Student Guide 2013 Version 3.1

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Copyright Notice

© Maria Landrelli. All rights strictly reserved.

No part of this publication may be reproduced or transmitted in any

form or by any means, mechanical or electronic, including

photocopying or recording, or by information storage or retrieval

system, without permission in writing by the publisher.

Requests for permission or further information should be addressed

to Maria Landrelli at [email protected].

Legal Notices

While all attempts have been made to verify information provided

in this publication, neither the author nor the publisher assumes

any responsibility for errors, omissions or contrary interpretation of

the subject matter herein.

The purchaser of this publication assumes responsibility for the use

of the material and information. If the advice of legal or related

matters is needed, the services of a qualified professional should be

sought. The program is not intended for use as a source of legal or

accounting advice. You should be aware of any laws that govern

business transactions or other business practices in your state.

Any reference to any persons or business, whether living or

deceased, existing or defunct is purely coincidental.

Next Review Date

May 2013

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About the author – Maria Landrelli

Maria has been involved in mentoring and

training franchisees and small business

owners (SME) in computer accounting

software and business systems since March

1994. Over this time she has helped

hundreds of SMEs with their accounting

needs using software programs such as

MYOB and Quicken.

Since 1995 she has been an MYOB Certified Consultant and is one

of a small number of specialists around Australia authorised by

MYOB Australia Limited to provide training on their behalf.

During her career, Maria has been the main trainer of a large

international accounting franchise and has setup many of the

systems which are still in place today. Over the years she has

mentored a number of franchisees specializing in accounting,

financial control and bookkeeping services to help them create their

own profitable businesses and still keeps in contact with a number

of them today.

Maria in 1997 joined a Not For Profit Registered Training

Organisation (RTO) as part time trainer and trained business

owners in MYOB related products. During this time Maria became

dissatisfied with the quality of the training material available and

decided to create her own manuals.

During this time Maria was asked to become a member of the board

for this Not for Profit RTO. She has also been a member of the

executive committee and over the last 15 years has been treasurer

on a number of occasions.

Maria has a Certificate IV in Training & Assessment to ensure she is

delivering training to the highest possible standards and has been

training small businesses, accountants and bookkeepers in a

classroom situation since 1998.

In 1999 Maria set up her own successful MYOB consulting and

bookkeeping business.

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Maria went on to become a franchisee of the international

accounting franchise and had been named the most successful

franchisee in NSW on more than one occasion.

Maria has also twice been a mentor for the “Women in Business

Mentor” program for the NSW Department of State and Regional

Development. The Women in Business Program helps

up-and-coming women business owners expand their business.

In 2006 Maria became a member of the MYOB Publishers Program

which helps publishers of MYOB learning material to ensure the

quality and integrity of that material is of the highest standard.

In 2010, Maria was asked to teach the Certificate IV in Financial

Services (Bookkeeping) and GST/BAS Skill set for the RTO, the

required educational qualifications for registration with the Tax

Practitioners Board as a BAS Agent.

In 2011, Maria received both the Brian Milligan Memorial Shield and

the Pride in Workmanship award from The Rotary Club of Waitara

In 2012 Maria was invited to be a presenter at the prestigious

NSW/ACT annual congress for the Institute of Public Accountants

(IPA), In 2013, the Institute invited Maria to develop and present

course material for members of the Institute.

Maria is also a fellow of the Institute of Public Accountants (IPA)

and a member of the Institute of Certified Bookkeepers (ICB).

Maria is also Network Meeting Facilitator for ICB and runs the

monthly networking meetings at Hornsby.

In 2007 Maria co-founded Bookkeeping Biz in a Box with Ralph

Rossteuscher to assist bookkeepers and financial accountants that

wished to setup their own successful bookkeeping business.

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Unit of

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Unit Descriptor This unit describes the performance outcomes, skills and knowledge required to modify and operate an integrated computerised accounting system. This is generally under supervision and encompasses processing transactions within the system, maintaining the system, producing reports and ensuring system integrity. No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement.

Employability Skills This unit contains employability skills.

Application of the Unit The unit has application across all sectors of the financial services sector and other industry organisations using accounting software. It has application to job roles such as accounts receivable and payable clerks.

Unit Sector Accounting

ELEMENT PERFORMANCE CRITERIA

1. Implement an integrated accounting system

1.1 The general ledger, chart of accounts and subsidiary accounts are implemented in accordance with organisational requirements, procedures and policies

1.2 Customers, suppliers and inventory items are set up in the system to meet organisational requirements and the reporting requirements of Goods and Services Tax (GST)

1.3 Appropriate technical help is used to solve any operational problems

2. Process transactions within the system

2.1 Input data is collated, coded and classified before processing

2.2 A wide range of cash and credit transactions are processed in both a service and trading environment

2.3 The general journal is used to make any balance day adjustments for prepayments and accruals

2.4 System output are regularly reviewed to verify the accuracy of data input and adjustments made for any detected

2.5 An end of financial year rollover is performed

3. Maintain the system 3.1 Any new general ledger accounts, customer, supplier,

inventory and fixed asset records are added as required

3.2 An existing chart of accounts, customer, supplier, inventory and fixed asset records and subsidiary accounts are maintained and updated

3.3 The chart of accounts is customised to meet the reporting requirements of the organisation

4. Produce reports 4.1 Reports to indicate the financial performance and financial

position of the organisation and for GST purposes are generated as required or requested

4.2 Reports to ensure that subsidiary ledgers and accounts reconcile with the general ledger are generated

4.3 Reports, which ensure that the bank account reconciles with the bank statement, over at least two reporting periods are 5. Ensure system

integrity

5.1 Regular back-ups of the system are made to ensure against loss or corruption of data

5.2 Data are restored from back-ups in the event of loss or corruption of current data

5.3 A secure record of all processed transactions is maintained for audit purposes

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REQUIRED SKILLS AND KNOWLEDGE

This describes the essential skills and knowledge and their level, required for this unit. Required skills

• communication skills to:

• determine and confirm work requirements, using questioning and active listening as required

• liaise with others, share information, listen and understand • use language and concepts appropriate to cultural differences • research skills such as:

• accessing and managing information • interpreting documentation

• numeracy skills for financial calculations and analysis

• well-developed IT skills for modifying and using integrated financial software • literacy skills for identifying and using financial data from a variety of sources • problem solving skills to identify any issues that have the potential to impact on

the data entry and reporting process and to develop options to resolve these issues when they arise

• organisational skills, including the ability to plan and sequence work Required knowledge

• organisational procedures and policies relating to maintaining financial records • principles and practices of accrual accounting

• principles of double entry accounting

• relevant financial services industry legislation and statutory requirements • the characteristics and included information in relevant source documents of

financial data

RANGE STATEMENT

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Chart of accounts may include: • classified expenses by type • current assets • current liabilities • equity • income • non-current assets • non-current liabilities.

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Organisational requirements, procedures and policies may include: • Australian Accounting Standards

• corporate governance

• correctly identifying and opening files within an organisational permit • electronic and paper-based recording

• log on and system security procedures

• organisational health and safety (OHS) policies, procedures and programs • storing data to security requirements and for appropriate future access. Appropriate technical help may include:

• computer help desk personnel

• designated technology assistance staff

• external staff employed or recommended by the software supplier to assist with difficulties

• managers and supervisors • on-screen help

• online help

• software manuals. Transactions may include:

• adjustment notes • bad debts

• bank reconciliation • cash sales and deposits • cheque payments

• commencing business entry • commission

• contra entries

• credit card payments • customer payments • discounts

• financial • sales • funds transfers • inventory stock take • loans

• petty cash

• purchase and sale of stock • purchase invoices

• purchase orders • sales invoices • supplier payments

• withdrawal of stock and assets by owner. Balance day adjustments may include:

• accrued expenses • depreciation • doubtful debts • prepaid expenses

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Reports may include:

• aged payables and reconciliation • aged receivables and reconciliation • asset listing

• auditable transaction trail • balance sheet

• bank reconciliation

• business activity statement • customer statements

• inventory listing • profit and loss.

Subsidiary ledgers may include: • accounts payable

• accounts receivable • fixed assets

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EVIDENCE GUIDE

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

• set up an organisation's chart of accounts by modifying an established integrated financial software system

• interpret and apply organisational policies and procedures

• implement an integrated accounting system ensuring integrity of the data • process transactions within the integrated system and generate reports • maintain the integrated system.

Context of and specific resources for assessment Assessment must ensure:

• competency is demonstrated in the context of the financial services work

environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

• access to and the use of a range of common office equipment, technology, software and consumables.

• access to an integrated financial software system and associated data • access to the internet.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

• evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

• verbal or written questioning on underpinning knowledge and skills • setting and reviewing projects using specialised software

• evaluating samples of work

• accessing and validating third party reports. Guidance information for assessment

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Manual MYOB T = Theory Manual

ELEMENT PERFORMANCE CRITERIA M = MYOB Chapter

1. Implement an integrated accounting system

1.1 The general ledger, chart of accounts and subsidiary accounts are implemented in accordance with organisational

requirements, procedures and policies

T & M 1, 2

1.2 Customers, suppliers and inventory items are set up in the system to meet organisational requirements and the reporting requirements of Goods and Services Tax (GST)

T & M 1, 3, 4, 5, 7, 11, 12, 14, 15, 16

1.3 Appropriate technical help is used to solve any operational problems

T

2. Process transactions

2.1 Input data is collated, coded and classified before processing

T & M 3, 4, 5, 11, 14, 15, 16 within the

system

2.2 A wide range of cash and credit transactions are processed in both a service and trading environment

T & M 3, 4, 5, 11, 14, 15, 16

2.3 The general journal is used to make any balance day adjustments for

prepayments and accruals

T & M 10

2.4 System output are regularly reviewed to verify the accuracy of data input and

adjustments made for any detected

T & M 6, 13, 17

2.5 An end of financial year rollover is performed

M 17

3. Maintain the system

3.1 Any new general ledger accounts, customer, supplier, inventory and fixed asset records are added as required

T & M 3, 4, 5, 11, 14, 15, 16

3.2 An existing chart of accounts, customer, supplier, inventory and fixed asset records and subsidiary accounts are maintained and updated

T & M 3, 4, 5, 7, 11, 14, 15,

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3.3 The chart of accounts is customised to meet the reporting requirements of the organisation

T & M 1

4. Produce reports

4.1 Reports to indicate the financial performance and financial position of the organisation and for GST purposes are generated as required or requested

T & M 6, 17

4.2 Reports to ensure that subsidiary ledgers and accounts reconcile with the general ledger are generated

T & M 1, 3, 4, 6

4.3 Reports, which ensure that the bank account reconciles with the bank statement, over at least two reporting periods are generated

T & M 5

5. Ensure system integrity

5.1 Regular back-ups of the system are made to ensure against loss or corruption of data

T & M 19

5.2 Data are restored from back-ups in the event of loss or corruption of current data

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This unit is designed for bookkeepers – both contract and those in the employment of organisations. Bookkeepers will have a different skill set to end users of MYOB.

Every business, regardless of the size of the organisation, must maintain accurate accounting records. This information is used not only to complete the Business Activity Statements (BAS) but also the annual income tax return.

Previously, smaller organisations relied on their tax accountants to complete the annual tax return - including the data entry of all of the transactions - usually many months after the end of the financial year.

This was largely due to the cost of purchasing and maintaining computers and computer accounting packages such as Sybiz, Attache.

We have come a long way in a relatively short amount of time.

During the 90s, computers became more affordable. With the introduction of smaller and more affordable accounting software such as MYOB, QuickBooks and others which have since flooded the market, many business owners started taking control of their own accounting needs but with mixed results.

This trend increased with the introduction of the GST system and the need to complete monthly / quarterly BAS.

Recently, however, many business owners, realising that they do not have the necessary accounting skills or that their time was better spent on other areas of the business, have decided to employ bookkeepers to process the day to day transactions and complete the BASs.

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Chapter 1 Implement an

integrated

accounting

system

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Implementing an accounting system

Implementing an integrated computer system into any size organisation requires thought and planning prior to purchasing the actual software.

This is particularly true of larger organisations which may be moving between programs because their current systems are not giving them the information they require to run their businesses effectively.

Business owners have become computer-savvy, and are demanding more from their accounting packages rather than just being able to provide information to create income tax returns and Business Activity Statements.

As a bookkeeper an organisation may enlist your aid in choosing, implementing and running the package.

There are numerous software distributors out there, but you need to choose the one that is most appropriate for the organisation’s needs, e.g. you would not install a package such as MYOB or QuickBooks into BHP Limited and similarly you would not introduce SAP Accounting Systems into a small sole trader plumber.

A larger organisation will spend much time researching and evaluating an accounting package to determine if it will produce the required information. However, a small business will often go into a store such as Officeworks or Dick Smith and purchase an off the shelf package, often at the recommendation of accountants, friends or the sales person at the store.

Choosing the right accounting system

For small organisations, most off-the-shelf packages are affordable and can be easily customised to suit the small business.

However it is not just a matter of installing the software and starting to use it: you need to consider a number of factors before you enter the first transactions.

Going down the wrong path can cost you money and several days of time to correct. You will need to gather information from a number of

different sources to ensure you are setting up the program to suit the organisation, and that you are then able to extract the data for the reports required by the organisation.

Relevant sources of information could be the business owner, staff members and the accountant. Each will have different

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Most of the companies associated with the software packages have outside consultants who they will recommend to assist business - both before and after purchase.

These consultants can be particularly useful during the selection process as they know the package well and will often make suggestions that you have not considered. A number of consultants specialise in not just one package but in several, so they can give you the pros and cons of each to help with your selection.

Things to consider include:

Government reporting e.g. Goods and Services Tax (GST) and Income Tax

Assessments

Cost of software and associated installation costs

Does your accountant have knowledge of and the ability to use the software you

choose (some accountants prefer MYOB over QuickBooks and vice versa)

Is the entity Cash or Accrual for accounting and GST purposes

Does the organisation need certain reports e.g. franchiser’s reporting

Do you need subsidiary ledgers for Debtors, Creditors, Inventory and Payroll

If you already have an accounting package is there a migration path to convert

your list of customers, suppliers, inventory etc

Do you need to produce invoices from the package

How many people within the organisation need access to the program now and

in the future

Does the software allow you to upgrade as your accounting needs grow

Does the software company offer support options e.g. telephone support, onsite

support; is there support available from other sources, not just from the manufacturer (what if the manufacturer disappears)

Do you run a retail outlet and use a cash register which needs to be linked to

the accounting package

Once you have determined the organisation’s requirements you can evaluate all the options: this may narrow your choice down to one or two packages only.

Installing and setting up the software to suit the organisation

When you have chosen the software you will need to work out an action plan: what needs to be done, who will need to access the program and training requirements. You then need to look at installing the software and providing training to relevant staff.

In very small organisations the installation may be a fairly easy process: just pop in the disk and away you go.

Some small to medium organisations may have network administrators who dictate what software can be installed on each machine. The installation can become more complex if you implement multi-user software where the file must be located in a central location.

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Depending on the size of the organisation and the complexity of the software, just installing and configuring the software can take several days and may need to be implemented in stages so as not to overload staff with too much information at one time.

You will require lists of data to be entered: opening balances, customers, suppliers, employees along with any relevant information so that the information is at your fingertips when you need it.

You may need to collect this information from a number of locations and sources and this can often take time.

Sometimes the information will not always be readily available at the time of

installation and may not be for several months e.g. if you are setting up the program

from 1st July you may not yet have financial figures for June from the accountant.

Different stakeholders will have different needs and requirements e.g. the accountant may want the chart of accounts setup in a certain way however the business owner may require more detailed information.

It is a juggling act to ensure that, as much as possible, you are providing both parties with the relevant information.

For example, the business owner may want to see information about the income broken down this way …

However the accountant doing the tax returns does not need as much detail and wants to see this …

If you are moving away from an existing package you will also need to determine whether some of the information can be imported into the new package and thus save

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A client had approximately 7,500 customers, 5,000 suppliers and 2,000 inventory items.

This data entry could have taken a staff member a number of days. However the data from the old package was extracted as a Comma Separated Value (CSV) file, tidied up in Excel and from Excel imported directly into MYOB. This process took 4-5 hours of my time at a consulting rate however it saved an employee a tedious few days of data entry and reduced the possibility of errors.

You will also need to decide at what point in time you want to implement the software for the organisation. If it is close to 30th June, then it might be wise to perform the initial setup in May so that you can be ready to begin processing on 1st July, or if your

implementation date is 1st August then go back and re-enter transactions for July.

However, many accounting software packages allow you to start midyear and enter opening Profit & Loss (P & L) balances as well as the Balance Sheet.

In that case, you will then need to extract information from both the old and new applications for the accountant.

A checklist can help you ensure you have not missed any vital steps in the installation process. Here is a sample checklist I use with MYOB software installation.

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Client:

Software Installation Software Installation Software Installation

Software Installation Balance New SystemBalance New SystemBalance New SystemBalance New System Install computer accounting software Reconcile bank account

Register software Reconcile debtor balances with asset a/c

Input company details Reconcile creditor balances with liability a/c

Setup security passwords Reconcile employee deductions with liability a/c’s

Setup standard report fonts etc. Training Other Staff if ApplicableTraining Other Staff if ApplicableTraining Other Staff if ApplicableTraining Other Staff if Applicable

Modify default preferences Overview of software

Modify default customer terms before input Entering invoices

Setup icon to go directly into file Printing / Email invoices/quotes

Customisation Customisation Customisation

Customisation Entering receipts

Input chart of accounts Printing / Email statements

Input customer cards Entering purchases

Input supplier cards Printing / Email purchases/orders

Input employee cards Entering payments

Input inventory items Entering miscellaneous income/expenditure

Establish payroll categories & assign to employees Inventory overview

Beginning Balances Beginning Balances Beginning Balances

Beginning Balances Checking for errors

Input balance sheet figures BACKUP!

Input unpresented cheques NetworkNetworkNetworkNetwork

Input beginning debtor balances Install accounting software on second PC

Input beginning creditor balances Map drive to first PC

Input beginning inventory balances Copy forms to second PC

Form Design Form Design Form Design

Form Design MiscellaneousMiscellaneousMiscellaneousMiscellaneous

Design invoice form __________________________________

Design quote form __________________________________

Design statement form __________________________________

Design purchase order form __________________________________

Bring System Up-to-date Bring System Up-to-date Bring System Up-to-date

Bring System Up-to-date __________________________________

Input invoices since conversion date __________________________________

Input customer payments since conversion __________________________________

Input creditor purchases since conversion __________________________________

Input creditor payments since conversion __________________________________

Input other income & expenditure since conversion date __________________________________

Input employee balances as at conversion date __________________________________