Bookkeeping Applications (Bookkeeping II)

Raise the bar on your number crunching…

• Discover how to use bookkeeping in your business.
• A fantastic training for primary farmers, manufacturers, and retailers
• A logical continuation of the course Bookkeeping Fundamentals.

This course covers payroll, budgeting, stock control, and cash flow management with a focus on enterprises that sell things (trading businesses).

A training for primary farmers, traders, retailers, and manufacturers.

 

Lesson Structure

There are 10 lessons in this course:

1. Introduction to Bookkeeping Applications
   • Stock defines a trading business
   • Bookkeeping requirements for a trading business
   • Steps in processing stock transactions
   • Books required for a trading business
   • Trading businesses and accounting rules
   • Accounting doctrines
   • Accounting standards
2. Decision Making -How to manage bookkeeping
   • Bookkeepers Terminology
   • Using bookkeeping as a management tool
   • What are business structures
   • Business requirements of companies
   • Financial information, and who uses it
   • Alternative approaches to accounting systems
   • Definitions and bookkeeping processes
   • Double entry bookkeeping
   • Single entry bookkeeping
   • Cash accounting
   • Modified cash accounting
   • Accrual accounting
   • Choosing depreciation methods
   • Depreciation calculation
   • Calculating depreciation with the straight line method
   • What if there is no residual value
   • How to enter depreciation in the books
   • Declining balance method of depreciation
   • Calculating percentage rate of depreciation
   • Units of activity depreciation method
   • Intangible assets
   • Tracking assets and depreciation
   • Closing stock control methods
   • Functional profit and loss in a trading business
   • Informative profit and loss presentation – segmentation, grouping expenses
   • Showing Extraordinary Revenue and Expenses
3. Managing Cash Flow, Obtaining Finance, Managing Bad Debts and Accounts Payable
   • Definition of cash
   • The cash cycle
   • Cash flow and liquidity
   • Analysing a businesses cash flow
   • Cash flow margin
   • Statements of cash flow
   • Managing costs in a business
   • Financing a business
   • Rules for business funding
   • Business set up costs
   • Thinking outside the box
   • Loss of time and income
   • Managing bad debt
   • Initiating collection
   • Bookkeeping procedures for bad and doubtful debts
   • Accounts payable procedures
   • Accounts payable schedule
   • Ageing report
   • Source Documents -invoice, monthly statement
   • Credit purchasers journal
   • Creditors subsidiary ledger and schedule
   • Cash payments journal and creditors control account
4. Managing Inventory Part 1
   • Difference between goods and commodities
   • Role of stock in a trading business
   • Purpose of physical stock take
   • Costing goods
   • When an articles cost changes
   • How cost relates to gross profit
   • Difference between cost of goods sold and selling expenses
   • Pricing stock
   • Mark up
   • Margin
   • Stock coding system
   • Stock sheets
   • Journals used in businesses that carry stock
   • Common journals
   • Examples of journal entries
   • Recording purchase returns in the general journal
   • Closing books
   • Closing ledger accounts
   • Preparing for new accounting period
   • Transferring balance day closing entries
   • Profit and loss account
   • Balance sheet
5. Managing Inventory Part 2
   • Perpetual stock control
   • Stock cards and subsidiary ledger
   • Records on stock cards
   • Stock gains and losses
   • Adjustments
   • Errors in stock taking
   • Bar codes
   • Costing sales
   • Inventory turnover ratio
   • Modified general journals for perpetual stock control
   • Valuing stock methods -FIFO, LIFO, Identified cost method, weighted average, etc.
   • Terminology
6. Establishing and Managing Control Accounts
   • Introduction
   • Grouping accounts
   • Advantages of control accounts
   • Debtors control accounts
   • Debtors subsidiary ledger and control account
   • Cash receipts journal and debtors control account
   • Credit purchasers journal
   • Creditors subsidiary ledger and control account
   • Cash payments journal and creditors control account
   • Control accounts relationship to non current assets
   • What happens at the end of assets useful life
   • Assets register
   • Disposal of non current assets
   • Creditors control accounts relationship to subsidiary accounts
   • Control accounts and expenses
   • Control accounts and inventory
7. Budgeting Part 1
   • Introduction
   • Budget types
   • Cash budget
   • Capital budget
   • Sales budget
   • Marketing budget
   • Production budget
   • Expense budget
   • Project budget
   • Master budget
   • Inter-relationships between budgets
   • The cash budget
   • Preparing a cash budget
   • Factoring in safety margins
   • Variable Costs
   • Using net profit to evaluate business performaNCE
   • What is profitability?
   • What is gross profit?
   • What is net profit?
   • Cash flow margin
   • Return on assets margin
   • Gearing ratio
   • Owners equity margin
   • Budgeted profit and loss statements
   • Budgeted balance sheets
   • Variances in budgets
   • Budget reviews and performance reports
8. Budgeting Part 2
   • A problem based learning project (ie. PBL) where you will prepare budgeting for a retail business.
   • PBL project is carefully designed by experts to expose you to the information and skills that we want you to learn.
   • In undertaking the project, you are given:
   • • A statement of the problem (e.g. diseased animal; failing business; anorexia case study);
   • • Questions to consider when solving the problem;
   • • A framework for the time and effort you should spend on the project;
   • • Support from the school.
9. Payroll, PAYG Taxation, Taxation for Trading Businesses
   • How to set up a payroll system
   • Types of payments made for work done
   • Employee records to be kept
   • Other records
   • Fringe benefits and taxation
   • Recording wage payments
   • Employee payment summary
   • PAYG Taxation
   • Using time sheets
   • Superannuation or pension funds
   • Taxation law terminology
   • Tax related expenses
10. Financial Statement Analysis
    • Analysis and interpretation
    • Why do we analyze financial data
    • Using net profit figures to evaluate business performance
    • Analyzing cost centres in business
    • Functional classification on P & L Statement
    • Difference between analysis and interpretation
    • Ratio analysis
    • Trend analysis Vertical analysis
    • Horizontal analysis
    • When should financial data be analyzed
    • Calculating investment returns
    • Return on assets margin, equity margin
    • Cash flow ratio operation
    • Accounts receivable turnover ration
    • Evaluating business performance using net profit ratio
    • Profitability

Each lesson culminates in an assignment which is submitted to the school, marked by the school’s tutors and returned to you with any relevant suggestions, comments, and if necessary, extra reading.

Aims

• An explanation of the characteristics of trading businesses and their bookkeeping needs. Examine the bookkeeping processes.
• Explain how bookkeeping systems are chosen to meet specific business demands and the benefits and drawbacks of each.
• Describe: business finance techniques, how to manage bad debts, and accounts payable procedures.
• Cash flow management and cash flow margins and returns on investment.
• Explain the type of stock and the system used to record inventory on a periodic basis.
• List the different control accounts and how they are used.
• Describe the budgetary reports used in trading businesses and how they are created.
• List the techniques employed in payroll systems, the taxes that apply to payroll, and the various taxes that trading businesses are subject to.
• Analyze a company’s financial situation

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Does this describe who you are?

Anyone who has completed Accounting Foundations and wants to advance their knowledge or who needs to refresh their memory on bookkeeping procedures should enrol in this course.

Trading Companies Should Attend This Course

Instead of offering services, trading enterprises sell goods. Instead of being service providers, they are retailers, primary producers, and manufacturers.

It becomes necessary to keep track of both the buying and selling of such commodities when running a trading business. This is in addition to the regular service industry’s recording requirements.

A business may occasionally sell some products, but those items are not included in the definition of trade inventory. Non-current assets (fixed assets), such as equipment and vehicles, may be sold for a profit at the end of their useful lives, but they are typically bought with the idea that they won’t be sold again to make a profit. Typically, a business owner purchases non-current assets with the intention of keeping them for a number of accounting periods in order to generate money.

BUSINESS FINANCE

When starting a business, it will generally need money to finance it for example fund will be needed for:

• Setting up shop (rent in advance, bonds, office supplies, phones, computers, employee salaries, marketing expenses, and possibly purchasing the goods you’ll be selling) (unless you are setting up a service type business). 
• to pay for daily operating expenses up until the company starts to bring in a turnover and, ideally, a profit.

As an illustration, money is required to open a furniture showroom in order to rent the space, possibly hire people, purchase the furniture, market your company, and other things. A large amount of money will be needed.
Setting up a small cleaning service may cost less capital. The owner can print some brochures about the company and the prices and place them in the letterboxes of nearby homes. The initial costs of purchasing cleaning supplies and machinery will be incurred. Nonetheless, the price will be much lower than starting a furniture company.
A professional writer working from home merely needs a computer, scanner/printer, and telephone. Some firms won’t even need any initial financing. There is very little initial investment, but it will be much more difficult to make money in the beginning (until you are better known) than when you are selling, let’s say, furniture.

Funding
It is simple to undervalue the sum of money required to finance a business, and doing so is the surest path to ruin.
There are numerous ways to get money for a business’s start-up:

• Use owner’s savings.
• Use owner’s assets (liquidate them).
• Borrow against assets (mortgage or equity release).
• Bank overdraft or loan
• Credit cards
• Business grants
• Private investors
• Borrow from family
• Work in paid work your job until adequate turn-over is generated

No matter how a business is funded it needs:

• Sufficient money to set up the business.
• Sufficient funds to run the business, until it starts to generate income.
• To make enough profit to make the business viable (i.e. continue with the business).

The business plan will determine where and how money is obtained; but, before taking out sizable loans from a bank or anybody else, make sure the company will be able to repay the loan. Using the equity in a family home to finance a business can be disastrous because if the venture fails, the home could be lost.

WHY DO YOU NEED THIS COURSE?