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Elements and Performance Criteria

1. Identify relevant information and establish chart of accounts
   • Consult business owner or manager to establish what business activities are undertaken, nature of entity and industry type
   • Identify existing material and examine for relevance in creating and/or modifying chart of accounts
   • Examine business operations in conjunction with tax agent and business owner or manager to identify accounting software required and determine reporting requirements
   • Establish chart of accounts and opening balances for assets, liabilities, equity, income, cost of sales and expenses
   • Refer prepared chart of accounts and balances for validation and authorisation by relevant persons
2. Analyse and verify source documents
   • Verify invoices and other source documents for accuracy and compliance with taxation requirements
   • Identify and investigate discrepancies between monies owed and monies paid according to organisational policy and procedures
3. Process receipts and payments
   • Collect payments and bank money received
   • Code and record receipts and payments in bookkeeping system on cash basis
   • File receipts and payments
   • Balance cash register against purchases and process takings in internal bookkeeping system
4. Set up and maintain petty cash system
   • Prepare expenditure authorisation record of encoded, recorded and filed expenditure
   • Reconcile and reimburse expenditure
5. Process and reconcile credit cards
   • Process credit card transactions against invoices and other source documents, and verify and reconcile against credit card statements
   • Process credit card payments in accordance with organisational policy and procedures
6. Manage bank reconciliations and prepare and produce reports
   • Verify processed transactions promptly against bank statement on receipt of statement
   • Process and verify bank entries and reconcile bank statement to balance as per bookkeeping system
   • Produce validated reports in line with business needs in timely manner, and make corrections as required

Performance Evidence

Evidence of the ability to:

establish client files and set up manual and computerised bookkeeping system on a cash basis

thoroughly check invoices, receipts, payments and balances outstanding

use bank account and cash reconciliation processes

establish a basic chart of accounts

carry out bank reconciliations and prepare reports

follow organisational procedures and legislative requirements in conducting all activities.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

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Knowledge Evidence

To complete the unit requirements safely and effectively, the individual must:

explain the differences between cash and accrual accounting

describe the key accounting and reporting requirements for different types of business entities

explain bookkeeping activities necessary to meet the requirements of activity statement statutory, legislative and regulatory requirements

outline relevant industry codes of practice

describe organisational policy and procedures that relate to processing accounts and transactions

outline possible reasons for discrepancies between monies owed and monies paid

outline the different features of manual and computerised accounting systems.

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