FNS40615 Financial Transactions of the Applicant

To provide you with an opportunity to Identify, check and record informpdop from documents.   Define and describe what information the following documents, systems or procedures should contain. 
1. Cheque: 
2. Application for credit facilities : 
3. What is a petty cash system and what is the function of the petty cash system?

What is the purpose of a suspense report? 
Errovkle you with on owertunftY to inter lind withdrawals craft to cepnliadenal Activity 1. What type of petty cash transactions are used in organIsatioret ? 
What steps are involved when you pertorm a petty cash transaction? 

To geovide you with an opportunity to check cheques and nod voucheth fee validity before processing and roosts:king banking docurnentation with the geginisation's financial records.

You are going to deposit a c nepur or credit voucher to obtain petty cash, whet are the things that you need to check? 
what are some of the processes your bank would have in place to protect your organisation from fraud? 
What procedure does/could or may your employer have place to secure the petty cash and the petty cash box? 
a. Before you settle the petty cash, it is important to make sure that the Petty cash is balanced. What do you need to do to reconcile your banking documentation against the organisation's financial records? 
What sector of the Financial Services industry do you work in l if not employed talk to your trainer? 
What legislation and/or codes of practice influence the development of policy and procedure within your work environment? 
In your own words, outline how you would reconcile banking documentation against the organisation's financial records. 

Introduction:

1. Cheque are used by businesses or individual for the purpose of drawing money from the banks and the same should contain the information about the amount which is to be issued by the bank and the date of issue. The cheque also contains the signature of the accountholder and also the name of the person to whom the amount is to be paid.
2. An application for credit facilities contains detailed information regarding the applicant which includes name of the applicant, address, phone no, nearest landmark, nature of the business of the applicant, email address. In addition to this, the application also specifies the amount and term of credit which is required by the applicant. Moreover, the payment mode which can be cash, cheque or electronic transfer should also be specified.
3. A petty cash system is a set of policies, rules, and system which is followed by a business for the purpose of meeting the miscellaneous requirements of the business which can be related to day to day office expense of the business. The main function of petty cash system is meet the basic and miscellaneous requirements in day to day business operations.

The accounting system aims at effectively and efficiently report the financial information of the business and therefore for such a purpose certain supporting documents are also required for the purpose of making effective reports. Some of the supporting documents which are required are a copy of purchase requisition, invoice and order, sales invoice and order, cash voucher and receipts. The bank statement and various ledger accounts are also to be maintained for the purpose of preparing the financial statements of the business.

Purpose of Suspense Account

A suspense account is created for the purpose of recording certain transactions which are doubtful or difficult to classify and the same are recoded with the help of suspense account (Enofe, Omagbon and Ehigiator 2015). The suspense account which is prepared can be a temporary account or a permanent account based on the application for the same. The main purpose of suspense account is to classify and record those transaction which were difficult to classify at the time of recording of the transactions.

The types of petty cash transaction which a business generally engages in are of short term nature (Attom 2013). Appropriate Examples for the same can be given as related to office and administration expenses, payment for electricity, fuel, rates and fixtures of the business, payment for stationary items.

Steps in Petty Cash Transaction

The steps which are followed in Petty cash transactions are given below in details:

• The petty cash custodian would fill the reconciliation form in which he would specify the cash balance in hand, cash vouchers available and any overage or underage.
• The business would then allow the cash limit balance to be given to petty cash custodian for the month.
• The petty cash custodian needs to consider cash vouchers and other cash disbursement and record the same in the petty cash statement.
• The last step is to effectively record the transactions or cash voucher in the petty cash statement of the business.

A petty cash system is prepared and followed under imprest system and therefore all the expenses must be recorded effectively in petty cash account (Eze and Harrison 2013). The payments which is to be made for cash voucher should be paid from the petty cash fund allocated by the head cashier and also it needs to be checked that the same falls under the category of petty cash expenses of the business.

Fraud Protection Strategies

The fraud protections strategies which are applied in banking organizations are listed below in details:

• Establishing of an effective and efficient internal control system which has the capability of monitoring the transactions of the business and also keep a track record of cash inflows and outflows of the business.
• Delegating the roles of the banks among employees and also effective job rotation scheme are incorporated so that one person does not perform the same role over and over again.
• Reconciliation of cash balances as shown in the books on a daily or weekly basis to be conducted by senior bank officials.

Securing of Petty Cash

The petty cash balance which is available at the end of the period is secured by effectively keeping the same in a protected drawer under lock and key and the petty cash register is maintained effectively in a computerized software which will provide data back and more security. Furthermore, daily reconciliation is done to match the balance available in petty cash. Cash is only to be paid against valid cash vouchers. Income from any other source should be mixed with petty cash balances.

Reconciliation of Petty Cash Balances

The petty cash balance of the business can be balanced and closed for the period with the help of comparison between banking records and the financial statements (Uwonda and Okello 2015). Any difference if arises, possible factors are to be identified and also any omissions are also to be considered.

Banking is the part of Financial Service which is my profession and I am engaged in the same.

The legislation which are to be followed by the management before taking any decisions or formulating any strategies are banking regulation act and other financial acts which are applicable on the bank. The business also needs to follow the provisions which are stated by ATO.

The reconciliation process which is followed requires the first basic step wherein comparison was made between the final balances which is shown in the financial records and the statement prepared by the management. Any discrepancies are to be investigated and factors responsible for such a mismatch is to be identified and corrective steps are to be taken accordingly.

In case a cheque cannot be signed by an individual than the same can approach the senior most member of the team who would have the authorization to sign the cheque amount.

The essential documents which are required to be checked are the delivery dockets, register showing inventory issue and other relevant document which is associated with the invoice.

The information which is to be verified is the date of the invoice and also the price and quantity which is stated in the invoice. It is also to be checked whether the consideration of GST is taken into account or not.

1. The errors which are identified in the invoices which is prepared by the business is to be reported to the sales manager and also to the operational manager of the business.
2. Any errors are to be reported to the team head and senior officials so that necessary adjustment can be made. The senior officials and team lead can be consulted with the help of emails.
3. In case an error is identified before the invoice is issued than the management needs to make necessary changes and adjustment so that the client receives accurate invoice. Similarly, in case, the purchase order no doe not conform with the invoice then the same is also to be reported immediately to the management as the same can result is recording errors of the transaction.

The documents which are required for the purpose of auditing are a copy of the financial statements which is prepared for the organization, various ledger accounts prepared by the business, records of purchase and sales invoices and orders, Inventory requisition slips and ledger.

Filing System of the Business

The filing system of the business displays a part of the internal control policy of the business and if the same is effective, the auditor can rely on the evidences which the auditor receives from such a source. In addition to this, it is also a measure of efficiency level of the business in terms of accuracy and transparency.

The journal entries which are passed are considered to be fundamental factors which contributes to the preparation and presentation of the financial statements of the business. The journal entries are the basis on which the ledger accounts are prepared and ultimately the financial statements are prepared. In addition to this, Journal entries effectively demonstrate the double entry system of accounting and helps in ledger posting.

Importance of Batching 

The main importance of Batching is that it saves a lot of time of the management for processing of financial information and also saves the financial resources of the business and also increases the efficiency of the business. In addition to this, this technique is very useful and widely used in process of payroll and bank reports.

In order to obtain authorization for recognizing journal in the business, an authorization is to be taken from the senior accountant of the business and also the operation manager of the business. A written confirmation is required from the operation manager for the purpose of authorizing journals.

The requirement for authorization of Journal is for the purpose of ensuring that efficient individual is given the responsibility and also for the purpose of accurate display of financial information.

A chart of accounts is a tool which is used by the management of the company to effectively show a list of accounts which are used for preparing the financial statements. Chart of Account is used for effectively identifying the assets, liabilities, income and expenses of the business and also classify the same.

Impact of Financial Systems

In todays environment, the recording process of financial information are done in a computerized program which can effectively store, update and process the information to generate reports. However, the information are to be entered manually into the system which is the only vulnerable area where manipulation can take place and affect the integrity of the financial information. Similarly, the software which is used by the business should also be effective so that it can maintain the accuracy and integrity of the accounting information. The reporting policies are prepared by the management; however, the applicable rules and regulations needs to be followed by the business.

Deposit Facilities and Banking Methods

The business should deposit in short term shares which have favorable market valuations or bonds or debentures in order to raise appropriate capital for the business. The business also can deposit in savings account for the purpose of maintaining standby liquid cash at all times which will help businesses to finance projects of the business. The management needs to opt a loan from bank as the business is newly set up and therefore a lot of finance requirement would be need for the business.

The cash and deposits of the business can be handled in an effective manner if proper records are maintained for the same showing all expenses and withdrawals of the business. The business needs to reconcile the cash balances on a regular basis in order to verify the balances and minimize the chances of misconduct.

A Proof of Lodgment is a slip which is received against a deposit and the slips shows that a deposit was made and also the balances in the bank account has been updated accordingly. A proof of lodgment is to presented for filing in cash ledger whenever the business has made any fresh deposits.

The documents which are filed are essential information regarding the owners and moreover as the information are entered in computerized environment therefore, the information and data which is entered in the software becomes more traceable.

Reference

Attom, B.E., 2013. Cash management practices by micro and small-scale enterprises at Kasoa in the central region of Ghana. Asian Journal of Business and Management Sciences [internet].[diunduh 2014 Juni 06], 3(2), pp.01-12.

Enofe, A.O., Omagbon, P. and Ehigiator, F.I., 2015. Forensic audit and corporate fraud. IIARD International Journal of Economics and Business Management, 1(7), pp.1-10.

Eze, N.M. and Harrison, O.O., 2013. Financial management in local government: The Nigeria experience. International journal of financial research, 4(4), p.146.

Uwonda, G. and Okello, N., 2015. Cash flow management and sustainability of small medium enterprises (SMEs) in Northern Uganda. International Journal of Social Science and Economics Invention, 1(03), pp.153-to.