Part 2

Scenario

You are the team leader for the ARP (Accounts Receivable & Payable) Department for ABC Bookkeeping. In the last 6 weeks several clients have called and emailed to notify the business that the ABN number is not showing on the invoices issued by ABC. This not only looks unprofessional, but it means ABC Bookkeeping is in breach of s29.70 of A New Tax System (Goods and Services) Act 1999.Furthermore, if a business' ABN is not provided the client is required as per TR2002/9 (Taxation Ruling) to withhold income tax at the highest marginal rate, from the payment. The current rate is 49%.

http://classic.austlii.edu.au/au/legis/cth/consol_act/antsasta1999402/s29.70.html

The following information has been extracted from ABC Bookkeeping policies and procedures.

The ARP department is responsible for:

• Issuing invoices to customers
• Receiving and entering payments in the accounting system
• Keeping the subsidiary ledgers up to date
• Maintaining an aging debtor register (an aging debtor reports is presented to the CFO at the end of each week) and
• Following up on overdue accounts
• Analysis and Provision for doubtful debts
• ARP department uses MYOB 2018.3

The ARP department has 4 team members:

• Team Leader - (You) Responsibilities - managing and guiding the team of ARP associates and the execution of regular receivables and payables reports and analysis, and determination of the provision for doubtful debts
• Receivables, payables and reconciliation - (Kevin) Responsibilities - receiving and entering payments and performing daily reconciliation of the subsidiary ledgers
• Reminders and debt recovery - (Alison)

Responsibilities - maintaining the aging debtors report, sending reminders for outstanding accounts and debt recovery

• Invoicing - (Kate)

Responsibilities - issuing invoices

Procedures for issuing a tax invoice include:

1. Invoice is requested by marketing issuing a sales order.
2. Invoice is raised through MYOB.
3. Invoice is sent out electronically to customer.

Kate has been issuing the invoices for ABC since she started work at the beginning of the year. She has basic accounting and IT knowledge.

The accounting system seems to be managing the volume of transactions but has recently failed to issue compliant tax invoices.

The Financial Controller has come to you and asked you to review and amend the system for Accounts Receivable. You are required to discuss the matter with the person who is responsible for issuing invoices, the team and then adapting the procedures to ensure it does not happen again. You have been given a month in which to undertake this task.

Question 1

Complete the following table to identify:

• timeframes for task completion
• which tasks can be undertaken in a team environment
• which are required to be completed by an individual

Tasks	Completion Timeframes	Team	Individual
Email to Kate
Meeting with team
Review of existing procedures
Amendments to procedures
Review of the procedures

Question 2

In the meeting, the ARP Team have responded, suggesting that current procedures for issuing tax invoices are too general and require more detail.

With reference to 'A New Tax System (Goods and Services Tax) Act 1999', review the current procedures and guidelines provided in the scenario and provide more detailed steps for creating an invoice to ensure compliance.

a)Update the current procedure and provide a step-by-step process that aligns with the Legislation to ensure compliance is maintained. You are required to write a full procedure for issuing invoices which can be included in the ABC Bookkeeping Policies and Procedures Manual.

b)Referring to the policies included in the ABC Bookkeeping Policies and Procedures Manual, in which section would you index the new customer invoicing procedures

c)Develop a suitable review process that can be used for ABC Bookkeeping to ensure their systems are meeting business and legal requirements. Complete the table below.

ABC Bookkeeping Systems Review Program
Frequency of review:
Methods implemented to conduct the review:	1. 2. 3.
Record-keeping requirements of the review: (What specific details are you required to record?)	1. 2. 3.

d)ABC Bookkeeping ARP department has recently migrated their accounting data to a cloud-based accounting system. Cloud-accounting systems should meet the management and compliance needs of the business.

Suggest at least 6 ways in which accounting systems and business processes can ensure that compliance and business needs are met. (Some research is required)

e)Provide two examples of cloud accounting software that can assist with ensuring compliance requirements are met. For each software example, provide details on how businesses can access it.