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Introduction: Manage Organisational Finance
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1. Identify the current statutory requirements for tax compliance and list and calculate the tax liabilities for Houzit Pty Ltd under taxation legislation.
Tax compliance is associated with the decision of taxpayers to associate and work in accordance with the tax laws. These compliances are associated with the tax laws and regulations that are in practice in a country. The act of compliance is assessed by paying taxes on time and accurately. Adherence to the tax laws is important as it helps the system to work properly and it helps in supporting the programs initiated by the people. Tax law compliance of people helps in providing people of the country with various facilities and enhancing their course of life. A simplified taxing process encourages people to be compliant with taxation processes. A highly complicated tax process gives a high rate of tax evasion.
Certain measures are associated with the calculation of tax liabilities. Generally, statutory compliances include the aspect of
Income tax act: This act lays down the guidelines associated with the guidelines that tell people about the guidelines required payment of taxes depending on the net income of people. This act is highly important to be adhered to by people of all sections who are eligible to pay income taxes.
Companies act: This policy lays down the guidelines for the working process and the norms that are to be abided by a company. This act also considers the financial aspect that is associated with the overall work process of the organisation. This is one of the measures that help in determining the overall process of taxation of people who are involved in this course of the work process.
PF and ESIC: PF and ESIC are one of the major components that deduct a certain amount of money from the salary of an individual with their due content that acts as a deposit for their future. It is one of the major components of assessment that helps in determining the tax compliance of other people.
Service tax: Service tax is one of the major determinants of the taxation levied on people (Noviana, 2019). This tax is paid for a certain amount of services from different sections of the work process.
These compliances are required to be amended lawfully as a measure of taxation. The Houzit Pty. Ltd. abides by the aforementioned statue\tries and they are required to comply with the aforementioned aspects as the measure of requirements for regulation laid down by the government. Compliance with the aforementioned aspect helps the company to avoid the intervention of the government in organisational affairs. The liability of the taxes of this company is assessed based on the tax law that is applied to the company. The financial statements of this company are assessed according to the standards of the AASB.
The tax is thereby assessed on the net income that is gathered after deducing the necessary expenses. The company is currently not applying the industrial wage tax. The payroll tax of this company is 4.5% of the wages benign paid in each quarter, in the 2011 session it was $90, 511 (case study). Hence, they need a thorough assessment of the payroll. The company currently follows the company tax policies. "Company gain tax” is determined according to the long-term gain that is attained by the company. The company tax is 30% of the net profit being paid before each quarter (case study) The Company also pays "goods and service taxes". The company paid $987,626 of GST in the 2010-11 sessions (case study). The company adheres to all the legal norms associated with the financial system of the country.
The entire course of budget analysis states there has been some outstanding payment associated with the events of business process and financial transaction. However, a steady growth has been noticed throughout the course of the sales growth that further emphasis the aspect of business growth and development for the company. Measures have been undertaken by the organization to assess the resources properly and derive proper assessment for the steps associated with overall business growth and sales generation. This aspect highly emphasizes the notion of the effective finance and resource management prevalent in the organization
2. Identify the current compliance requirements and liabilities for this organisation under the Corporations Act 2001.
There are certain measures taken up by the organisation to pay the taxes that come under the norms of the corporations' act of 2001. The "proprietary limited" is one of the prominent aspects to consider in this section (Unerman, Bebbington & O'dwyer, 2018). Under this section, the organisation is required to comply with different compliance tools to avoid legal concerns. One of the major concerns in this section is ASIC; the proprietary is required to comply with certain compliance tools to avoid certain compliant tools. These auditing standards follow the standards of the auditing process that will govern the accounting and financial policy prevalent in this organization.
The Corporation Act mandates that the organization ought to appoint an auditor to audit the accounting process of the company along with the financial statement. This can be done to avoid any kind of fallacies and mismanagement in the accounting process prevalent in the organisation. This is highly helpful in adhering to the standards laid down by the organisation. Proper auditing helps in the effective management of the organization.
Compliances stratgeis are aligned with the courses of business process that aligns with the business models that governs overall work process of the organisation. Therefore, necessary measures are to be taken up by the organisation to put up measures required to take the business to new heights of success. This can be attained by proper strategies that can be adopted for business growth. Compliances with the corporate act of 2001 ensure effective work culture and legal course of work process that abides by the norms and law laid down by the government. Companies are required to maintain proper course of financial atonement with the business policies. The measures adopted by Houzit are highly effective in deriving conclusive measures for business policies.
3. Review commercially available financial management software to select the most suitable software for Houzit Pty Ltd
Effective financial management software aids in the proper course of evaluation and monitoring of the financial aspects prevalent in the organisation. The "FM" software of this company, Houzit pty. Ltd. utilises effective measures in recording the transactions benign conducted by this company which is maintained accurately and in a timely order. Different financial management software has been considered that are mentioned as follows:
- MYOB: This particular accounting system is a single-user processing unit. This is an entry-level business manager, mostly suitable for micro businesses (Kristanto, & Kurniawati, 2020).
- XERO: it can be utilised as an online accounting software associated with various business owners. This software aids in identifying the real-time cash flows of the organisation and it gives away additional features like invoices and financial quotes (Rahmayanti & Rahmawati, 2020).
- Excel: It is the most complete accounting software available for any format of business organisation. This software is widely used all around the world. Excel helps in solving complex financial calculations in no time and the ease of access is highly helpful in time and skill (Guerrero, 2018).
Software recommended for Houzit:
In consideration of the aforementioned software, Houzit ought to use XERO and apply it to its financial assessment. This software will enable the company to access real-time values of the associated cash flow from this organization (Johnson et al. 2020). This particular accounting software will also help the company to stay updated on all the financial transactions being committed by the employees involved. The current account software can be readily replaced by this software and the associated add-on ought to be done to enhance efficiency in the organization.
4. Explain how you can apply the following principles of accounting in developing the budgets required for this task:
- Matching principle: It is associated with the principle that ponders around the expenses that ought to be recognised in a period when the associated revenues are also being reviewed (Barker et al. 2020). The company utilises this principle to maintain transparency in the organisation.
- Account groups: It is referred to the summary of accounts depending on the criteria of how master records are generated and the numbers are determined in certain intervals. In preparation for these financial records, the company can take note of past information as well.
- Periods: Periods in the accounting groups will help separate and gather results that were recorded in different frames of time associated with the company. The derived results will further be evaluated in decision-making processes.
5. Explain and discuss the implications of probity when preparing and revising budgets.
Certain things ought to be considered for formulating a budget. A budget governs the overall course of work process prevalent in the organisation and also caters to the basic needs of the employees.
- Ethics: Ethics has been associated with the evidence of ethical behaviour that can be determined as confirmed and complete integrity, honesty and uprightness associated with the course of budgeting (Mahaputra & Saputra, 2021).
- Responsibility: Responsibilities are related to the adoption of innovative approaches and need internal expertise in the course of preparation and revision of the budget for estimation and forecasting.
- Decent: this mechanism is associated with applying probity in the overall budgeting process and it shall be applied decently. It should not be avoided under any circumstances.
- Conflict of interest: In order to avoid the COI, the officials and the manager should be unbiased. The COI ought to be managed effectively by the management (Pecino et al. 2019). The officials should not be accepting personal benefits.
6. List the critical dates and initiatives that will require or generate resources for Houzit Pty Ltd in the next financial cycle
The planning of the financial cycle gives a brief layout of the assessment of the schedules that ponder on the busy and slow periods of production. In the months of January, May and October necessary measures are to be taken associated with the market conditions to ensure proper growth. The dates mentioned in the budget cycle will help in deriving the periods that are important in the next accounting cycle. This analysis helps the organization assess the current state and formulate a strategy accordingly. It will further help in resource allocation to different departments and subdivisions.
7. List the items you would recommend for inclusion in the budgets for Houzit Pty Ltd.
- Pension: pensions that are provided by the company will be considered a major move towards employee benefits. The pension system will be considered a major company expenditure.
- Healthcare: healthcare benefits and the aforementioned pension system will be highly effective for the organisational policy. It will ponder on the utilisation of Maslow’s hierarchy of needs that would motivate the ambience of the workplace (Hopper, 2020).
- Travel: Travel expenses for business purposes and additional professional engagement are required to be included in budgets properly.
- Training fees: Training and education programs are one essential component for employee retention and skill engagement of employees within the organization. It is highly helpful in enhancing overall organizational output.
8. List the new or modified internal controls that could improve risk management for Houzit Pty Ltd including the maintenance of audit trails.
The internal control to improve risk management includes:
- Petty cash: These are referred to the small amount of money and bills that a company keeps in hand for small business transactions and outlays (Pratama, Ekasari, & Indrawan, 2022).
- Refund: It is referred to the policy that when the company has to pay back the entire amount received due to a faulty course of the transaction an effective refund policy instils a bond of trust that is essential for business.
- Cash control: it is one of the essential aspects of cash management of the organisation (Hu, Li, & Zeng, 2019). This policy helps in maintaining cash and associated policies in the organisation.,
- Resource ordering: Resource management is one of the essential aspects to be considered in any business model. Resource ordering and evaluation are highly important for formulating business strategies.
- Resource transaction: It is a key aspect to be considered in this course of business. The resource transaction is highly necessary for tracking the resource gained and outsourced in a business structure and its impact on the overall work process of the company.
- Audit trails: This is the most important factor to consider in the financial management policy (Carcary, 2020). It helps in maintaining strict governance of the financial transactions carried out by the organization.
- Guerrero, H. (2018). Excel data analysis: Modeling and simulation. Springer. Retrieved from: https://books.google.com/books?hl=en&lr=&id=V3B_DwAAQBAJ&oi=fnd&pg=PR9&dq=Excel&ots=Z5V2yXLmBB&sig=XtbJwplY9q1lTIkO5Zaho8oebmQ
- Barker, R., Penman, S., Linsmeier, T. J., & Cooper, S. (2020). Moving the conceptual framework forward: Accounting for uncertainty. Contemporary Accounting Research, 37(1), 322-357. Retrieved from: https://ora.ox.ac.uk/objects/uuid:d4d18781-90f7-4bcf-b0e2-5711ba366bc6/download_file?safe_file=Barker_and_Penman_2020_Moving_the_CF_forward.pdf&file_format=application%2Fpdf&type_of_work=Journal+article
- Carcary, M. (2020). The research audit trail: Methodological guidance for application in practice. Electronic Journal of Business Research Methods, 18(2), pp166-177. Rerieved from: https://www.academic-publishing.org/index.php/ejbrm/article/download/2033/1940
- Hopper, E. (2020). Maslow’s hierarchy of needs explained. ThoughtCo, ThoughtCo, 24. Retrieved from: http://www.christianworldmedia.com/client/docs/603_1585079540_17.pdf
- Hu, Y., Li, Y., & Zeng, J. (2019). Stock liquidity and corporate cash holdings. Finance Research Letters, 28, 416-422. Retrieved from: https://translateyar.ir/wp-content/uploads/2020/08/Stock-Liquidity.pdf
- Johnson, D., Tizard, J., Damian, D., Blincoe, K., & Clear, T. (2020). Open crowdre challenges in software ecosystems. In 2020 4th international workshop on crowd-based requirements engineering (CrowdRE) (pp. 1-4). IEEE. Retrieved from: https://openrepository.aut.ac.nz/bitstream/handle/10292/13807/Requirements_from_the_Crowd_in_a_Software_Ecosystem-2.pdf?sequence=2
- Kristanto, S. B., & Kurniawati, H. (2020). Testing The Information System Success Models Through Myob Accounting Software. Perspektif Akuntansi, 3(2), 167-177. Retrieved from: https://ejournal.uksw.edu/persi/article/download/3023/1596
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- Noviana, C. A. (2019). the Effect of Tax Knowledge, Service Tax Authorities and Tax Penalties Firmness of Compliance in Meeting Their Income Tax Liability With an Awareness of Paying Taxes As an Intervening Variable. JTAR (Journal of Taxation Analysis and Review), 1(01), 96-117. Retrieved from: http://ojs.stiesa.ac.id/index.php/jtar/article/download/93/48
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- Rahmayanti, A. Y., & Rahmawati, D. (2020). Digital accounting for small to medium enterprises using mobile applications. In 3rd International Conference on Vocational Higher Education (ICVHE 2018) (pp. 172-176). Atlantis Press. Retrieved from: https://www.atlantis-press.com/article/125938359.pdf
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