AFIN253 Financial Management

Financial plans are framed based on the expected cash inflows and outflows expected to arise from the business activity. Any major deviations from the same can potentially result in cash crunch and lower the overall efficiency of such plans. As a result, monitoring of these plans assumes importance. One of the critical aspects is to carry out a workplace review in context of complying with the relevant OH&S regulations. Not only does the review enable compliance with the relevant legislation but also ensures that the efficiency and performance of the employees is not adversely impacted.

It is imperative that employees must be provided a safe and secure ambience to work as failure to do so would result in mishaps. In such cases, injuries may be sustained by employees which would result in decreased workforce and increase in financial liability for taking care of the injured employee. Also, failure to ensure the workplace safety and health of the workers by following relevant guidelines related to particular profession, the morale of the workers would be adversely impacted thus leading to issues such as absenteeism, higher turnover of employees and lower productivity. These would have adverse impact on the financial performance of the organization.  Also, it is noteworthy that implementation of various training and other measures so as to meet the regulations could be costly which would result is lack of financial resources for other key activities.

With regards to evaluation of the effectiveness of financial planning and monitoring, it is imperative to analyze whether the end objectives have been met or not. In this case, variance analysis is a useful tool as through the use of financial planning, a tentative budget may be created with regards to the usage of resources and the amount of profit generated. Once a financial plan is in place, monitoring is done in order to minimize deviations and ensuring that delays and cost overruns are minimized. The key test of efficiency of the financial plan is in the form of underlying realistic estimates considering the various internal and external factors while the success of monitoring lies in reducing any deviations and overcome bottlenecks.

Any improvements in the monitoring of procedures would result in higher incidence of adherence and lower default rate with regards to the correct procedure not being followed. Further, it is essential to realize that monitoring tends to have cost and hence any improvements which lead to lowering of costs would be considered as valid improvements. A case in point could be the use of technology such as CCTV to ensure that the requisite procedures are being adhered to. Further, IT can also be used to ensure that in various services, the due process is followed as the work would be completed only if a particular sequencing of key steps is followed. Hence, it is imperative that such measures should be considered and also benchmarking of these with relevant industry practices may also be done.

1. When trade agreements are executed then these are called as bilateral while when the same is executed amongst country situated in a particular region, then it is called regional trade agreements. An example of a bilateral trade agreement is between Australia and China. An example of regional trade agreements is NAFTA. Trade agreements are enacted in order to facilitate as the tariff and non-tariff trade barriers are eliminated which increases the price competitiveness of goods and services and promotes free trade at the cost of other trading partners.
2. Incoterms or International Commercial Terms are given by ICC or International Chamber of Commerce and seek to be applied to different trade contracts and determines the rights and responsibilities of the buyers and sellers. It tends to bring about uniformity in trade terms which tend to uphold the generally agreed principles of fair trade.
3. The Competition and Consumer Act 2010 seeks to replace the archaic Trade Disputes Act 1974. The primary intention behind this federal legislation enacted in Australia is to enhance the competition while ensuring that the interest of consumers is safeguarded. Under this act, suitable remedies ae offered for aggrieved customers who have been victims of unfair practices or unethical treatment on part of the sellers.
4. Warsaw convention is related to the unification of relevant norms that are related to international carriage facilitated through air travel. It tends to define the various liabilities applicable on the carrier and also highlight the various documents of carriage that may be required by the passengers. Also, this convention frames rules with regards to the maximum time period during which claims may be mad against the carrier and also the quantum of the same.
5. WTO replaced GATT in 1995 and is the premier body responsible for regulation of international trade and promotion of free trade. It brings together the representatives of the various nations and provides them a platform whereby common policies can be framed. Even though the organization has not led to any international treaty being signed but still the role played by the organization in ensuring consultations between nations on matters of trade cannot be undermined.
6. Internal control procedures need to record the various available transactions and list down the tax implications in relation to income tax or GST. This maintenance of transactions and relevant ledgers tends to ensure that there have been no errors made in the recording of data. This eventually would allow the company to report the various tax statements in a prescribed format within the specified deadline by the taxation department.
7. The reporting period for all the three is quarterly.
8. The relevant form for GST and PAYG is BAS or Business Activity Sheet. The relevant form for income tax is NAT 0656-06-2016.

In this process, the concerned business entity needs to deal with both ATO (Australian Taxation Office) and DIBP or Department of Immigration and Border Protection. The various guidelines for businesses are as follows.

• Relevant import and warehouse declarations need to be made to the DIBP. This must be done either using a customs form or Integrated Cargo System (ICS). Before moving the imported goods to a customs warehouse (licensed), it is mandatory to fill lodge a declaration using N20. In order to free the goods from the customs warehouse (licensed), N30 declaration has to be made.
• Customs and excise duty needs to be paid and reporting in accordance with the periodic settlement permission system where the length of the period would be determined by the ATO. This system prevents businesses from lodging returns related to excise and duties paid on a daily basis and instead report it at the end of the relevant period duration.
• The settlement period would typically be a week or a month. Monthly reporting is to be done on the 21^stof every month while weekly reporting needs to be done before the close of the next business day after the week is over.

The various discrepancies in business transactions that are not acceptable are outlined below.

• Collection of revenue in cash with the intention of non-declaration of income.
• Under-reporting of revenue and over-reporting of the underlying costs.
• Not enacting the businesses at arms length transactions
• Lack of auditable trace in the form of valid invoices and other documentation in relation to every transaction.
• Material errors in recoding of revenues and costs associated with business transactions.

In order to avoid the discrepancies, the businesses can take the following measures.

• Strengthen the internal controls which ensure that due processes are followed and also aid in detection of discrepancies and subsequent rectification.
• Usage of relevant software packages and IT enabled tools in enacting business so as to reduce the chances of human error and fraud.
• Periodic internal audit also aids in the process.
• Maintenance of appropriate records for the various transactions in the prescribed format which aid detection.