Business Unit 2 AOS 2

legal and govt regulations

broad range of rules and laws that govern how a business operates

3x legal requirements

• business name registration

• registering a domain name

• taxation compliance

legal requirements: business name registration

• Prohibit anyone else from trading under a similar name

• Australian Securities and Investments Commission (ASIC) is responsible for business name registration

• Owner must have Australian Business Number (ABN)

legal requirements: domain name

• Online presence - address of the business’ website on the internet

• Unique and represents its activities

• Easy to remember and spell for customer ease

legal requirements: tax compliance

• The ATO is responsible for administering and collecting tax for the federal government

• A TFN must be obtained for a business if a partnership or company is being established

• Sole trader uses personal TFN when dealing with the ATO

2x trade practice legislations

• work health and safety regulations

• consumer protection and fair competition

trade practice legislation: work health and safety regulations

• Business owner is legally responsible for implementing health and safety practices in the workplace (Work Health and Safety Act 2011)

• worksafe insurance

  • administers work health and safety regs

  • inspect work sites and prosecute employers for breaches of health and safety requirements

  • provides workcover insurance if workers are injured or ill

trade practice legislation: consumer protection and fair competition

• Federal and state laws implemented to ensure businesses and consumers are protected from unfair trading practices

• competition and consumer act

  • laws that promote fair trade across the nation

• consumer guarantees

  • Australian Consumer Law protects consumers who purchase goods and services from businesses

  • Set of rights and obligations in relation to the supply of goods and services

  • Suppliers and manufacturers automatically provide guarantees on products

  • Failure to meet guarantee → customer right to ask for remedy through repair, replacement or refund under ACL.

external professionals

• freelancers

• bookeepers

• recruiters

• sales professionals

• marketing consultants

• IT technicians

freelancers

• Independent worker who charges businesses or individuals for work on a per-job basis.

  • refers to employment relationship with the business they work for

bookkeepers

Assist a business in keeping and processing financial records

recruiters

Used to find the right staff and address human resource needs — understand what the business needs

sales professionals

People trained to find and persuade people to consume a product

marketing consultants

Raise awareness of a business’s products and brand with their target markets — advertising and other forms of communication with potential customers to increase brand awareness → increase sales

IT technicians

Support the technological needs of the business such as setup of servers and softwares and troubleshooting problems

bank account

a seperate financial account set up by a business to manage finances

• must be kept seperate to the owner

factors affecting choice of bank account

• interest rates

• overdraft facility

• credit cards

factors affecting choice of bank account: interest rates

Determines how much money the business will earn on the money they have in the bank account OR how much they have to repay on loans

factors affecting choice of bank account: overdraft facility

• Allows business to withdraw more money than they have available in their account

• Important feature for businesses that might temporarily fall low on cash flow

factors affecting choice of bank account: credit cards

• Seperate credit card to pay for business expenses can be convenient for the owner

• Different features, including maximum amount and interest rate

financial control systems

procedures used by a business to monitor and control the allocation and usage of its financial resources.

3x financial control systems

• budgeting

• cash-flow management

• control of accounts receivable

FCS: budgeting

• wstimation of the business’ financial performance for a given period in the future - prepared monthly, quarterly or annually

  • Ability to compare actual results with prediction allows business to question why certain targets were met or why results were better than anticipated

FCS: cash-flow management

• the process of planning, monitoring and controlling the movement of cash into and out of a business.

  • keep track of money that is owed to the business and chasing up outstanding debts

  • withholding future supplies to customers who are late in paying their accounts/ have outstanding amounts owing

FCS: control of accounts receivable

• keeping track of outstanding invoices or payments that a business is owed.

  • A sale has been made, but the money is still owed (accounts receivable)

  • Offering multiple payment methods makes it easier for customers to pay.

  • Use incentives (e.g. discounts, gifts, loyalty rewards) to encourage early payment.

  • Apply late fees to discourage overdue payments.

Auditing

financial control system that tests and evaluates a business’s accounting processes and internal controls to ensure accuracy and reliability. It can be conducted internally by employees or externally by independent auditors.

3x record keeping strategies

• source documents

• cashbook

• income statement

RKS: source documents

• Original paper documents recording transactions

• Provide basic data necessary for the production of financial reports

• Info from these documents are recorded into a journal, keeping a chronological summary of all transactions.

RKS: cash book

• Two sections - cash receipts and cash payments

• Allows business owner to:

  • keep tight control on cash

  • monitor cash-flow position (money coming in and out of the business)

  • determine the cash balance

RKS: income statement

• Used to help a business calculate how much net profit has been made over time by recording sales.

• An income statement shows:

  • the amount of income/revenue earned

  • costs or expenses incurred in earning that revenue

  • whether a profit or loss has been incurred in the period under review

• By examining figures from previous income statements, business owners can make comparisons and analyse trends to help evaluate the financial performance.

importance of record keeping strategies

• Track performance – monitor sales, expenses, and profitability over time.

• Meet legal and tax obligations – provide evidence for BAS, GST, and income tax reporting.

• Support decision-making – use reliable data to plan budgets, forecast trends, and manage cash flow.

importance of financial control systems

procurement

the process of finding, acquiring and purchasinf resources from suppliers

Factors that influence the choice of suppliers

• price

• quality

  • high quality materials to sell high quality goods

• reliability

  • quick and timely delivery to ensure sales and rep

• proximity

  • closer = lower costs, save time

• CSR

  • sustainable procurement decisions consider environmentam, social and economic impacts (TBL)

Evaluating sourcing socially responsible suppliers

• (+) improve business reputatuion as members of community will perceive that the business is meeting wider community expectations

• (+) more likely to attract customers who are aware of CSR being implemented due to shared values = more success

• (-) increased costs (fair wages, sustainable materials, local)
  (-) if changing to socially responsible suppliers, business need to work with suppliers to ensure that quality is on par/superior with competitors

policy

written set of broad guidelines that guide decision-making expected behaviour within an organization

procedures

series of actions that enable a policy to be put into practice

types of policies

• anti-discrimination, equal opportunity

• occupational health and safety

• privacy policies

evaluating policies

• (+) employees understand what is expected of them with respect to standards of behaviour and performance

• (+) provide framework/standard for consistent decision making and clear actions in routine situations so that employees do not continually need to ask the managers/owner what to do

• (-) researching and writing policies and procedures may require legal expertise and may be costly

• (-) difficult to communicate policies through business (large ones especially), and it can be time consuming to implement, enforce and monitor them.

importance of abiding by legal requirements

• Ensures the business operates within the law and avoids legal penalties.

• Protects the rights of employees, customers, and other stakeholders.

• Promotes fairness, equality, and ethical conduct in the workplace.

technological influences in..

• marketing

• manufacturing

• remote work

technology in marketing

• Social Media Advertisement may need to be considered due to its positive impact on a business

• Business cannot control what online consumers will say about the product

• Online consumers freedom to review and crticize a good or service

technology in manufacturing

• consider whether tech currently available is cost-effect or whether traditional methods are more practical

• consider that while it may be expensive and require maitanance, it will be less expensive than manual labour in the long run

remote work

• reduces overhead expenses associated with providing additional office space

• reduces travel time which may suit lifestyle choices

technological development

the improvement and creation of tools or systems to make tasks easier or more efficient.

globalisation

the process by which countries become interconnected through the exchange of goods, services, technology, and ideas across international borders.

overseas suppliers and resources

• wider range of affordable raw materials and finished products

• able to source materials that are not available locally for cheaper

customers and overseas retailers

• Access to international markets allows for businesses to expand their customer base

• Developing contacts with overseas retailers - business becomes exporter

• Business owner needs to experience how the business will be conducted in the new environment - see overseas market first hand, investigate local pricing, etc