Financial Management Software, Responsibility Accounting And Budgeting

Discrepancies

Discrepancies

Budgeted	Actual	Variance
1382032 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	1623000	240968.2
624876	701400	76524
752189.4	921600	169410.7
780	780	0
1590	1590	0
600	600	0
550	550	0
1300	1300	0
418000	465000	47000
850	850	0
1650	1650	0
560	560	0
25000	25000	0
560	560	0
370	370	0
1405	1405	0
210	210	0
600	600	0
454025	402000	-52025
298164.4	321000	22835.65

 The major discrepancies as can be seen for the table are due to the variation in the sales, purchases and the payroll. Due to the variation in these changes the total expenses have seen a negative change.

The discrepancies in the sales are due to following reasons

The closing stock might have been added to the sales, the volumes have increased with the increase in the production, the number of units have been produced due to increase in the demand from the customers and lastly the business have expanded its product line or new products in the market. The discrepancies are of positive nature (Sidhu and Mather, 2017).

Recommendations

After analysing the discrepancies there are certain recommendations that can help in removing the discrepancies. The sales might have shoot up but the company needs to make a control of underlying stock for a long time. It is also advised to keep a quarterly check on the movement of the sales. The entries and the accounts must be scrutinised on the daily basis. The reports shall be generated department wise to find out the variance and lastly the salaries and the wages shall be given according to the work done.

Basis	Banner Finance	Oracle	SAP BPC
Price	$1000	$800	$1400
Usability	Easy to use	Moderate	Simplest
Features and Functions	Tax management Cash management Project management Currency management	Bank reconciliation Project Accounting Expense tracking Billing and Invoicing Budgeting and Forecasting	Customer driven Financial Reporting Consolidation Cash Management Investment Management
Compatibility with other programs	Supportive and compatible	Easily compatible	Highly compatible
Compatibility with other specialists	Moderate	High	High

The above table represents the data of the financial management software. In my opinion SAP is the most accommodating software because of its Pros and Cons.

It consolidates three to four systems simultaneously and overall the, give important information to the managers. On the contrary the biggest demerit is usage of the big amount of red connection and requires enough ram and size to operate. Banner finance on the other hand is easy to sue and navigate and gives the consistent reporting to the managers.  But it has a demerit of the customisation of the fields and SIS if the process of the business demands it. Lastly the web based Oracle is also one of the easy software to operate yet it is not fully developed. Therefore it is recommended that the company shall go for the banner finance to manage the budgets and the inputs and outputs of the resources (Shelton and Sharma, 2018).

Responsibility Accounting is mainly the controlling system which is responsible for the assignment of the costs and its control. The people are assigned to keep an eye over the cost and manage the performance of the same (Wei, et al 2014).

Revenue: The purpose of the revenue budget is to establish whether the whether enough cash is available with the company to conduct its normal operations, maintains the growth of the business and the expansion. These budgets are prepared on the basis of the projected income and shall be reviewed on the regular basis.

Recommendations

Expenses: The main motive of the expenditure budget is to track the purchases made and to operate the costs and limit them in the best possible manner. To maintain the expenses is an important activity to keep a safe amount for the future contingent obligations.

Cash: The cash budget of the company puts the inflow and the outflow of the cash in detail for a particular period which may vary from quarter to month to year.  Apart from this cash budget showcases the position of the firm in terms of cash. It also helps to predict the cash surplus or to permit proper utilisation of cash.

Capital: Capital budget is the budget made up of capital receipts and payments and helps in incorporation of public Accounts. The main purpose of the capital budget is to properly allocate the funds for fixed assets such as land buildings and equipment and develop the long term goals that are essential for the prosperity and the growth of the business.

To plan and prepare the budget the information required is the availability of the funds, assumptions on the basis of the past year, relevant costs and requirement of the budget package, forecasts of revenue and other departmental budgets.

The 13 factors that are to be considered while preparing the budget are

Income, Costs, Balance, Goals, Technology, Banks and Financial Institutions, Laws, Economic situations, Demands from the customer, Surrounding Infrastructure, Sources of funds, Needs of the investment, and environmental factors.

Capital Investments: Capital Investments can also be termed as the acquisition of the fixed assets and the capital assets that are utilised for the purpose of increasing the productivity of the business. The sources are not restricted to the capital investment and can always include the equity investors, banks, financial institutions and a lot more. In relation to the budget the amount can be less than $100000 can extend till millions for the assistance in the capital sectors like infrastructure, mining and utilities.

Capital Expenditure

Capital expenditure in the simpler language is the expense that is incurred with the thought of having the capital benefit in future. In relation to the budget the capital expenditure can be termed as the funds which are required to enhance the value of the fixed assets such as the property, equipment, machinery or building (Liao, Lin and Lin, 2016).

Cash Flow

Cash flow means the expense or the revenue that results in the variation of the cash account over a particular period. Cash inflows usually occur due to the operating, investing or financing activities. Cash flows are generally associated to the particular projects or deals of the business and can be a mark of the financial performance of the business (Smith, Driver and Matthews, 2018).

Financial Management Software

Break Even

Breakeven analysis is the unique tool which showcases a difference between the revenue and the expenses. This tool helps in stabilising the expenditure and initialising the income for the future prospects.

Gross Profit margin of the company is calculated in terms of the percentage over the sales value. The gross profit of the company us also dependent on the operating costs of the firm. The gross gives the basic outlook of the trading activity and helps the investors to understand its aspect differently (Kaplan and Zingales, 2010).

Risk Management is an important variation in the planning and the preparation of the budgets of the firms. The risk management is the unique tool for the assessment of the risks that can be more potential and needs more attention. The risk assessment prioritizes the issues into the most impacting and the less impacting (Bessis, 2015).

Financial Reporting cycles relevant to the industry

The financial reporting cycles that are relevant to the industry are the cash conversion cycle, the inventory cycle, the receivables and the payables cycle.

The two major capital investment evaluation techniques are net present value, internal rate of return. Under the NPV method the present value of the cash flows is calculated to determine whether the project is worthy to buy or not. The IRR on the hand is the rate which is used to estimate the profitability of the potential investments.

The following are the benefits of the participative budgeting  Kopel and Riegler, 2017).

• This process helps in improving the accountability and the transparency in making the budgets public.
• The citizens feel empowered to make active participation in their communities
• The government became highly efficient and helps in reduction of the corruption.

The steps taken to effectively implement the budget into a team environment are to keep a track of the expenses. Setting up of the meetings and the demo shall be given to the employees to make and create the budget.

Incoterms means the particular set of the rules defining the responsibilities of the buyers and the sellers with regards to the delivery of the goods under the sales contract. These rules are published by the ICC also known as the International Chamber of Commerce. Mostly used in the commercial transactions.

Departure (Group E) fca – Free Carrier

It is a term of the trade under which the seller is responsible for the delivery of goods to a particular destination (Stapleton, Pande and O’Brien, 2014).

Main Carriage Paid by seller ( group C )

CIF cost insurance and freight

Cost and freight are those expenses which are paid by the seller in order to bring the goods to the destination.

Responsibility Accounting

Arrival (Group D)

DAF Delivered at Frontier

It is the duty of the seller to deliver the goods when they are available, cleared for export to make it reach to the particular frontier. It is the obligation of the seller.

Trade Practice Act is the Act determined by the government of Australia to operate the business fairly and ethically according to the rules and regulations determined in the Trade Practices Act. It was initiated in the year 1974.

Warsaw Convention is an international convention under which the liability of the air carriers crossing the boundaries internationally is determined. This convention was signed in 1929 and amended in 1975 in Montreal (Hodgkinson and Johnston, 2016).

World trade Organisation is the international global organisation whose aim is to create a balance of trade between the varieties of nations. The goal is to serve the producers, exporters, importers.

Bilateral and Regional Free Trade Agreements are the trade agreements are the agreements made between the countries which contain the tariff reduction commitments and certain rules and regulations that are not present within WTO (Lester, Mercurio and Bartels, 2016).

Financial Probity is a type of the check that is undertaken to identify the County Court Judgements or the bankruptcies held. It is exclusive of the credit check (Sharma and Kumar, 2018).Records needs to be kept at ATO for a small business with an annual turnover of less than $2 million

Sales Invoice, purchase and expense records and year end income tax records are required to be maintained. Furthermore the return of the GST is also required to be maintained.

References

Bessis, J., (2015) Risk management in banking. United States: John Wiley & Sons.

Hodgkinson, D. and Johnston, R., (2016) International Air Carrier Liability: Safety and Security. Routledge.

Kaplan, S.N. and Zingales, L., (2010) Investment-cash flow sensitivities are not valid measures of financing constraints. The Quarterly Journal of Economics, 115(2), pp.707-712.

Kopel, M. and Riegler, C., (2017) A new perspective on the benefits of slack building under participative budgeting. Available at SSRN 3014881.

Lester, S., Mercurio, B. and Bartels, L. eds., (2016) Bilateral and regional trade agreements: Commentary and analysis(Vol. 1). Cambridge University Press.

Liao, L.K., Lin, Y.M. and Lin, T.W., (2016) Non-financial performance in product market and capital expenditure. Journal of Business Research, 69(6), pp.2151-2159.

Sharma, R.N. and Kumar, S.B., (2018) C&AG of India: An Instrument to Enhance Accountability, Probity and Good Governance. Indian Journal of Public Administration, 64(3), pp.454-472.

Shelton, D. and Sharma, S., (2018) Fiscal Responsibility 1.0 Purpose. Policy, 1, p.26.

Sidhu, S. and Mather, G., (2017) How to increase the sales revenue using focus differentiation strategy. United States: John Wiley & Sons

Smith, J.M., Driver, R. and Matthews, W., (2018) The Real Options Lattice: An Alternative to Discounted Cash Flow. Journal of Accounting & Finance (2158-3625), 18(7).

Stapleton, D.M., Pande, V. and O’Brien, D., (2014) EXW, FOB OR FCA? Choosing the right Incoterm and why it matters to maritime shippers. Journal of Transportation Law, Logistics, and Policy, 81(3), p.227.

Wei, Y.M., Wang, L., Liao, H., Wang, K., Murty, T. and Yan, J., (2014) Responsibility accounting in carbon allocation: A global perspective. Applied Energy, 130, pp.122-133.