Career Training is a private registered training organisation (RTO) based in Geraldton, Western Australia. Career Training is recognised as an industry training leader delivering nationally recognised and specialised courses. Registered training organisations (RTOs) are the training providers registered by ASQA (or, in some cases, a state regulator) to deliver nationally recognised vocational education and training (VET) services.
Career Training provides qualifications in various subject areas, including business, community services, information technology and hospitality. There are currently 400 students enrolled across a wide range of courses. There are 35 staff members, including training staff and administration.
The levels of qualifications provided are as follows:
Certificates I, II, III and IV
Career Training follows the important standards of the industry and focuses on supporting informed decisions, engagement and participation. The RTO applies a systematic approach to ensure quality across all training and assessment services, including staff and systems. It seeks feedback from students and internal staff on a monthly basis and conducts internal audits of the company’s policies and procedures to ensure compliance against the standards for registered training organisations.
Context of the Assessment
Computer software requirement
The current accounting information system used by Career Training has not been able to provide adequate and sufficient analysis of its revenue and expenditure that has led to difficulties in making informed estimates of future profits.
The future estimates of the company’s profits are not based on statistical figures and facts. They are merely predictions of top management. The board of directors feel that to have more realistic figures on the company’s future growth and profit, they need to use accounting software to analyse previous years’ results and trends. This will not only help them to identify the future profits but will also help them to expand the business.
So, they have decided to use a new system that can manage the financial information more effectively and have the capabilities to analyse the data and provide realistic statistics to create budgets and forecasts to provide the owner and leadership team with the ability to measure where the company was at and where it is headed financially. The senior management team believe that better information will allow them to prepare for the future, allocate resources more efficiently and improve profit margins.
The senior management wants you to recommend a new system. They have provided you with the guidelines for the selection of the new system. The system must:
comply with all the legislative requirements.
calculate all payroll requirements
prepare information for compliance requirements
track stock, work in progress, orders, jobs and other task management requirements
handle multiple bank accounts and automatically imports and processes bank data
be able to produce separate financial reports for each business or department within the business
easily integrate with other systems you are operating such as online payments, point of sale equipment, customer relationship management records, stock records and payroll software
keep detailed records on clients
allow you to manage permissions so that users only have access to the parts of the system that is relevant to their work
allow users to securely access data remotely (cloud computing)
have no ongoing license fees
They are well aware of the fact that checking the software for the requirements will take time. The new budget is also expected to be projected this month. So, they want this to be done after the preparation of the budget for the year 2021/2022.
Assume that you have been appointed as the Business Manager at Career Training and you need to prepare budgets and establish audit trials for the organisation.
Task 4 Prepare Budgets
In this activity, you will act as the Business Manager, and you are responsible for preparing the budgets for Career Training.
The company CEO has provided you with the following information Appendices A B C D Download Appendices A B C Dfrom the previous financial year budgets:
Business plan summary (Appendix A)
Income statements for the year 2019/20 and 2020/21 (Appendix B)
Statement of financial position (Appendix C)
Notes from meeting with the Accountant (Appendix D)
Budget policies and procedures (refer to the Career Training WebsiteLinks to an external site.) – Username: CareertrainingRTO – Password: Career123
You are required to complete the following tasks:
Prepare the following budgets template Download budgets templatefor the 2021/22 financial year:
Sales and profit budget
GST Cash flow budget
The budgets must be prepared on a quarterly basis. Templates are provided that need to be used when preparing Career Training budgets.
When preparing the budgets, you must ensure that you must:
Conduct a detailed analysis of previous financial data to identify different quarters of the financial year that have generated a profit or loss and accurately determine the allocation of resources for each quarter of the budget.
Ensure that you critically review the ‘Business plan summary’ given in the case study to establish critical dates of the transactions and allocate the same in the budget for the next financial year.
Make informed estimates of new items given in ‘Business plan summary’ for inclusion in the budget
Review statutory requirements are given in the case study to prepare a budget that is compliant and correctly documents the company’s liabilities for tax.
Ensure that there is no misappropriation of funds