This unit applies to individuals who are responsible for providing contract bookkeeping services across all industries and working directly for organisations and small business owners.

FNSBKG402A

Establish and maintain a cash accounting system

ELEMENT

PERFORMANCE CRITERIA

1. Manage the chart of accounts

1.1. Chart of accounts is adjusted to incorporate and establish debtors and creditors as they arise

1.2. Debtors and creditors subsidiary ledgers are established as required

2. Process invoices, adjustment notes and other general ledger transactions

2.1. Invoices to debtors are raised and invoices to creditors are allocated with source documents coded and processed

2.2. Payments from debtors are received, processed and banked in accordance with organisational policies and procedures

2.3. Payments to creditors are made and processed in accordance with organisational policies and procedures

2.4. Adjustments are raised and allocated to correct invoices

2.5. Credit notes are raised for adjustments to invoices and other transactions are entered into the general ledger

3. Manage contra entries

3.1. Relevant persons are contacted and liaised with to verify contra deals

3.2. Reporting procedures and documentation for contra entries are completed in accordance with organisational policies and procedures and contra entries processed to update debtors, creditors and general ledgers

4. Identify and process bad debts

4.1. Bad debt status is verified through liaison with relevant persons and following attempts to work with debtors to clear debts

4.2. Reporting procedures and appropriate documentation are completed in accordance with organisational policies and procedures and bad debts processed to update debtors and general ledgers

5. Manage debt recovery

5.1. Activities and communication with debtors are reviewed in conjunction with relevant persons, if applicable, to establish adequacy of follow-up

5.2. Measures to collect monies, including the initiation of legal action and the seeking of expert advice, are undertaken in accordance with organisational policies and procedures

6. Prepare and produce reports and trial balance

6.1. Reports are produced and transactions in report are validated

6.2. Debtors and creditors are reconciled and relevant reports are produced with any necessary corrections made

6.3. Trial balance is produced and reports are presented and explained where necessary to relevant persons

Required skills

communication skills to:

build relationships, determine and confirm client requirements, using questioning and active listening as required

deal with debtors in an empathetic manner to clear debts if possible

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

numeracy and IT skills to:

accurately analyse, code, record and store data in accordance with organisational requirements

access and use appropriate financial management software, spreadsheets and databases

use internet information

analysis for accessing, interpreting and managing relevant financial data

literacy skills for interpreting documentation and compiling reports

self-management skills for complying with ethical, legal and procedural requirements

problem solving skills to identify any issues that have the potential to impact on the debt recovery process or outcome and to develop options to resolve these issues when they arise or refer to other professionals as appropriate

organisational skills, including the ability to plan and sequence work to provide a timely and professional service

teamwork skills to identify activities required with business owners and other relevant persons

Required knowledge

legal systems and procedures relevant to debt recovery and necessary preliminary steps, timing and acceptable avenues for recovering debts

differences between cash and accrual accounting

relevant industry codes of practice

relevant organisational policies, procedures and guidelines related to the processing of transactions and records

relevant statutory, legislative and regulatory requirements specifically with relation to ensuring that all bookkeeping activities undertaken meet requirements related to Activity Statements

manual and computerised accounting systems

concepts of double-entry accounting

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:

interpret and comply with relevant legislation

review accounts receivable and payable processes and identify bad and doubtful debts

deal with debtors in an empathetic manner

plan recovery actions in accordance with legal requirements

produce a trial balance.

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 data

access to a range of relevant and current industry information materials.

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 which may include formal examinations

setting and reviewing workplace projects and business simulations or scenarios

evaluating samples of work

accessing and validating third party reports.

Guidance information for assessment

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.

Organisational policies and procedures may include:

manual or computer system documentation

internal control guidelines

legal obligations

operations manuals

organisational policies and procedures including:

working with others

participating in ongoing learning

monitoring and evaluating own performance

managing own time and priorities

applying goals and visions

suspension of credit facilities

trading terms and credit limits.

Other transactions may include:

assets

capital

interest

loans

one-off purchases

private usage

taxes.

Relevant persons may include, but are not limited to:

accountants

debtors

directors

managers

owners

staff members.

Unit sector

Bookkeeping

This unit contains employability skills.