrity needs to be
Student Name: Mac Guiver Castro Sánchez
Student ID: VTI18197
BSBFIM601 Manage Finances
maintained to ensure credit limits are appropriate, and the Grow Management
Consultant has good knowledge of the legal entities to which credit is extended.

7. Credit Management services

Close monitoring of the debtor’s ledger is the best way to minimising issues
however there will be situations which are uncontrollable. Grow Management
Consultants should consider if the use of credit insurance products and debt
recovery services is appropriate to manage the risk and effects of bad debts.
Ensuring that terms of trade have been reviewed by solicitors and are legally
compliant will ensure there will be no impediments to the recovery process.
Some financing solutions such as factoring (also known as debtor finance) can
provide a cost-effective and comprehensive credit management function in
addition to a flexible line of credit which ensures that the debtor ledger is
maintained and sufficient working capital exists to fund the business.
8. Bad debt provisioning
Credit management is about safeguarding profitability and provisions for bad
debts should ideally be made in any annual or ongoing budgeting process to
minimise the risk of impacting on profitability.
Efficient and effective debtor management is critical to maintaining strong,
healthy cash flows but gains from process improvement can be finite in a
competitive business environment, and cash flow is impacted by many external
factors which make it inherently unpredictable. In such circumstances working
capital finance solutions, such as invoice finance and debtor finance may help
bridge the cash flow gap between invoicing and payment to ensure wages, tax
and creditors are kept up to date.

Growth Management Consultants

Aged Creditors Report
As of December 31 2017

'Report: Aged Creditors Analysis'

Client Range: All

Client Name 120+ Days 90 Days 60 Days 30 Days Current Total

ATO       $4,356      
      $2,714        
          $3,781    
               
Totals     $ 2,714 $4,356 $3,781