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    Assessment Task 1 - Prepare Budgets Case Study - Houzit: BSBFIM601 Manage Finances

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    Memay Methawee
    The document provides a case study and tasks for managing the finances of Houzit Pty Ltd, a growing home improvement retail chain. It outlines reasons for past profits, current tax liabilities, recommends suitable financial management software, discusses implications of probity in budgeting, lists critical dates and initiatives requiring resources, recommended budget items, and proposes new internal controls to improve risk management. Xero financial software is recommended as most suitable as Houzit anticipates having over 250 employees within 5 years, and Xero is designed for small to medium-sized businesses.

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    Assessment Task 1 - Prepare Budgets Case Study - Houzit: BSBFIM601 Manage Finances

    Uploaded by

    Memay Methawee
    153 views2 pages
    The document provides a case study and tasks for managing the finances of Houzit Pty Ltd, a growing home improvement retail chain. It outlines reasons for past profits, current tax liabilities, recommends suitable financial management software, discusses implications of probity in budgeting, lists critical dates and initiatives requiring resources, recommended budget items, and proposes new internal controls to improve risk management. Xero financial software is recommended as most suitable as Houzit anticipates having over 250 employees within 5 years, and Xero is designed for small to medium-sized businesses.

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    Assessment Task 1

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    The document provides a case study and tasks for managing the finances of Houzit Pty Ltd, a growing home improvement retail chain. It outlines reasons for past profits, current tax liabilities, recommends suitable financial management software, discusses implications of probity in budgeting, lists critical dates and initiatives requiring resources, recommended budget items, and proposes new internal controls to improve risk management. Xero financial software is recommended as most suitable as Houzit anticipates having over 250 employees within 5 years, and Xero is designed for small to medium-sized businesses.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    153 views2 pages

    Assessment Task 1 - Prepare Budgets Case Study - Houzit: BSBFIM601 Manage Finances

    Uploaded by

    Memay Methawee
    The document provides a case study and tasks for managing the finances of Houzit Pty Ltd, a growing home improvement retail chain. It outlines reasons for past profits, current tax liabilities, recommends suitable financial management software, discusses implications of probity in budgeting, lists critical dates and initiatives requiring resources, recommended budget items, and proposes new internal controls to improve risk management. Xero financial software is recommended as most suitable as Houzit anticipates having over 250 employees within 5 years, and Xero is designed for small to medium-sized businesses.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    BSBFIM601 Manage Finances

    Assessment Task 1 – Prepare budgets

    Case study – Houzit

    1. Identify the reasons for previous profits and loss


    Houzit has grown over the past 5 years from a single store to the current chain. Houzit prides
    itself on superior after sales service which has been a key reason for the continued growth in sales
    and corresponding profit increase. Profits are to be build on a growing base which generate loyalty
    sales.

    2. Identify the current statutory requirement for tax compliance and list and calculate
    the tax liabilities for Houzit Pty Ltd under taxation legislation
    The statutory requirements are:
    - Superannuation is 9% of wages and salaries for cash each quarter.
    - Payroll tax is 4.75% of wages and salaries for each quarter.
    - Workers compensation is 2% of wages and salaries for each quarter.
    - Company tax is 30% of net profit before tax for each quarter.

    3. Review commercially available financial management software to select the most


    suitable software for Houzit Pty Ltd. Ensure you diagnose software options by
    comparing two commercially available software and outline the reasons that lead you
    to this recommendation
    MYOB is cloud business management software tailored to mid-sized organisations. A single
    unified platform, MYOB delivers finance, inventory management, manufacturing and payroll
    functionality
    Xero is a simple accounting software solution for sole traders and small businesses. It
    allows users to take care of basic accounting needs such as automating some ordering and stock
    processes, creating purchase orders and managing expenses. At a cheap price. Xero also accepts
    online payments such as debit and credit cards, and payment gateways such as PayPal from
    invoices.
    Houzit are anticipating that within next 5 years they will have over 250 full-time staffs. They are
    considered medium size business, so the most suitable software for Houzit would be: Xero
    - Xero software designed for small and medium size business owners and accountant.
    - Available on any mobile device or computer with an internet connection.
    - Information of business finance and cashflow are real-time update.
    - Security and protect customers information

    4. Explain and discuss the implications of probity when preparing and revising budget.
    Probity referred as the evidence of ethical behaviour and can be determined as complete
    integrity. Honesty, honour and integrity all mean uprightness of action or character. The
    responsibility requires internal expertise in the process of preparing and revising the budgets for
    estimation and forecast purpose of management. Probity in budgeting process shall be applied
    decently and sensible. It should not be utilized for avoiding reasonable discussion.

    5. List the critical dates and initiatives that will require or generate resource for Houzit
    Pty Ltd in the next financial cycle.
    - A new luxury car will attract a luxury car tax.
    - Reduction on the principle of the loan by a payment of $100,000 on the 31 December 2011 from
    the profit generated by the business.
    - Reduce the expected gross profit rate by 1% on the 2010/11
    - Increase the advertising budget by $70,000 over the 2010/11
    BSBFIM601 Manage Finances

    - Increase wages and salaries by $172,500 over the 2010/11


    - Compare a debtor analysis to reduce cash tied up in outstanding debts.

    6. List the items you would recommend for inclusion in the budgets for Houzit Pty Ltd.
    - Healthcare facilities provided to the employees of the company need to be included in the
    expense items of the company.
    - Training fees should be considered as an administrative expense for the company fpr making its
    employee efficient and suitable for the job.

    7. List the new or modified internal controls that could improve risk management for
    Houzit Pty Ltd including the maintenance of adult trails.
    The internal control that could improve risk management for Houzit.
    - Petty cost
    - Refund
    - Cash control
    - Resource ordering
    - Recording transaction
    - Audit trails

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