BSBFIM601 Manage finances
Assessment Task 2
Assessment Task 2 Part A: Financial Management planning project
Complete the following activities:
1. Prepare a financial performance report
● Review the scenario information above, as well as Profit and Loss and
Cash Flow Statements provided to you.
● Using this information, identify areas of the business that have generated a
profit and those that have generated a loss.
● Prior to preparing your financial performance report, conduct research to
establish why those areas have made a profit or loss. Your research should
include a review of the financial data provided to you and economic
conditions and business trends that may have resulted in the profit or loss.
You will be required to report on your findings in the financial
performance report as outlined below.
● You should also conduct research on financial software systems as per the
scenario information. Make notes for use in your report.
● Prepare a financial performance report for the Principal Consultants using
the template provided by your assessor that includes an:
● Overview of the purpose of the report.
● Analysis of the previous year’s (2015 – 2019) profit and loss statement for
Grow Management Consultant, including revenue generated, cost of sales,
as well as gross profit/loss margin and net profit/loss margin.
● Analysis of overall business performance, as well as performance of each
of the income streams for 2015 – 2019.
● Outline of reasons for profit or loss based on your analysis of the data and
research on economic conditions and business trends.
● Analysis of the organisation’s goals and priorities for the upcoming
financial year as documented in the Strategic Business Plan and financial
resources required to achieve these goals, as well as key dates.
● An analysis of cash flow trends as per the cash flow statements.
● Review and analysis of at least three other financial software that the
business could use, including the advantages and disadvantages of each, as
well as the advantages and disadvantages of MYOB that is currently used.
Answer:Analysis of the previous year’s ( 2019-2020) profit and loss statement
Overall there was a good performance of income streams but an incurred loss.
● The net profit was $797,125 and the expenses were $817,595.
● The Gross profit/net sales was $1,614,720
● The income from workshops was $45,000 and it was projected $75,000 therefore,
40% of income from workshops was loss.
● The income from publications $15,000 and it was budgeted only $10,000, therefore,
$5,000 profit earned.
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.
Dates: 2019-2020 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 2019.
● Increase range of e-books commencing with organizational change e-book to be
published during 2019.
Dates:2019-2020 financial year
Continue building deeper customer relationships
● Customer-centered 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 centered, 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: 2019-2020 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 overview
Costs
Benefits and Challenges
Xero is the market leader for online
accounting software in 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 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
categorizing transactions in seconds
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:
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: Organisations 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 organisations
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 overview
Costs
Benefits and challenges
MYOB has a powerful cloud accounting
saluting. The 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
MYOB Essentials starts from $29/month
(basic and simple)
MYOB Account right starts from $43/month
(more features like stock tracking and
billing)
Benefits:
Anytime, anywhere access: Cloud
accounting gives employees the ability to
work on organizational content from
anywhere, using any device. The eliminates
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,
organisations pay a monthly fee. This
eliminates the ongoing costs of maintenance,
updates and backups. Additionally, server
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. An
organisation’s workforce must be trained on
the software to avoid employees continuing
with inefficient manual processes.
QuickBooks
Package overview
Costs
Benefits and challenges
QuickBooks online is the cloud accounting
product 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.
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:
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 favorite feature.
Automatic syncing occurs across desktops,
tablets and phones, propagating changes to
data throughout 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-encryption technology as leading
banks, firewall software, security personnel
and automatic backups. Also, the activity log
below shows all user and third-party
activity, including user log-ins, editing of
accounts and items, bank transactions
downloads and more. A team of technical
experts monitors the network in real time,
ensuring organizational content is
completely protected from online threats.
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
methodologies some accountants require to
perform certain analyses. Other limitations
include the number of products an
organization can offer. Organizations
looking for a more extensive range of
features can pay a one-time fee for the
desktop version.
2. 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 organisation’s policy, the budget forecasts are to be submitted
in Excel. Develop a suitable format within Excel for your budget.
● Ensure that your budget includes the estimated income and costs for the
conference and e-book to be implemented in 2020. 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.
Answer:Budget 2020-2020
Type
Cost
Venue and catering in Sydney CBD
(5% increase)
$5,250
Speaker fees and travel
(10% increase)
$11,000
Marketing
(10% increase)
$5,500
Conference bags
(5% increase)
$1,050
Staff time (appoint casual Project Officer
for 6 months, may be permanent
depending on success)
(10% increase)
$33,000
Total costs
$55,800
Estimated E-book costs
Type
Cost
Contract writer
(10% increase)
$11,000
Desk top publishing
(5% increase)
$3,150
Marketing
$1,320
Total cost
$15,470
Income statement forecast 2020.
Conference Sale income
Conference attendance is aimed at 100 people
75000
Cost of good sales
-55800
E-book sale income
E-book sale
10000
Cost of good sales
-15470
Total profit
13730
3. Develop key financial compliance requirements and liabilities for tax in preparation for
meeting
Research and report on the business’ key financial compliance requirements and
liabilities for tax.
Develop a short report to provide to the management team at the meeting. The handout
should explain:
Research and report on the business’ key financial compliance requirements and
liabilities for tax.
Quarterly GST report
If your GST turnover is less than $20 million and we haven't told you to report GST monthly,
you can report and pay GST quarterly. If you report and pay quarterly, you use one of three
reporting methods: Full reporting method: If your GST turnover is $10 million or more, you
need to use the full reporting method. Under the full reporting method, you calculate, report
and pay your GST amounts quarterly. You provide more detailed information on your
business activity statements (BAS). You can use either the accounts method or the calculation
worksheet method to work out your GST amounts for your BAS. You have the option to use
the GST full reporting method or Simpler BAS when you report quarterly if either:
● Your ​GST turnover​ is less than $10 million but you have ​aggregated turnover​ ​greater
than $10 million (for the previous year or the current year)
● You make input-taxed supplies as your main business or enterprise activity.
What you need to report
If you report and pay GST quarterly and your GST turnover is $10 million or more, you must
report amounts at the following labels on your activity statement each quarter:
● G1 Total sales
● G2 Export sales
● G3 Other GST-free sales
● G10 Capital purchases
● G11 Non-capital purchases
● 1A GST on sales
● 1B GST on purchases.
You can use either the accounts method or the calculation worksheet method to work out
your GST amounts.
If you have a wine equalisation tax (WET), luxury car tax (LCT) or fuel tax credit (FTC)
obligations or entitlements, you must also report these amounts each quarter
(labels 1C, 1D, 1E, 1F, 7C or 7D). These labels are shown on your BAS if you have these
obligations.
Simpler BAS reporting method
If your GST turnover is less than $10 million, you need to use the Simpler BAS reporting
method unless you are on GST instalments.
Under this reporting method, you report less information on your quarterly BAS, but still
calculate and pay your GST amounts quarterly.
What you need to report
You must report amounts at the following labels on your Simpler BAS form each quarter, if
your GST turnover is less than $10 million:
● G1 Total sales
● 1A GST on sales
● 1B GST on purchases.
You do not need to report amounts at the following labels:
● G2 Export sales
● G3 Other GST-free sales
● G10 Capital purchases
● G11 Non-capital purchases.
If you have a wine equalisation tax (WET), luxury car tax (LCT) or fuel tax credit (FTC)
obligations or entitlements, you must also report these amounts each quarter
(labels 1C, 1D, 1E, 1F, 7C or 7D). These labels are shown on your BAS if you have these
obligations.
GST instalments method (pay quarterly and report annually)
You may elect this reporting method if you meet the eligibility requirements, including where
you either:
● Carry on a business with an aggregated turnover of less than $10 million
● Do not carry on a business (for example, you are a not-for-profit organisation) and
your GST turnover is $2 million or less.
If you elect to use this reporting method, you pay a quarterly GST instalment that we work
out (you can vary it) and report your actual GST information annually on an annual GST
return.
What you need to report
You must report amounts at the following labels on your annual GST return:
● G1 Total sales
● 1A GST on sales
● 1B GST on purchases
● 1H GST instalment amounts reported in your quarterly instalment notices for the
period shown on the annual GST return.
You do not report amounts at these labels:
● G2 Export sales
● G3 Other GST-free sales
● G10 Capital purchases
● G11 Non-capital purchases.
If you have a wine equalisation tax (WET), luxury car tax (LCT) or fuel tax credit (FTC)
obligations or entitlements, you must also report these amounts each quarter
(labels 1C, 1D, 1E, 1F, 7C or 7D). These labels are shown on your annual GST return if you
have these obligations.
You use your annual GST return to account for any difference between your actual GST
liability and the total of your GST instalments for the year (or the period shown on your
annual GST return). You show the total amount of GST instalments that were payable for the
year (or the period shown on your annual GST return) at label 1H of your annual GST return.
If the total instalments are more than your actual GST liability for the year, you claim a
refund from us. If your total instalments are less than your actual GST liability, you must pay
the difference to us by the time your annual GST return is due.
Under the GST instalments method, any refund you may be entitled to is paid after you lodge
your annual GST return for the year.
Lodgment and payment dates
The following table provides a summary of the payment and lodgment dates for businesses
that report or pay GST quarterly.
Table 1: For businesses that report or pay GST quarterly
Quarter
Payment and lodgment date
September quarter
28 October
December quarter
28 February
March quarter
28 April
June quarter
28 July
If you have chosen to pay by GST instalments, your instalments are also due on the dates
shown above.
If you are a primary producer or a special professional who pays only two GST instalments
for the year, your instalments are due on 28 April and 28 July.
If the due date falls on a weekend or a public holiday, you have until the next business day to
report and pay.
If you pay GST instalments, your annual GST return will be due on the same date your
income tax return is due. If you are not required to lodge an income tax return, your annual
GST return will be due by 28 February following the financial year the return covers.
Changing reporting methods
Your GST turnover directly determines whether you use the Simpler BAS or full reporting
method. If your GST turnover increases above or falls below $10 million, your reporting
method changes.
To elect to use the GST instalment method, there are additional eligibility requirements.
If you want to switch from or to GST instalments, you need to ​contact us​.
If you contact us by 28 October, your election or revocation will generally take effect from
1 July of that financial year (or by the concessional due date, if you lodge your September
quarter activity statement through a registered agent).
If you contact us after 28 October, your election or revocation will generally take effect from
1 July of the next financial year.
You may request in writing that your election take effect from the start of an earlier tax
period. However, we will only approve your request under exceptional circumstances.
● PAYG withholding obligations
Your self-managed super fund (SMSF) has to withhold tax from benefit payments if the
member is:
● under 60 years old
● under 60 years old and the benefit is from a reversionary capped defined benefit
income stream where the deceased was 60 years or over when they died
● 60 years old or over and the benefit is from a capped defined benefit income stream.
See also:
● Refer to ​Schedule 13 – Tax table for superannuation income streams​ for more
information on when to withhold.
When is tax not withheld?
Tax is not withheld if the member:
● is 60 years old or over and the benefit is from an income stream which is not a capped
defined benefit income stream
● has died and the benefit is paid to a dependent beneficiary as a lump sum
● has died and the benefit is paid to a dependent beneficiary as an income stream which
is not a capped defined benefit income stream and either the dependant or member
were 60 years or over
● has a terminal medical condition
● died in the line of duty as a member of the defence force, police or protective services
and the benefit is paid as a lump sum.
How to withhold tax
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
● issue a PAYG payment summary to the member for a
o
superannuation lump sum
o
superannuation income stream
● lodge a PAYG withholding payment summary statement with us.
● PAYG income tax instalment
Pay as you go (PAYG) instalments is a system for making regular payments towards your
expected end of year income tax liability. You report and pay your PAYG instalments on
your business activity statement (BAS).
You'll need to lodge your activity statements and pay all your PAYG instalments before you
lodge your tax return. This will make sure your income tax assessment takes into account the
instalments you've paid through the year.
You can generally choose between two options for calculating and paying your PAYG
instalments, which will apply for the income year.
Option 1 – Instalment amount
If you choose option 1 'instalment amount', you'll pay the PAYG instalment amount we
calculate. We calculate this amount using the business and/or investment income from your
most recently assessed income tax return. The benefit of this method is that you'll know the
amount of your instalment you need to pay each quarter, without having to work it out
yourself, which can help you plan and budget for the payment.
Option 2 – Instalment rate
This option allows you to calculate your PAYG instalment amount based on your actual
income for that period multiplied by a rate we provide you. The benefit of this method is that
your instalments are based on your income as you earn it, instead of a projection based on
your tax return. You may prefer this method if your income changes throughout the year.
PAYG instalment notice
If you pay PAYG instalments using option 1 ‘instalment amount‘ and have no other
obligations that require a BAS, we will send you an instalment notice rather than a BAS. You
don't need to lodge this notice (unless you want to vary the amount), you just need to pay the
amount shown on the notice, by the due date.
● Payroll tax obligations (state government)
●
Taxes and duties levied by state and territory governments include:
● stamp duty
● payroll tax
● land tax.
These taxes and duties vary between states and territories. You need to ask your local
state/territory revenue office about them and not us (the ATO) – ​contact details​ are provided.
States and territories also have their own laws regulating the fundraising activities of
not-for-profit (NFP) organisations.
Stamp duty
Stamp duty – also known as ‘duty’ in some states – is a tax on written documents
('instruments') and certain transactions, including
● motor vehicle registrations and transfers
● insurance policies
● mortgages
● transfers of property such as businesses, real estate and certain shares.
The types of instruments that are subject to duty vary between the states and territories. The
rate of duty varies according to the type and value of the transaction involved and may not be
charged on all transactions listed above in every jurisdiction. Depending on the nature of the
transaction, certain concessions and exemptions may be available.
Payroll tax
Payroll tax is levied by state and territory governments on the wages paid by employers.
Employers are liable for payroll tax when their total Australian wages exceed the tax-free
threshold. Tax-free thresholds vary between states and territories.
Don't confuse payroll tax with the pay as you go (PAYG) withholding system. Payroll tax is
payable to the state/territory by an employer, based on the total wages paid to all employees.
Wages include salary, allowances, superannuation contributions, fringe benefits, shares and
options and certain contractor payments.
Under the PAYG withholding system, amounts are generally withheld from payments made
to an individual and sent to us to offset the individuals' end-of-year income tax liability.
Some NFP organisations may be exempt from payroll tax provided specific conditions are
satisfied. These organisations may include religious institutions, public benevolent
institutions, public or NFP hospitals, NFP non-government schools and charitable
organisations.
See also:
● Payroll Tax AustraliaExternal Link
● Pay as you go withholding
Land tax
Land tax is imposed in all states and the ACT but not in the Northern Territory. It is a tax
levied on landowners – except in the ACT where it applies to all residential properties that
are rented or are owned by a trust or corporation.
Land owned and used by certain NFP organisations may be exempt from land tax. These
organisations generally include NFP societies, clubs and associations, religious institutions,
public benevolent institutions and charitable institutions.
Concessional rates of tax may be applied if land is used as a person’s principal place of
residence, primary production land or land used by a club for sporting purposes
Superannuation guarantee
Under the superannuation guarantee, employers have to pay superannuation contributions of
9.5% of an employee's ​ordinary time earnings​ if:
● when an employee is paid $450 or more before tax in a month and is:
● over 18 years, or
● under 18 years and works over 30 hours a week.
This applies to full-time and part-time employees and some casual employees and includes
temporary residents.
Superannuation has to be paid at least every 3 months, into the employee's nominated
account.
4. Email to the Principal Consultant
Hello dear,
Please find attached the budget forecast, as well as the finance report and financial
compliance and tax liabilities report.
Let me know if you have any further questions or concerns.
Regards,
Joseph
Assessment Task 3: Budget review project
Review of overall performance and gross/net profit margins
Financial information
Actual
Budgete
d
49.37%
Net profit margin
48.74%
Net Profit Margin = Net Profit / Total Revenue
Calculation of variation in actual versus budgeted amounts for each income source
PROFIT & LOSS
Income
2019 - 2020
$1,410,720
1,210,000
$200,720
% of an over-budgeted
amount
16.59%
Workshops
$45,000
75,000
-$30,000
-40.00%
Publications
$15,000
10,000
$5,000
50.00%
$144,000
144,000
$0
0.00%
$1,614,720
1,439,000
$175,720
12.21%
Accounting fees
$7,165
504,000
-98.58%
Advertising and marketing
$5,250
63,000
-$496,83
5
-$57,750
Computer software
$4,830
10,080
-$5,250
-52.08%
Insurance
$4,028
6,300
-$2,272
-36.06%
Lease/loan payments
$1,575
525
$1,050
200.00%
Motor vehicle expenses
$5,444
11,550
-$6,106
-52.87%
Office cleaning
$10,800
4,200
$6,600
157.14%
Office supplies
$2,207
4,200
-$1,993
-47.45%
$45,108
4,200
$40,908
974.00%
$1,260
4,200
-$2,940
-70.00%
$529,200
1,575
$527,625
33500.00%
$63,000
1,365
$61,635
4515.38%
Consulting fees
Executive Search Service
Gross profit/net sales
Actual
2019 - 2020
Budget
Variance
Expenses
Rent & Rates
Repairs & Maintenance
Salaries/wages (including PAYG)
Superannuation
-91.67%
Telephone
$3,569
45,108
-$41,539
-92.09%
Utilities
$4,131
2,100
$2,031
96.71%
Sundries
$2,384
5,250
-$2,866
-54.59%
$48,090
5,000
$43,090
861.80%
$5,654
10,000
-$4,346
-43.46%
$10,000
5,000
$5,000
100.00%
Desktop publishing
$3,000
1,000
$2,000
200.00%
Marketing (e-book)
$1,200
30,000
-$28,800
-96.00%
Conference venue and catering
$10,000
10,000
$0
0.00%
Speaker fees and travel
$11,000
3,000
$8,000
266.67%
Marketing (conference only)
$7,500
1,200
$6,300
525.00%
Conference bags
$1,200
1,575
-$375
-23.81%
$30,000
3,150
$26,850
852.38%
Contract writer (e-book)
Travel and Accommodation
E-book
Conference casual project officer
$0
Total expenses
NET PROFIT (Net Income)
Marketing (e-book)
Conference venue and catering
Speaker fees and travel
Marketing (conference only)
Conference bags
Conference casual project officer
$817,595
737,578
$80,017
10.85%
$797,125
$701,422
$95,703
13.64%
Actual
Budget
Variance
% of an over-budgeted
amount
$1,200
$10,000
$11,000
$7,500
$1,200
$30,000
30,000
10,000
3,000
1,200
1,575
3,150
-$28,800
$0
$8,000
$6,300
-$375
$26,850
-96.00%
0.00%
266.67%
525.00%
-23.81%
852.38%
Recommended revisions to the budget for conference costs for 2019 – 2020.
Type
Budgeted Cost
Recommended revisions
to the budget
Venue and catering in Sydney
CBD
(5% increase)
$5,250
$10,000
Speaker fees and travel
(10% increase)
$11,000
$11,000
Marketing
(10% increase)
$5,500
$7,500
Conference bags
(5% increase)
$1,050
$1,200
Staff time (appoint casual
Project Officer for 6 months,
may be permanent depending
on success)
(10% increase)
$33,000
$30,000
Total costs
$55,800
$59,700
Proposed conference fee for 2020 conference assuming attendance of 70 people and to
make a profit of at least 20%.
Anticipated numbers: 70 people. Price of conference to be $856.
To gain 20% of profit, then price of conference should be at least $800.
Email:
To:
Managers
From:
Financial management team.
Subject:
Intimation about profit & loss accounts
Date:
18 March 2020
Dear Sir/Madame,
I’m writing this email to inform you in regard to analysing profit and loss account. Following
were the profit accounts which had generated gross income for the company:
Income
Consulting fees
Actual
$1,410,720
Budget
1,210,000
Variance
$200,720
% of an over-budgeted amount
16.59%
$15,000
10,000
$5,000
50.00%
$1,614,720
1,439,000
$175,720
12.21%
Publications
Gross profit/net sales
However, income from workshops was reduced by 40%
Workshops
$45,000
75,000
-$30,000
-40.00%
Even though, the company has incurred loss from workshops but still company had managed
to earn gross income and net profit.
Gross profit/net sales
NET PROFIT (Net Income)
$1,614,720
1,439,000
$175,720
12.21%
$797,125
$701,422
$95,703
13.64%
Above information indicates that the company has earned profit from the profit & loss
statement which was favourable for the company.
Best regards,
Joseph
Assessment Task 4: Debtor management project
Company X
Aged Debtors Analysis
As of December 31​st​, 2019
Report: Aged Debtors Analysis
Client Range: All
Client
Name
120+
Days
90 Days
60 Days
30 Days
Curren
t
Total
Client 1
$-
$4,356.00
$-
$-
$-
$-
Client 2
$2,714.00
$-
$-
$-
$-
$-
$-
$-
$3,781.0
0
$-
$-
$-
2,714.00
4,356.00
3,781.00
0.00
0.00
0.00
Client 3
Totals
From the table can show we are have only 3 clients. Are satisfied in the condition of not
paying their fees in the time. With our company must be has a policy of allowing our clients
some additional condition for updated the new policy with this issue.
For the old client we suggest the sent the update about interest charges on fees toward debtors
that satisfy conditions related to the amount of time the debt hasn’t been pay on time.
-
If the debt hasn’t been paid for the amount of time 60-90 days outstanding, We will
charge additional interest of 5%. Client 3 falls in this category with his outstanding
debt of $3,781.00. If the debt is paid within this period, the clients out of pocket
expense will be $3970.00.
-
-
-
-
If the debt hasn’t been paid for the amount of time 90-120 days outstanding, We will
charge additional interest of 10%. Client 1 falls in this category with his outstanding
debt of $4,356.00. If the debt is paid within this period, the clients out of pocket
expense will be $4,791.60
- If the debt hasn’t been paid for the amount of time 60-90 days outstanding, We will
charge additional interest of 5%. Client 3 falls in this category with his outstanding
debt of $3,781.00. If the debt is paid within this period, the clients out of pocket
expense will be $3970.00
- If the debt hasn’t been paid for the amount of time 120+ days outstanding, We will
charge additional interest of 30%. Client 3 falls in this category with his outstanding
debt of $2,714.00. If the debt is paid within this period, the clients out of pocket
expense will be $3,528.20
If the debt hasn’t been paid for the amount of time 120+ days limit and opts out to
pay in instalments we will charge yet another additional amount of 2% of the amount
of instalment paid
With the last of recommendation we should to keep:
– Perform credit checks on new customers.
– Monitor their customers for payment defaults, court judgments and ASIC changes
(administration, winding up orders, change of directors).
– Be alerted when their clients are in financial difficulty.
– Use the Creditor Watch membership logo on their invoices, statements and final notices.
This encourages customers to pay their bills on time.
– Access debt collection templates including final notices and letters of demand.