Financial Management. Assessment Essay Example

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The importance of Workplace Review

Workplace review is a strategic management practice that is part and parcel of organizational success. It provides useful information concerning certain aspects of business operations to the management. Since continuous improvement is an objective for all firms, it is critical that managerial issues are tackled through the review and evaluation process. In the context of financial planning, workplace review is used as a tool for managing resources of the organization. It should be noted that these resources are not just the financial or physical ones, but also the human resources. One of the importance of workplace review and evaluation is that it enables the business to improve its services it offers to customers. The performances of the customer service system are gauged against the set measures and targets then feedbacks are used to ascertain whether improvement has been made. In addition, the review and evaluation allows the management to accountably ensure that resources are allocated to the most profitable projects. Another important benefit is that it facilitates the development process of the financial plan since adjustments are usually made to the plan in order to meet the current and the future needs of a company.

The health and safety programs improve the financial performance of a business. The benefits of ensuring that employees work in a safe environment cannot be underestimated. In order to understand the benefits that how health and safety relates to the financial performances, it is important to discern what constitutes the health and safety aspects. In various studies, it has been found that employees are usually exposed to certain risks. To start with, they are exposed to the risk of high temperature. Empirical investigations indicate that employees’ performance declines with increase in temperature within the organization. Therefore, very high temperatures that results from squeezed spaces and a high population within the workplace cases stress, thus reducing the ability of an employee to maximize his/her productivity. It can be said, therefore, that incorporating temperature regulating equipment in the workplace would produce a conducive working environment and employees will be able to increase their output. Consequently, the overall revenue grows.

Furthermore, ventilations also deteriorate the workers’ health. In workplace where there are no sufficient ventilations employees may end up suffocating, thereby affecting the volume of output as a result of reduction in the size of workforce. It is worthy to note that insufficient ventilation reduced memory concentration also, thereby affecting productivity. In addition, the welfare of the employees affects their performance by influencing the extent of exposure to welfare risks. The sanitary and washing facilities must meet the regulatory standards so as to minimize these risks. Otherwise, exposure to these risks may affect the performance of the workers, and so is their productivity.

Generally, there are many factors that relate to health and safety that influence the financial performance. The financial performance is affected through influencing the productivity of employees and the public relations of the company.

Analysing the Effectiveness of Financial Monitoring and Planning

The effectiveness of the financial monitoring and planning can be assessed through an analysis of a cost-benefit analysis. A strategy becomes effective if its benefits outweigh the cost of formulating and implementing it. Its effectives is realised when the process of financial monitoring and planning lies within the resource capability of an entity. It is for this reason that many businesses that sufficient resources-capability find it difficult to adopt this strategy.

Another way of analysing the effectiveness of financial monitoring and planning is whether it meets the financial goals of the organisation. If the goals are to enhance efficient allocation of resources, to reduce fraud, track operating and expenses and identifying and unnecessary expenditure, then the management has to evaluate the process and ascertain whether these goals have been met. An effective financial monitoring and planning system must be able to meet such goals and objectives in the long run. It must secure the transactions of the firm so that it may be able to expand and grow.

How to Monitor Improvements made in the Monitoring Process

One of the ways to monitor the improvements is through the use of financial ratios. These ratios are very crucial in evaluating the financial performance of a business. The management of the business should be able to understand the most important ratios that would be useful in monitoring their financial and auditing goals. The ratios such as the liquidity ratios would enable the management to ascertain suspicious issues such as fraud, misappropriation of resources and other fraudulent activities that must have reduced their liquidity levels. Furthermore, the ratios allows the managers to follow up figures closely and identify operational issues that might result to high expenditure. Therefore, generally, a company is able to figure out whether it is underperforming or not through the use financial ratios.

Another important tool is of monitoring improvement is a budget. A budget is an economic estimate of business’ income and expenditure. It is usually used as a tool for controlling business activities so as to ensure that all activities are within its resource capability. In monitoring n improvement, the actual performance should be compared with the budget performance. If the actual performance if greater than the budget, then there is a performance issue and it should be investigated. On the other hand, if the actual performance is less than the budget performance, then the company is headed towards the right direction. The favourable performance variance is important to a company. However, in order to validate this technique of monitoring improvements, the management should ensure that the budget performance is not over or underestimated. Hence, the budget should reflect reasonable estimates.

Defining Terminologies

Bilateral or regional trade agreement: A bilateral agreement is a trade agreement between two nations only. It is usually conducted to create and strengthen the mutual relationship between two countries. Regional trade agreement can be bilateral or multilateral.

International Commercial Terms (INCOTERMS): These are contractual agreements that are developed by the chamber of commerce of each country to facilitate international and domestic sales of goods and services.

Competition and Consumer Act 2010: In the Australian Consumer Law, the Competition and Consumer Act 2010 is the regulatory provision that control competition activities among businesses so as to protect the consumer against exploitation. The Act gives effect to the matter regarding payment, consumer agreement, warranties and unscrupulous trading.

Warsaw Convention: It is a term that is used in international trade which refers to an agreement among countries that governs the liability of international carriage of luggage, people and goods.

World Trade Organisation Determinations: This is an organisation that solely drafts rules and regulations that govern international trade.

Australian Tax Office Requirements in Goods and Service Tax, Company Tax and PAYG

  1. Goods and Service Tax

The Australian Tax Office defines the GST as a broad-based tax of 10% on most consumer goods and services. The tax authorities requires that business to have a strong internal control system that would help to facilitate the tax collection process. The internal controls are important in ensuring that the financial statements reflect a true and fair value of a company’s financial position. The Australian Tax Office requires businesses to check their reporting periods, not to report negative figures or use symbols such as + and -. One can submit BAS annual returns.

  1. Company Tax

The Company Tax requires that companies should submit their annual returns so that they can be taxed. The non0resident companies and resident companies are taxed at the same rate. This section also requires companies to have a strong internal control system so as to avoid fraudulent activities in the financial statements that are aimed at reducing the tax burden of the company. In order to complete tax returns, the Australian Taxation Office requires companies to provide information regarding the schedule that the companies may plan to submit returns. It also requires them to ensure that they have details of record-keeping. Tax return forms is required by the ATO from companies.

The Australian Tax Office requires that employers have the responsibility of assisting employee to meet their tax burden. Therefore, the internal control system that monitors the payroll process should ensure that it is strong enough to be able to with-hold taxes that are deducted from employees’ salaries. Also, the employees are supposed to give each employee summaries of their statements so as to sow the payments made to the tax authority. The form that is filled and submitted to the ATO is the PAYG form.

Guidelines of Businesses Operating in Australia

Whilst operating in Australia, it is imperative for the owners to understand the excise duty requirement by the Australian Law. Holders of the international trade licence are required to calculate the excise liability, lodge returns and finally pay the duty. The guidelines regulating importation and exportation operates in periodic settlement approach. The periodic settlement permission applies when the excisable goods and brought into Australia for domestic use over a given period of time and it allows deferment of the duty. The lodging of the excise returns can be done anytime within the settlement period, and this makes it a favourable factor. Moreover, you are not eligible to lodge excise returns until you are registered for excise payment.

Discrepancies in Transactions

There are discrepancies in transactions that occur in fact field of letter of credit transactions. One of them is where unoriginal documents are reflected as original. Another one is where document do not match each other. There is also the issue of fake signatures or even lack of signature. The other one is late presentation of documents necessary to facilitate transactions. These are discrepancies related to documents.

The discrepancies related to invoice include differing shipping terms of agreement, inconsistent terms of payment, wrong figures and shipping marks differing from transport documents. There are those that relate to insurance, such as improper endorsement of insurance certificate, undervaluation of property during insurance contract and issue of certificate when the contract has already expired.

The discrepancies can mitigated in various ways. Firstly, early communication should be made between parties in case any unusual activity occurs. Also, the documents can be amended to reflect the true picture of the transaction. In addition, the information systems should be adopted to prevent a he number of discrepancies.

Proactive Management Consultant

  1. Cash Sales Income for May-August
Total sales

Note: The actual sales in May is given as 42,100 and this is distributed across the other months with respect to the percentages of accounts receivable given (60%, 30% and 10%).

  1. Financial Reports

Provided in excel sheet

  1. Data analysis and recommendations

The financial reports show that the estimates of the organisations were not in tandem with the actual results: the total income had a 2% variance though there was a reduction in the first month of the quarter. In the second quarter there was a 9% increase in the total income. The total expense in the first quarter was no different from the estimated amount compared to the 1% increase in the second quarter. However PMC experienced a growth in their net income with a 761% increase in the first quarter and a 21% increase in the last three months. In the first three months, PMC had undervalued the sales volume while the services revenue was overvalued in their budgeting of the first quarter. The positive net income results could be a result of the reduced expenses. This revenue can further be reduced if the expenses are kept at minimum. The postage and delivery, and telephone charges were more than the expected amount and recorded the highest variance; therefore it would be advisable if the organisation invested in cheaper postage means as the emails. If the management used email more than telephone communication, the postage and telephone charges are expected to be reduced by 50% in all months. The email services should be set up in October and it would not cost the company any extra charge for set up. Ultimately, we expect that this efficiency will be realised in November and December sales revenue through a 2% increase.

Though PMC had expected large invoicing in the month of July, the sales volume fell short of this expectation. The sales volume was 3% more than the expected in first quarter while in the second quarter, sales volume rose by 8%. It is therefore recommended that if the sales volume were to increase, the company should add more funds into aggressive advertising. The low sales could also be a result of the inefficiencies of the workers hence putting aside funds for the training of the employees would not hurt the business. As part of this recommendation I therefore suggest that the aggressive advertising campaign be implemented as planned. Further to this, the plan can be implemented earlier in august instead of October and implemented in phases. This is expected to impact the sales by 10% increase in sales for each month following the implementation. The implementation in phases will reduce the financial burden on the management. However, the campaign would result in expenses being incurred in training and hiring two consultants. Instead of two consultants it would be effective if the company took in one. This will reduce the payroll expense by 50% In light of the profit analysis; the upgrading of computers for better productivity would enhance sales. We anticipate that having the upgrade would increase service revenues by 5% if implemented in September.

The rent charges can be further reduced if the company were to engage in a contractual agreement with a lessor. This is beneficial in pegging the rent amounts to a fixed amount. We recommend that they make a contract that makes the rest charge to be fixed at $3,000 which is lower that the current $3500.