Financial & Legal Considerations – Unit 2 AOS 1

Vocabulary flashcards covering key legal requirements, financial systems, professional support, supplier selection, policy development, and technological and global considerations for establishing a business.

Australian Securities and Investments Commission (ASIC)

Federal body that oversees national business-name registration and corporate regulation.

Business Name Registration

Legally lodging a trading name with ASIC unless trading solely under the owner’s personal name.

Domain Name

The web address of a business; should be easy to spell, memorable and reflective of activities.

Australian Tax Office (ATO)

Government agency that administers and collects federal taxes in Australia.

Income Tax

Tax levied on the taxable income of individuals and companies.

Pay As You Go (PAYG) Withholding

System where employers deduct income tax from employees’ wages and remit to the ATO.

Goods and Services Tax (GST)

10 % tax on most goods and services sold in Australia; compulsory registration for businesses earning $75 000+.

Fringe Benefits Tax

Tax on non-cash benefits provided to employees, e.g., company car for private use.

Business Activity Statement (BAS)

Periodic form used to report and pay GST, PAYG instalments, PAYG withholding and other taxes.

Occupational Health and Safety Act 2004 (Vic)

Victorian legislation that safeguards the health, safety and welfare of employees and the public.

WorkSafe Victoria

Regulatory authority that enforces OHS laws, inspects sites and prosecutes safety breaches.

WorkCover Insurance

Compulsory insurance covering workplace injury-related costs such as lost income and rehab.

Competition and Consumer Act 2010 (CCA)

Federal law promoting fair trading, competition and consumer protection.

Australian Consumer Law (ACL)

National law providing consumer guarantees on goods and services sold by businesses.

Consumer Guarantees

Statutory rights ensuring goods are of acceptable quality, fit for purpose and services are provided with due care.

Local Government Zoning

Council rules that designate land use types and influence where businesses can operate.

Local Health Regulations

Council standards that premises (especially food businesses) must meet to obtain a licence.

External Professional

Specialist, such as an accountant or solicitor, hired to provide expert financial or legal advice.

Freelancer

Independent worker paid on a per-job basis rather than being an employee.

Bookkeeper

Professional who records and processes a business’s financial transactions, usually for an hourly fee.

Recruiter

Human-resource specialist hired to source and screen suitable staff for a business.

Sales Professional

Expert engaged to locate and persuade customers, often paid commission on each sale.

Marketing Consultant

Advisor who designs and runs campaigns to raise brand awareness and boost sales.

IT Technician

Specialist who installs, maintains and troubleshoots a business’s information-technology systems.

Separate Bank Account

Dedicated business account used to keep owner and business finances distinct.

Separate Entity Principle

Accounting rule stating that a business’s transactions are recorded separately from the owner’s.

Bank Fees

Charges levied by financial institutions for account maintenance and services.

Interest Rate

Percentage paid on borrowed funds or earned on deposits in a bank account.

Overdraft Facility

Bank feature allowing withdrawals that exceed the current balance to ease short-term cash flow.

Business Credit Card

Card providing short-term finance; features vary in limits, fees and interest rates.

Financial Control System

Processes and tools that monitor and manage a business’s financial performance and risks.

Budgeting

Forecasting future income and expenses to compare planned versus actual results.

Cash Flow Management

Ensuring sufficient cash is available to pay debts and expenses when due.

Accounts Receivable

Money owed to a business by customers for goods or services already supplied.

Inventory Control

System that minimises stock-holding costs while ensuring materials are available as needed.

Just In Time (JIT)

Inventory strategy where materials arrive exactly when required for production, reducing storage costs.

Auditing

Independent examination of accounting records and internal controls to ensure accuracy and compliance.

Source Document

Original paper or digital record of a transaction, e.g., receipt or invoice.

Cash Book

Ledger section recording all cash receipts and payments to monitor cash balance.

Income Statement

Financial report showing revenue, expenses and resulting profit or loss over a period.

Balance Sheet

Snapshot of assets, liabilities and owner’s equity at a specific date.

Bookkeeping Software

Digital tools like MYOB, Xero or QuickBooks that automate financial record-keeping.

Policy

Written set of broad guidelines directing employee behaviour and decision-making.

Procedure

Step-by-step instructions that implement a policy and establish consistent routines.

Policy Advantage

Provides clear expectations and consistent decision-making, reducing legal risk.

Policy Disadvantage

Time-consuming to develop, communicate and may restrict flexibility and innovation.

Supplier Selection – Price

Choosing vendors that keep input costs low to maximise profit margins.

Supplier Selection – Quality

Ensuring supplied materials meet required standards for final product excellence.

Supplier Selection – Reliability

Preference for vendors who deliver correct quantities on time.

Supplier Selection – Proximity

Choosing nearby suppliers to save transport time and costs.

Corporate Social Responsibility (CSR) Supplier

Vendor that meets ethical, social and environmental standards aligned with the business’s values.

CSR Supplier Benefit

Can reduce costs through efficient resource use and enhance brand reputation among consumers and investors.

CSR Supplier Limitation

Often incurs higher sourcing and monitoring costs; materials quality may initially be lower.

3D Printing

Additive manufacturing technology allowing precise on-demand production of objects.

Robotics in Manufacturing

Use of programmable machines to perform tasks more efficiently and accurately than humans.

Social Media Marketing

Promotion of products via platforms like Facebook or Instagram to reach target audiences.

Customer Database

Organised collection of customer contact details, purchase history and preferences for relationship management.

Privacy Act 1988

Federal law requiring businesses to protect customers’ personal information stored in databases.

Global Sourcing

Procuring materials or products from overseas suppliers to access lower costs and greater variety.

Exporting

Selling goods or services to overseas retailers, reducing reliance on the domestic market.