SITXFIN003 Manage finances within a budget

Assessment2

Learner ID 2612

Learner Name

Learner Email

Learner ID Ravinder Singh

Learner Name Ravinder Singh

Note: Plagiarism/Cheating is a serious offence. If a learner is

foundplagiarising/cheating, it may result in a penalty of suspension/cancellation of
learner’s enrolment. In submitting their work, learners must be aware of
college’sPlagiarismandAcademic MisconductPolicy available in Learner handbook,
college’s website and administration
Contents

LEARNER INSTRUCTIONS FOR ASSESSMENT2.........................................................................................................4

ASSESSMENT2 BRIEF - PRACTICAL/KNOWLEDGE OBSERVATION ASSESSMENT..............................................5
LEARNER’S DECLARATIONS.......................................................................................................................................10
APPENDIX1 – Team Goal Planning Template...............................................................................................................14
APPENDIX2 – Implementation action plan.....................................................................................................................23
APPENDIX3 – Delegation Worksheet.............................................................................................................................26
RECORD OF ASSESSMENT2.......................................................................................................................................29

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
LEARNER INSTRUCTIONS FOR ASSESSMENT2

General instructions

 Complete all Complete all parts within this task

 Observation requirements outlined in the task instruction
 Your assessor will conduct observation tasks
 Simulated tasks can be conducted partly online, simulated classroom environment, or access to an actual
workplace
 Refer to your organisation or simulated policies and procedures provided as required
 To clarify the requirements of the tasks, ask your assessor to rephrase where possible. Unfortunately, your
assessor will not be able to assist you in completing the task
 You are needed to submit a soft copy to your assessor via KCBT LMS (MOODLE) before the due date.
 Do not use plagiarism, penalty and disciplinary action applies as per KCBT plagiarism policy.
 If you need any acceptable adjustments made to the assessment task, talk to your assessor, who will establish
a fair and flexible approach to your needs. The appropriate adjustment applied will NOT, in any circumstances,
jeopardise the results required to achieve a satisfactory result.
 Feedback will be provided formally; the trainer will post the feedback in your portal when using LMS upon
marking your assessment and or via a unit outcome letter.
 For complaints and appeals, please refer to the student handbook.
 For reassessment requirements, see your student handbook or seek advice from your assessor

o Reassessment: - If you do not achieve the required satisfactory outcome, you will be given one further
attempt with good feedback. An Assessor will talk to you about a resubmission if your assessor marks any
of your answers incorrect for this assessment task. One of the following will be required by you:

Submit in writing the questions that were incorrect.

Or the questions that were incorrect are to be submitted verbally.

 To pass this assessment, you must receive a satisfactory outcome for each of the outlined tasks, refer to the
assessment policy available via the LMS, website or student handbook.
 Follow submission instructions at all times.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
ASSESSMENT2 BRIEF - PRACTICAL/KNOWLEDGE OBSERVATION
ASSESSMENT
What is the objective of this task?

To demonstrate performance application for this task, you should demonstrate your ability to take responsibility for
budget management where others may have developed the budget. It requires the ability to interpret budgetary
requirements, allocate resources, monitor actual income and expenditure, and report on budgetary deviations.:

 Manage a budget for a business over a three-month period that meets the specific business’ needs
 Undertake at least two of the following to inform management of the above budget:

o Discussions with existing suppliers

o Evaluation of staffing and rostering requirements
o Evaluation of impact of potential roster changes
o Review of operating procedures-Appendix 1
o Sourcing new suppliers

 Monitor income and expenditure and evaluate budgetary performance over the above budgetary life cycle
 complete financial reports related to the above budget within designated timelines and using correct budget
terminology.

Time allocation:Refer to your training plan/Learner program guide/timetable

Evidence summary/Submission instructions: Submit completed appendices as instructed in theLearner

assessmentAssessment2. Observation will be submitted by your assessor.

Assessor submission - Assessors must complete the assessor observation checklist

The observation checklist

 The observation tool is to be completed by your assessor while observing you perform the assessment task.
 The observation tool will be used during the demonstration
 Your assessor will accurately record their observations in the observation checklist and detail the observable
behaviours.

On the day of the observation assessment, the assessor will:

 Provide a brief on the task for approx. Thirty minutes

 Observe that you perform the job as per the instructions provided.
 Ensure the assessment is conducted safely.

After the assessment, the assessor will:

 Ask questions as required to fill any identified gaps

 Provide you with constructive feedback and provide suggestions for improvement

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
Resources:

 Learner guide
 PowerPoint Presentation/Handouts
 Relevant organisation documents. Attachments (Support material)

o Attachment 1 Blind-Staffing-Workbook.
o Attachment 2 Break-Even-Analysis-Workbook
o Attachment 3 Cash-Flow-Workbook
o Attachment 4 Front-of-House-Schedule-Planner
o Attachment 5 Key-Product-Usage-Report
o Attachment 6 Kitchen-Schedule-Planner
o Attachment 7 Menu-Analysis-Workbook
o Attachment 8 Menu-Engineering-Workbook
o Attachment 9 Payroll-Accrual-Workbook
o Attachment 9 Payroll-Accrual-Workbook
o Attachment 10 1st Quarter Planned financial outcome(The quarterly Budget)
o Attachment 10AMonth 1 profit and loss statement
o Attachment 10B1st Quarter Actual financial outcome
o Attachment 11 Petty-Cash-Log
o Attachment 12 Restaurant-Inventory-Workbook
o Attachment 13 Tip-Reporting-Form
o Attachment 14 Weekly-Prime-Cost-Workbook
o Attachment 15 Weekly-Purchase-Log
o Attachment 16 Weekly-Sales-and-Labor-Workbook
o Attachment 17 Weekly-Sales-Projections
o Attachment 18 Weekly-Sales-Workbook
o Attachment 19 Beverage-Analysis-Workbook
o Attachment 20 Plan - Restaurant Business Plan
o Attachment 21 SOPs - Budgeting and forecasting

Appendices (Complete as part of the task)

 Appendix 1 Quarterly Restaurant Budget Worksheet

 Appendix 2 Update the budgets
 Appendix 3Variance and deviation report
 Appendix 4 Fiscal Management Analysis report
 Appendix 4A Email template
 Appendix 5 Assessor observation checklist

NoteYour assessor will observe you demonstrating your ability to perform all parts applicable to this assessment. A
satisfactory outcome outlined in the observation checklist is required for each criterion to pass this section
successfully.

Physical resources and/or equipment:

 Assessor
 Classmates
 Workplace colleagues
 Suitable facilities-Simulated environment
 Suitable facilities-Workplace
 Insert any other physical resources applicable to this assessment task

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
Assessment conditions

Skills must be demonstrated in an operational tourism, travel, hospitality or events business operation or activity for
which a team is managed. This can be:

 an industry workplace
 a simulated industry environment.

Assessment must ensure access to:

 Computers, printers, and accounting software packages

 Budgets for specific projects, events, or operational activities
 Others with whom the individual can discuss budget components; these can be:
 Those in an industry workplace who are assisted by the individual during the assessment process; or
 Individuals who participate in role plays or simulated activities, set up for the purpose of assessment, in a
simulated industry environment operated within a training organisation.

Assessors must satisfy the Standards for Registered Training Organisations’ requirements for assessors.

Task Icons

Appendix document to be completed

Discussion or Consultation
e.g., one-on-one face-to-face

Indirect observation your assessor will use the observation checklist to make a judgement based on
the information provided in the appendix

Reading requirement

Virtual conference meeting

Your assessor will observe you participate in a doing activity

Attach a document

Face to face round table meeting

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
Introduction to your simulated work task:

This assessment tool contains the summative assessment instruments and the instructions to complete the
assessment. The simulated assessment tasks are outlined in the assessment plan below. The overall task is broken
down into a series of mini tasks based on a simulated job role relating to SITXFIN003 Manage finances within a
budget. By performing this task, you will demonstrate the skills and knowledge you have learned and apply best
practices.

Before commencing the task, consult with your assessor ensuring you and the assessor must be satisfied with your
readiness for assessment. Have you completed all learning activities provided and submitted the learning record of
participation and accompanying logbook? Before starting, you should ensure:

 You have good knowledge of the unit content

 You have completed the required learning activities and thoroughly covered the learning content
 You have a clear understanding of the assessment requirements and the industry expectations that relate to
the assessment of this study
 You have asked the necessary questions to seek clarification if you are unsure of any requirements

You must complete the tasks in the order outlined below, i.e., 1.1, 1.1.1 etc., as the sequence of events outlined in
the task places you in an environment similar to that of a job or workplace where you will be guided to perform the
tasks associated with the selected job used to evaluate your performance. Please ensure that you read the
instructions provided with these tasks carefully and follow the advice provided in the body of the task that provides
essential information for you to complete the assessment successfully.

Competency for this task is based on satisfactory performance for all task criteria outlined in the assessment task and
used by the assessor to form a judgement using the assessor observation checklist.

 Your assessor will make direct (face to face) or indirect observations (workplace documentation referred to
as an appendix) of your performance using the assessor observation checklist.
 Both direct and indirect observations will be recorded in the assessor observation checklist.
 A satisfactory outcome outlined in the observation checklist is required for each criterion before achieving
competency.
 The appendixes (simulated workplace documentation) and the observation checklist must be satisfactory to
pass this assessment task.
 Direct and indirect observation is a vital method for competency-based assessment as it requires you to
demonstrate not only what you know but also what you can do.
 You will have access to the checklist. It is recommended that you review it before commencing the task and
familiarise yourself with the observation requirements to know what is expected of you.
 Your assessor will use the observation checklist to record their direct and indirect observation to enable them
to observe in a focused way, to take structured overall notes that can be referred to when making the
assessment decision, to provide enhanced feedback to you and to enhance the objectivity of the assessment
decision.

Your assessor will arrange access to:

 Resources listed on page 6

 A suitable place to complete activities that replicates a workplace environment suited to the task instructions.
For example, a meeting will be in a suitable meeting space
 Interactions with other people (classmates as directed by the assessor). Your assessor will allocate persons
you are to work with generally made up of classmates within the group; however, at times, it can be external
people, and on occasion, your assessor may participate
 Vital workplace simulated documentation and resources to support the assessment task to meet industry
requirements and workplace expectations

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
Double-check you have submitted all documents using the following summary as a guide.

Appendixes should be completed in this assessment and submitted as one document unless specified attachments.
Therefore, follow the instructions for submission below and throughout the task instructions in the time frame
specified on your training plan/timetable or RTO assessor. It is essential to review all submission instructions
throughout the task and sign the cover sheet at the end of the workbook before submitting it.

Outcomes

The table below identifies theresults awarded to you for each assessment task

Outcome Description

Awarded to you if you demonstrate satisfactory performance to the specified standard

Satisfactory (S)
against each criterion outlined in the assessment task
Awarded to you if you do not demonstrate satisfactory performance to the specified
standard against each criterion outlined in the assessment task. For all areas deemed NS,
Not Satisfactory (NS)
you will need to undergo reassessment. Speak to your assessor to explain the process
and what areas are required to be improved

Competent (CO) This result can only be achieved once all assessment tasks are deemed satisfactory

Not yet competent This result is awarded if you fail to achieve a satisfactory result within any assessment
(NYC) tasks. Your assessor will arrange for a reassessment to take place

Feedback

You will have the opportunity to review your result and the feedback after the assessment has been graded, so you
will not receive the assessment back. As such, you are encouraged to keep a copy of the assessment tool for your
feedback

Assessment summary

For an overview of the assessment, see the assessment summary as per your training plan

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
LEARNER’S DECLARATIONS
Assessment2 Learner declaration
Before assessment tasks commence, I must:
 Advise my assessor of any special need’s considerations
 Refer to my Learner handbook for procedures to appealing judgment outcomes when appealing a
decision
 Review the reassessment requirements as outlined in the Learner handbook
 I understand when the reasonable adjustment will be applied
 I agree to comply with all the requirements and conditions applicable to all assessments
 I permit the KCBT to use my assessment submissions for moderation/validation purposes.
I declare this assessment:

 is my work based on my study.

 where applicable, references for all material and resources used in this assessment’s content regardless
of the reference material used, such as books, articles, reports, internet searches, or any other document
or personal communication.
 is my work.
 is not copied from other students work in part or whole
 is not plagiarized

Record any variation, i.e., if you have not covered any of the points mentioned above that must be listed here

N/A

I confirm all instructions have been read and understood. My responsibilities and requirements for this assessment
are explained.

Click or tap to enter a

Learner Signature Date
date.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
YOUR SIMULATED TASK STARTS HERE

Before you start, read information below

The restaurant profit-and-loss statement and budget formats differ from that of other businesses in that they make it
easier to identify the four major checkpoints restaurants need to monitor - sales, prime cost, controllable profit and
net income.

 Sales: While this is obvious, the top line is the single biggest profit-determining factor on the profit-and-loss
statement. Strong sales volume can make up for quite a few management mistakes and cost control glitches
-- at least for a while anyway. It is good to compare current sales with the same period of the prior year and
to a budget or forecast. It is also helpful to look at check average and customer counts when comparing
sales from one period with another.

 Prime cost: Prime cost is the total cost of sales plus all payroll-related costs, including wages, benefits,
payroll taxes, workers' compensation, and other similar expenses. Keeping close tabs on your prime cost is
critical for several reasons; it represents your two biggest and most volatile cost areas and is really one of
the few costs over which you have control.

In table-service restaurants, the generally accepted rule says that prime cost should run no more than 65
percent of total sales. Many of the larger, casual-theme chain operators can keep their prime cost 60
percent or less but for most table-service independents achieving a prime cost of 60 percent to 65 percent of
sales still provides the opportunity to achieve a healthy net income provided a restaurant has a normal cost-
and-expense structure in the other areas of their profit-and-loss statement.

 Controllable Income: Sometimes referred to as "operating income," controllable income reflects only those
expenses over which the operations personnel have any real control or influence. This makes it a good
benchmark for evaluating management's overall effectiveness at "running the restaurant."

 Net income: Finally, what's left after all the expenses are paid, and hopefully with no brackets around it that
indicate a loss. The importance of this number is quite apparent; however, it may be helpful to compare "Net
Income" with one or more prior periods to see if you're gaining or losing ground. Another important measure
of profitability is to compare annual Net Income with the total investment you have in the restaurant. This is
your "return on investment."

In the example shown below, it's easy to see how each of these four areas is reflected on the financial
statement. This particular format includes key ratios and allows the owner to see how to compare results
with the annual budget in both dollars and percentages; the importance of percentages is addressed later. In
other words, it shows how successful or unsuccessful management was in executing the budget. It provides
a definitive measure of what's working and what's not.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
  Variance ($) = Actual ($)-Budget ($)
 Variance (%) = Variance ($)/Budget ($) x100(%)
 Food Cost (%) = Food Cost ($)/Food sale ($) x100(%)
 Food Cost ($) = Food Cost (%)*Food sale ($)
 Controllable Income=Total Net Sales-Prime Cost-Total Other Controllable Expenses
 Prime Cost=Total Cost of Sales + Total Cost of Labor
 Restaurant Operating Income=Controllable Income-Total Non-Controllable Expenses
 Net Income Before Income Taxes= Restaurant Operating Income-Corporate Overhead and Interest
Expense
 Sale Actual (%)=Sale Actual ($)/Total Gross Sales($) x100%
 Cost of Sale Actual (%)=Sale Cost Actual ($)/Sale Actual ($)x100%
 Other Costs (%)=Costs Actual ($)/Total Net Sales ($) x100%
 Sale Budget (%)=Sale Budget ($)/Total Gross Sales($) x100%
 Cost of Sale Budget (%)=Sale Cost Budget ($)/Sale Budget ($)x100%
 Other Costs Budget (%)=Costs Budget ($)/Total Net Sales ($) x100%

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
APPENDIX 1 INSTRUCTION

Your role: newly appointed role as the head chef at the restaurant.

‘On the Water is a new Mediterranean restaurant on the Sunset Strip. The Restaurant has an ala carte restaurant,
and a drive-through and walk-in bottle shop.

You are the head chef of ala carte restaurant. It seats 210 people and is open for lunch and dinner for seven days a
week. The restaurant promotes a luxury high tea on every weekend morning for dine in and take away.

The management team has developed an operational budget for the business based on previous budgets which
include food costs, labor costs, equipment expenses, and for other resources such as take away containers, cutlery
and crockery. Budgets are developed on a quarterly basis and each department has quarterly and monthly budget
targets. Monthly budgets can be adjusted during a quarterly cycle if circumstances within the department change.’

1.1 As part of your newly appointed role as the head chef at the restaurant,you are required to allocate funds in a 3-
months operational budget template (appendix 1) using the quarterly budget(attachment 10)andmonth 1 profit
and loss statement (attachment 10A). Conduct business budget allocation from the figures provided in the profit
and loss statement and divide the total profit and loss figures. Ensure when allocating funds, the total column is
in whole dollars to match the quarterly budget(attachment 10).Successfully budgeting can help your
establishment guarantee that they have the funds necessary to meet obligations, as well as enough resources to
deal with emergency situations.

1.1.1 Use the budgeted figures (appendix 1) based on the quarterly budget(attachment 10) as a basis for discussion
to allocating funds. Before allocating funds for the nextmonths, you will need to discuss, negotiate, and decide
on establishment priorities with your management team for the next 2 monthsbecause of recent expansion. It
is important you have a clear understanding of what your establishments strategic priorities are before you
can determine how much funding to provide different arears of the establishment to meet the establishment
objectives.

 You must complete Analysis report and statical report from Appendix 1 excel spread sheets

To understand the establishment priorities, review the operating procedures (attachment 21),mission
statement and vision statement (attachment 20)and meet with the decision makers to discuss and clarify
strategic direction with a goal to maximise profitability overall. It is important to discuss any expenditure
changes with colleagues before implementing them. It is important to consult the personnel listed above to
ensure knowledge of the establishment is increased, including how provide specific details where:

 More staff are needed in certain operational areas and what funding is needed to achieve this
 Overheads can be reduced to free up funding to be used in different areas
 Savings can be achieved
 Adjustments can be made and ensure the changes do not impact other areas to make a loss.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
 APPENDIX 1 Submission instructions

Complete the Quarterly Restaurant Budget Worksheet template (Appendix 1) and demonstrate
your ability to create and allocate funds in a 3-month operational budget template (Appendix 1)
using the quarterly budget(Attachment 10).

Your assessor will use the information in(Appendix 1)and the assessor observation checklist
(Appendix 5) to determine if performance meets the satisfactory level expected by the industry

Complete the attached excel templates(Appendix 1) ensuring you label the document as follows.

Student ID_Your fist name_A2 SITXFIN003Appendix 1

Your assessor will directly observe you conducting a meeting to discuss the allocation of funds
according to budget and agreed priorities. The assessor will use the assessor observation
checklist (Appendix 5)

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
APPENDIX 2INSTRUCTION

Your role: newly appointed role as the head chef at the restaurant
Team: (classmates as directed by your assessor made up of managers from relevant departments, accounting
professionals, managerial agents, and purchasing staff)

The following events have taken place during the month3 budget period.

 Prices for fruit and vegetables have increased as a result of out of season.
 Meats price have risen slightly due to the hotel has decided to use all halal products.
 A major wine supplier has been running an in-house promotional campaign, with staff product knowledge
training provided to help increase sales.
 The high tea menu will be added to the new menu from month3, and its introduction is being promoted in
February throughout the restaurant.
 Specific equipment will be need for high tea presentation.

1.1.2.1 To promote awareness of budget control you should make the following points of discussion a priority. At the
meeting you need to stress the importance of:

 Expected income in the budgetary period

 Cover strategies that will maximise income
 Cover strategies that will minimise overheads
 How much funding each area will get
 Specific funding for events
 Specific funding for development
 Funding for recruitment and staff training
 Funding for marketing and advertising
 Recording and reporting protocols ensuring all personnel are clear and confident about how financial
data is recorded and reported

1.1.2.2 With your team (classmates as directed by your assessor made up of managers from relevant departments,
accounting professionals, managerial agents, and purchasing staff) to discuss and update the budget
planning document (appendix 2)

 Discuss the importance of the essential elements of the sales forecast.The sales of food, drinks, and
merchandise take a while to grow but will be near $2 million in the second year. Update the monthly
sales figures in the updated budget document (appendix 2) to align with theattachment 10A.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
  Outline your discussion with current suppliers.
Role: Current supplier-Your Assessor, Finance team-Your classmates

o Running a restaurant requires a lot of supplies and ingredients.

o You must find new sources for all your foods and beverages. The costs for all those goods can vary
widely, so you can negotiatewithcurrent suppliers to get the best possible prices.
o Inform your finance team of the agreed lock in prices down by 20% achieved because of your
discussions with suppliers.
o Update the budget for food and beverages costs and sales.(appendix 2).
o Assumptions include a 20% decline in Costs across all areas impacted by foods and beverages
price down. Check for accuracy and adjustments as required

1.1.2.2.1 When discussing the desired outcomes with your colleagues (classmates as directed by your assessor
outlined above) ensure you:

 Take the necessary steps so all colleagues voices are heard when talking matters of budget
outcomes
 Use effective communication to convey your message through others
 Have an effective discussion that involves all personnel and demonstrate your ability to:
o Value everyone’s opinions regardless of whether you agree
o Encourage and accept all views regardless of whether you agree or disagree
o Involve the correct people in the discussion as appropriate based on the position within the
establishment, knowledge, and experience in the matter at hand
o Communicate clearly using both verbal and non-verbal communication skills
o Compromise when necessary
o Use active listening techniques
o Listen, clarify, and confirm information
o Be open minded to innovative ideas and points of view
o Show trust in your colleagues

1.1.2.3 Maintain detailed records to resource and finalise the following record keeping documents in Appendix 2.

APPENDIX 2 Submission instructions

Upon completion of Appendix 1, update the budget planning document (Appendix 2)

Your assessor will use the information in (Appendix 2)and the assessor observation checklist
(Appendix 5) to determine if performance meets the satisfactory level expected by the industry

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
 Complete the attached excel templates (Appendix 2) ensuring you label the document as follows.

 Student ID_Your fist name_A2 SITXFIN003 Appendix 2

Your assessor will directly observe you conducting a meeting to discuss the allocation of funds
according to budget and agreed priorities. using the assessor observation checklist (Appendix 5)

APPENDIX 3INSTRUCTION

1.2 1st Quarteractual figures have been finalised and you have been provided with the profit and loss statement
(attachment 10B). Part of your job role is to regularly monitor financial activity such as income and expenditure
and evaluate budgetary performance over the above budgetary life cycle. Your CEO has asked you to provide a
variance report (appendix 3) showing the difference between the planned financial outcomes and actual
outcomes for the descriptions and categories provided on the variance report.

1.2.1 The main goal of budget monitoring is to ascertain that your expenses fall below your income. If you have
more money going out than coming in, then that's your cue to adjust. For any variations / budget deviations
identified you are to identify the cause and consider improvement options to ensure the initial budget is
adhered to. When monitoring budgets versus actuals for 1 st Quarter, the types of information you need,
identify include but not limited to:

 Budget for the area of activity for 1st Quarterprofiled for the year to date. When profiling the budget,
planned expenditure/income patterns should be considered. For certain types of expenditure
(particularly non-staff costs) and income it is likely that expenditure and income will peak and through at
points in each month.
 Actual expenditure and income to date
 Future expenditure and income commitments
 Balance of budget remaining. When actual expenditure and income and commitments together are
compared to the month budget, this will indicate the balance of budget remaining at the review point
 Forecast outturn. This is the expected position against budget at the end of the quarter after considering
all anticipated expenditure and income. The forecast outturn may not be equal to the original budget
 Analysis and explanation of any positive or negative variances when comparing expenditure and
forecast outturn to budget, together with a documented action plan for one area to address adverse
variances
 Interpret and use budget deviations day-to-day work operations
 Calculate budget estimates and scenarios for performance improvement.
 Budget deviations and deficiencies and develop options for improved budgetary performance.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
1.2.2 To complete the variance report (appendix 3), Calculate the variances form budget estimates versus actual
(attachment 10A and B) using the excel spreadsheet (appendix 3) for 1st Quarter.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
 APPENDIX 3Submission instructions

Complete the provide a variance report (appendix 3) showing the difference between the planned
financial outcomes and actual outcomes for the descriptions and categories provided on the
variance report.

Your assessor will use the information in appendix 3 and the assessor observation checklist
(appendix 5) to determine if performance meets the satisfactory level expected by the industry

Complete the attached excel templates (appendix 3) ensuring you label the document as follows.

 Student ID_Your fist name_A2 SITXFIN003 Appendix 3

Your assessor will directly observe you conducting a meeting to discuss the allocation of funds
according to budget and agreed priorities. using the assessor observation checklist (Appendix 5)

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APPENDIX 4 INSTRUCTION

Role: CEO-Your assessor

Management Team: (classmates as directed by your assessor made up of managers from relevant departments,
accounting professionals, managerial agents, and purchasing staff)

1.2.3 Provide your CEO and management team with an opportunity to investigate appropriate options for more
effective management of deviations. To do this you will write a detailed annual fiscal management report
(appendix 4) for the1st Quarterbudget versus actuals -refer to appendix 3). Record your findings in the report
using the report template (appendix 4). Your CEO has asked for the report to be produced by the end of
business tomorrow. Ensure your report details:

 1st Quarter budget reviews ensuring you acknowledge the following changes impacting the last month
budget

o A price increase to cost offoods in the Month1 because the meats price has risen slightly due to the
hotel has decided to use all halal products that has caused concern and requires you to undertake
analysis of new suppliers
o Assumptions include a 20% decline insales across all areas impactedfrom month2.by roster
changes due to staff isolation requirements and mandatory wage increase. Check for accuracy and
adjustments as required
o Assumptions include 2.5% increase to kitchen staff wages. Check for accuracy and adjustments as
required

 Variations / deviations including reasons by reporting on the most used variances:

o PURCHASE PRICE VARIANCE -Purchase price variance results when actual price which is paid
for materials is more/less than the budgeted cost for such materials.
o LABOR RATE VARIANCE -Labor rate variance results when the actual price which is paid as
wages is more/less than the budgeted cost for wages. For instance, labor is paid at $ 10 per hour,
but are paid at $ 12 in actual.
o VOLUME VARIANCE -volume variance means actual quantities sold or consumed and budgeted
quantity expected to be consumed or sold

 Make the following considerations and recommendations to ensure expenditure is with budget
allocations when dealing with deviations and outline significant changes required to be made to the
budget that may mean:

o Reducing or increasing funding

o Accepting overspending in a time
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 o Scrapping or rethinking priorities
o Rethinking purchasing levels, wage increases and inexperienced staff

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  Make at least one recommendation for more effective management of variations / deviations
 Provide a modified budget that provides a more reliable reflection of actual expenditure and income in
consideration with your findings (forms part of appendix 4 – fiscal report)

1.2.3.1 When writing thequarterly fiscal report (appendix 4) ensure you outline all information and data related to the
company's financial status during the fiscal quarter in question. (Refer to appendix 2, and appendix 3).
Ensure you use budget terminology that provides a detailed estimate of projected spending and revenue for
the current quarter and document clear recommendations based on budget information and reports (Refer to
appendix 2, and appendix 3). When collating your report (appendix 4) ensure you:

 Outline 2 main costs that exist in the establishment and explain how one of these areas of spending
could be reduced without harming the customer experience
 Undertake appropriate research to investigate innovative approaches to budget management by
outlining the benefits of partnering and consultation and incorporating market research

1.2.3.1.1 Define and communicate the benefits and disadvantages of innovative approaches to budget management
and record your findings in the report. Defining approaches will require you to meet your relevant
personnel (classmates as directed by your assessor) to discuss why it is worth adopting innovative
approaches, and why they will help the establishment to control finances more effectively. Involve all
employees in the meeting who deal with any aspect of establishment finances as these staff will ensure
the innovative approaches are implemented correctly. It is important to note a lack of information may lead
to a lack of financial control potentially leading to the failure of new strategies and approaches.

1.2.3.1.2 Record your findings in the space allocated in the report (appendix 4)

1.2.3.1.3 Review all establishment financial documentation and provide management with the opportunity to define
the benefits and disadvantages of new budgetary approaches and record your finding in the space
allocated in the report (appendix 4). Discuss in your response:

 How can you define new approaches for the benefit of your colleagues?
 What information should you provide your colleagues with?
 Why it is important to define the benefits of any new approaches to budgetary management before
communicating them to your teams?

1.2.3.1.4 Consider in your report (appendix 4) the impacts on customer service levels and colleagues in developing
innovative approaches. In doing this determine how will innovatively approaches to managing finances
affect the customer experience.

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1.2.3.1.5 Present a clear and logical recommendation for budget and financial management in your establishment
based on current financial controls and on research carried out. Describe what information you will use and
how you will present it. To persuasively make a case for a particular approach or strategy provide in your
conclusion unmistakable evidence wherever possible to suggest why it will work should it be considered.
You can include evidence such as but not limited to:

 Evidence of clear failures or weaknesses

 An outline as to why change needs to happen with a focus on current strategies (attachment 20) and
approaches which have proven to be inadequate
 A focus on financial data (contained in financial data – attachment 10, 10A,10Bappendix 1, 2, and
3)which may show:

o Poor estimation of costs and income

o Examples of overspending
o Examples of significant variances and deviations
o Examples of wastage
o Examples of poor funding allocation
o Examples of objectives and goals that have not been met because of poor control of finances

 Evidence of the benefits associated with proposed changes

 Evidence that strategies and approaches are fit for adoption
 Back up evidence why proposed changes will work in the establishment
 Expert views as to why recommendation will work
 Evidence that innovative approaches will benefit both customers and employees

Include in your response

 Strategic vs. Tactical Financial Management

 Importance of Financial Management for the three pillars of sound fiscal governance
 Objectives of Financial Management
 Scope of Financial Management including:

o Planning
o Budgeting
o Managing and accessing risk that outlines market risk, credit risk, liquidity risk: and Operational
risk.
o Procedures
o Functions of Financial Management
Managing cash flow functions
Cash management and finance management functions
Managing financial controls functions

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1.2.3.1.6 Provide responses to your findings for the above in the financial report appendix 4 ensuring you prepare
and present clear and concise information to enable informed decision making by your management team.
To do this

 Choose your words deliberately, constructing your sentences carefully, and using grammar properly.
 By writing clearly and concisely, you will get straight to your point in a way your audience can easily
comprehend.

APPENDIX 4 Submission instructions

Complete the provide a fiscal management report (appendix 4) showing the difference between
the planned financial outcomes and actual outcomes for the descriptions and categories provided
on the variance report.

Your assessor will use the information in appendix 4 and the assessor observation checklist
(appendix 5) to determine if performance meets the satisfactory level expected by the industry

Your assessor will directly observe you conducting a meeting to discuss the allocation of funds
according to budget and agreed priorities. using the assessor observation checklist (Appendix 5)

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APPENDIX 4 – FISCAL MANAGEMENT ANALYSIS REPORT
INTRODUCTION:

This report relates to 1st Quarter has been a challenging quarter for the company, with sales and operating
expenses surging because of the weak hospitality market. Fortunately, the strategies we have identified in the
previous months have contributed much to the stable growth of our cash flow and revenue. As we strive to
continue improving, we need to continue to look at what we could still do to accelerate sales.
4.1 PROFIT AND LOSS STATEMENT - 1st Quarter
Projected Actual
Financial Accounts Variance Percentage
Amounts Amounts
Total Sales -Income (Example) $3,785,000 $ 3,790,000 $5,000 0.1 %
Total Cost of Sales – (COGS) $ 9,45,560 $7,65,568 $1,79,992 19.03%
Total Cost of Labor $12,11,160 $12,22,160 $11,000 0.9 %
Controllable Income $14,29,200 $17,55,752 $3,26,552 22.84 %
Restaurant Operating Income $ 14,15,700 $ 17,42,252 $ 3,26,552 23.06%
Net Income Before tax $ 14,05,335 $ 17,33,387 $ 3,28,052 23.34 %
4.2 BUDGET VS. REVENUE (right click on the table to edit the data in excel)

BUDGET VS. REVENUE

4000000

3500000

3000000

2500000

2000000

1500000

1000000

500000

0
Total Sale Total Costs of Sale Labor Costs Net Income Before Tax

Budget Actual Variance

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 4.3 MANAGEMENT ACTION ITEMS:
Develop options for improved budgetary performance.
Actionable Owner Target Date of
Issues raised Recommended action
(Y or N) Your name Completion

We'll reach out to new suppliers and discuss Jaswinder 30/06/2022

A price increase to
the recent increase costs. We will only get Singh
cost of goods in the
into a long-term partnership with them if they
last quarter that has
are prepared to accept lower product
caused concern and Y
pricing.
requires you to
undertake analysis
of new suppliers

Jaswinder
We consult with all team members and Singh 05/07/2022
A 20% decline in
create new projects to increase sales in
sales across all
following year.
areas impacted by
roster changes due Y
to staff isolation
requirements and
mandatory wage
increase

I would like to meet with employees, discuss Jaswinder 08/06/2022

2.5% increase to the current situation, and raise wages over Singh
Y
kitchen staff wages time if the number of hours worked
increases as well.

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 4.4 Make the following considerations and recommendations as part of your monitoring of income and
expenditure activity (appendix 3) and outline the budgetary control process used to evaluate the budgetary
performance over the budgetary life cycle to ensure expenditure is within budget allocations set by your
establishment

From the budget analysis versus actuals for 1st Quarter you know how your budgeted amounts stack up
against actual costs. You are now able to inform management and make recommendations to ensure a
stronger financial and competitive performance by your establishment moving forward. Provide the following
report to inform management of considerations relating to:

a) Improved spending decisions budgetary analysis

b) Improved cash flow to help you plan spend to accommodate upcoming expenses
c) Insight into potentially problematic workflows, vendors, or market trends that are affecting spend and
creating negative variances and the process and efficiency improvements that support positive variances.
d) Accurate and complete financial statements, variance reports, and forecasts

4.4.1 To ensure effective budgetary control, 1st Quarter budget have effectively monitored and managed. Explain
the monitoring and managing budget process undertaken

verifying the reported revenue and expenses are accurate; comparing "actuals" to
Monitoring budget "budgets," figuring out discrepancies, spotting trends, and pointing out any differences
to the budget owner

deciding what steps to take to keep the budget under control based on the outcomes of
the monitoring.
Managing budget

4.4.2 The budgetary control process ensures funds are being utilised in accordance with the required level and
quality of output from the allocated resources. Explain the following process undertaken as part of the
analysis:
The budget holder must study and comprehend the financial data at hand in order to
determine the actual status. To account for any pending transactions, they will need to
How did you establish know how current the information is. These could include both creditors and debtors.
the actual position? The budget owner will also need to be aware of any expenditures that have been
"committed" to, or ordered but not yet delivered, products and services.
. The acquired data must be compared to the budgeted amounts established at the
start of the fiscal year. If the actual revenue and expense headers match the ones that
were initially specified, this comparison ought to be straightforward.
How did you compare
the actual with budget?
A "variance" is the difference between actual income and expense and projected
income and expense. Variance analysis is a crucial tool in the process of controlling the
budget.
Variance is a term used in the field of budgetary control to describe the discrepancy
between actual revenue and expenditure and budgeted (planned) revenue and
How did you calculate expenditure.
variances?

The following are some of the reasons for variances:

How did you establish • An increase or decrease in the price of a product
reasons for variances? • Changes in wages
• Variations in sales
How did you take action . Only by taking remedial action in response to the discrepancies can budgets be kept
to exert control? under control. Sometimes the cause of the variation can be explained without the need
for further action. For instance, timing variations. In this area, the discrepancy will
gradually get less as the real revenue and expense numbers start to organically match
the budget. Action is necessary in response to variations that result from fundamental
shifts, such as a growth in service demand. This is required to reestablish fiscal control.

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  Delay activities
 Redefine objectives
 Redefine eligibility criteria
 Change the nature of the service and how it is delivered
 Cease or reduce services

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 4.4.3 Outline the following causes of labour rate variances:
Incorrect Standards The labor standard may not reflect recent changes in the rates paid to employees.
(Example) For example, the standard may not reflect the changes imposed by fair work and
applicable awards

The complete compensation package may take into account additional pay for
Pay Premiums overtime or shift differentials. For instance, a rush order would require additional
funding to meet a short deadline.

A particular job classification may be expected by a labour standard to perform a

particular task, but in reality, another position with a different pay rate completes the
task. The task should be performed by a lower-level employee (at a lower pay rate),
Staffing Variances
yet even while the underlying criteria suggest that this should be the case, the only
individual capable of performing it may also be highly talented and hence highly
compensated. As a result, a scheduling conflict is to blame for the issue.
. A product that needs human processing may have had its components changed by
the engineering team, changing the amount of labour required during the production
Component Trade-offs
process. Instead of employing in-house workers to assemble many components, a
company can use a subassembly that is supplied by a supplier.

. The variance will be impacted if the labour cost includes benefits and the cost of
those benefits has changed. Recruiting external staff, such as temporary workers,
Benefits Changes
may produce a favourable labour rate variance because the company is probably
not paying their benefits.

How can your

establishment manage In order to address direct material discrepancies, increase the organization's service
Direct Material delivery rate..
Variances?

4.4.4 Explain the fixed overhead variances, identified in your analysis in relation to:

Budget Variances, or
differences between
actual and budgeted
amounts.

Describe instances
where actual costs are
either higher or lower
than the standard or
Fixed overhead volume variation is the difference between the amount anticipated
projected costs. An
for fixed overhead expenses based on production volume and the amount that is
unfavourable, or
ultimately absorbed. This variation is examined as part of the cost accounting
negative, budget
reporting package at the end of each month.
variance is indicative of
a budget shortfall,
which may occur
because revenues
miss, or costs come in
higher than anticipated.
Responses should be
relevant to appendix 3
variance analysis

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 4.4.5 Outline the cost reduction strategies recommended to inform management of future budget cost reduction
activity based on your findings of the most recent budget analysis (appendix 1 - 3)
Roles: Existing suppliers (your assessor)
Action item Recommendation
(Example) The establishments menus have certain items that, despite costing
Identify high-cost, low-profit
a lot to make, don’t sell very well. The recommendation is to replace them with
items in your menu
items that will sell
After discussions with existing
suppliers, you have decided to Faster-moving supply chains are often more cost-effective. Look for ways to
optimize your supply chain and get rid of bottlenecks and reduce wait times.
source new suppliers

After discussions with existing Relying on fewer suppliers can also help to reduce risk. With fewer providers
suppliers, you have decided to to deal with, your organisation can concentrate on safeguarding all relevant
minimize the number of risks along the supply chain. Your organisation will have more resources to
suppliers you use devote to compliance and other legal requirements.

After review of operating Findings from FIFO are more likely to be accurate. This is due to the ease with
procedures, it was decided to which stock profit may be calculated, making it simple to update your financial
incorporate the FIFO method records and saving you both time and money. It also implies that old stock isn't
into the establishment tallied again or kept dormant for an extended period of time.
After review of operating . One of the best ways to decrease costs is through inventory management.
procedures, it was decided to You need to know exactly what you have on hand as well as how much of
reduce food and beverage costs
each item there is. For every dollar you spend on inventory, you don't have a
use by discussing with existing
suppliers dollar.
No matter how fantastic your restaurant's management and food menu are,
After review of operating whether you believe it or not, if you don't have photos to showcase them, it
procedures, it was decided to won't matter what you do. Since people ultimately decide whether to visit your
implement a free online ordering restaurant based on images of the food and décor, you should display those
system on your website and any online meal ordering platforms you use. Verify that
the aesthetics complement your organization's logo and general image.
You will need to provide something in exchange if you want the other party to
Negotiating with your landlord agree to your request to raise your company's rate or conditions. Ward
and suppliers suggests moving the due date for the rental payment earlier in your negotiated
contract if you're talking with your landlord.

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 4.5 Cutting business costs is straightforward. But reducing expenditures without affecting the quality of your
products or service is more of a challenge. Even something as minor as the quality of paper you use can
reflect on your brand image.

So, when you embark on a cost-cutting exercise, you must keep in mind the impact any reductions in
spending will have on your customers. But there are ways that you can reduce costs without impacting on
quality.

Inform management of ways they can cut back on costs while retaining quality.
(Example) Explore the market to look for alternative suppliers that will provide
the same products at a lower price. Consider, too, if there are cheaper
alternative products that you could use that would not compromise quality and
Renegotiate with Suppliers
ask existing suppliers for discounts before you switch vendors. If current
suppliers know we are shopping around, they will be prepared to offer us a
better deal.
Even the smallest purchases benefit from economies of scale. Bulk purchases
result in cost savings on unit prices, shipping costs, and the expense of
processing purchase orders. However, you must weigh the advantages of
Buy in Larger Quantities
buying in bulk against the effect on cash flow and storage costs when making
your calculations. Bulk purchases, however, may result in significant cost
savings for a business.
Consider both the purchase price and your intended use while making your
decision. Think about any potential for increased training or efficiencies that
could help you reduce the amount of products you utilise. Examine the
Improve efficiency
production and delivery procedures for your goods and services. Is it possible
to produce the same good or offer the same service more effectively utilising
the same raw materials?
. Any area of a corporation is susceptible to waste. Materials may be
squandered if production batch sizes are not optimised. Paper is wasted and
resources could be stolen if documents are printed rather being stored online.
To start reducing waste, encourage your team to be more thoughtful about the
Reduce Wastage
things they use. Employees may be inspired to be more waste conscious if the
environmental effects of trash are emphasised. Enhancing security can help
you stop theft, and tracking waste from raw materials can help you determine
how to make your manufacturing operations more efficient.
. Businesses must operate efficiently in today's cutthroat market. You are
therefore unable to transport people. Examine the duties and results of each
employee. A worker should be informed that they need to improve their
Review Employee Productivity procedures if they aren't performing their duties properly. You must be strong
and fire the employee if the warning doesn't have the desired effect. Examine
your staff's workloads as well. Examine whether changing responsibilities will
lead to a decrease in the number of employees overall.
. Reducing energy costs is an efficient way to save costs without
compromising quality, and it will boost your business' environmental
credentials. Could you, for instance, use lighting that is more energy-efficient?
Cut Energy Usage Is it possible to partially meet your energy needs by installing solar panels on
your company's roof? There are numerous ways for a business to reduce its
electricity costs. If your company increases its energy efficiency, the
government may in some circumstances grant incentives.
Check your current funding methods to determine if there are any more
affordable alternatives. Overdrafts, for instance, are typically much more
expensive than fixed-term business loans. If you don't make your company
Review Finance Arrangements
credit card payments on time, you can be subject to higher interest rates. It is
preferable to pay off any debt as soon as you can if you have the money to do
so.
A significant quantity of past-due sales invoices could cause a cash shortage,
Reduce Days Sales Outstanding
which would be costly for you. If cash is held back in your receivables, you
(DSO)
may have to pay higher interest rates on your overdrafts and other loans. You
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 4.5 Cutting business costs is straightforward. But reducing expenditures without affecting the quality of your
products or service is more of a challenge. Even something as minor as the quality of paper you use can
reflect on your brand image.

So, when you embark on a cost-cutting exercise, you must keep in mind the impact any reductions in
spending will have on your customers. But there are ways that you can reduce costs without impacting on
quality.

Inform management of ways they can cut back on costs while retaining quality.
can make greater use of the money you save by collecting past-due payments.
Make sure you're on top of your collections as a result, and provide incentives
for them to pay you earlier.
Do you attend trade shows merely because you always have? Based on the
quantity of leads produced, have you estimated the return on investment (ROI)
of attending the event? It's all too simple to get lost in a marketing rut,
Refocus Marketing spending money on promotional activities and advertising without considering
the return on investment. Check your marketing budget to make sure you're
only spending it on initiatives that result in leads of the highest calibre. You
might get more for less money by refocusing your marketing efforts.

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 4.6 Make at least one recommendation and why for more effective management of variations / deviations
The efficacy of the management control function is essential to an organization's success. Management must
adhere to a set of processes after plans are put into action to ensure that they are carried out in line with their
original aim. In virtually every circumstance, the steps in the basic control process can be used to enhance
product quality, decrease waste, and boost revenue.

Higher costs are typically associated with better products, whereas lower prices are typically associated with
inferior goods. It's also critical to remember that subpar quality comes at a cost. A company's reputation could be
damaged by poor quality, which would also make it more expensive to fix or replace unsafe or broken products.
The cost of quality is determined by the time and effort put into developing and inspecting each individual
component of a product as well as the product as a whole. Therefore, it's simple to understand why a company's
capacity to achieve a cost-quality balance is essential.

4.7 Define and communicate the benefits and disadvantages of innovative approaches to budget management
and record your notes based on discussion with relevant personnel.
 Activity-based Budgeting
Activity-based budgeting (ABB) figures out how much money is required overall to reach the desired level
of activities (thus its name).
The first step in using this top-down approach is to identify and carefully examine each activity that
influences cost. When resources are allocated to achieve the level of activity that was predicted in
advance, this study will provide justification.

Benefits: 1. Enhanced efficiency: ABB gives a holistic view of the organisation by connecting each
function and department's spending to those functions and departments. Based on this insight, the
organisation is able to spot and close performance gaps as well as take advantage of any potential
possibilities.
2. Cost management: ABB provides improved cost containment, which boosts the bottom line, by
accounting for every activity that results in costs.

Disadvantages: 1. Suck out limited resources: ABB significantly increases workload and necessitates
labour and financial resources, just like any other discipline with structural ramifications.
2. Encourage short-termism: ABB prioritises the current objective over the long-term plan.

 Performance-based Budgeting (PBB)

Another cutting-edge strategy is performance-based budgeting (PBB), in which cash or budgets are
linked to certain goals.

With PBB, a list of objectives or desired results is initially established. These goals will then serve as the
foundation for the actions that the organisation expects to carry out and the costs involved.

Benefits: 1. Assign a distinct owner: PBB holds all parties involved accountable for the process by
specifying goals and objectives.
2. Prioritize important tasks: PBB is closely integrated into the larger strategy since it places a strong
emphasis on attaining the organization's goals and objectives. This aids management in determining
which tasks or duties are essential and prioritising them accordingly.

Disadvantages: 1. Demand participation: Performance budgeting necessitates both top-down and bottom-
up buy-ins, which worsens employee disengagement.
2. Promote subjectivity: Because this technique is by its very nature subjective, it promotes management
to base choices on intuition.

4.7.1 Discuss the advantages of a budget in relation to:

A budget functions as an agenda for strategic action. It makes one wonder how much a
Management and
person or business can afford. As a result, assessing and passing judgement on
control:
someone based on their ability is much simpler.

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 A budget makes it possible to evaluate the goals and regulations that will be used to
Evaluation of policies:
direct future spending choices.
A wise budget enables a company or individual to make the most of their current assets
Capital reinforcement
and funds in order to boost output and revenue.
If a firm or individual is aware of their financial condition and can precisely estimate
Promotes competition: their activities and operations in order to generate profits, a budget may help them
become more competitive.
. The meticulous and exacting process of creating a budget guarantees that the
Systematic and
objectives and actions of the business or person are properly assessed and put into
organized:
action.
A budget outlines a plan to follow in order to make the most of both resources and
Constructive
funds, ensuring that none is wasted.

4.7.2 Discuss the disadvantages of a budget in relation to:

. A budget is made up of a number of presumptions and findings. If the business
Inaccurate and strategy or execution altered, it would have an effect on the prediction for the entire
unrealistic budgets budget plan. As a result, outcomes from budget plans are usually unclear and
inaccurate.
. An organization's policies or a person's goals are used to build a budget, which results
Inflexible budgets in decision-making. However, there is no opportunity to alter the budget if the financial
condition must be assessed in light of market developments.
Finance oriented: . The needs and wants of the people are not considered in the budget. Although profit
budgets is the motivating factor, people's needs are qualitative.
Building a financial strategy is what budgeting entails. On the other side, creating a
Time-consuming: budget takes time. It must examine all feasible aspects of a company or a person
before making any investments or spending toward a certain goal..
. Failure to follow a budget plan can result in numerous internal disputes and rifts,
Conflicts:
which can cause business inefficiencies.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
 4.7.3 Complete the comparison table for advantages and disadvantages of budget

ADVANTAGES DISADVANTAGES

A budget offers a clearly defined strategy that aids in An accurate and time-consuming format for calculating
better decision-making and goal achievement. a sum of expenses and earnings is a budget.
The senior members of an organisation are in charge of A budget plan does not take into account the views of
creating a budget plan that will effectively manage every employee, which can occasionally be
spending.. demoralising..
. A solid plan may aid in the more efficient use of There is a constant change taking place in the industry
resources and the management of financial or market. Hence the framed plan may not be as worthy
expenditures. as it may appear in the beginning.
The organization's budget shows how well its A company's aim attained by one department may be
employees work together to achieve a common goal. difficult to achieve by the other departments.
Budgeting can occasionally be far more expensive than
The organization's budget shows how well its
the actual company plan, which not all sorts of
employees work together to achieve a common goal.
businesses may be able to pay.
A budget is set on assumptions and predictions as If a budget is set at low levels that might bring no
there is scope to change. benefits to an organization

4.8 Provide management with the opportunity to define the benefits and disadvantages of new budgetary
approaches and record your finding in the space allocated in the report (appendix 4). Discuss in your
response:

How can you define

encouraging the development of new skills
new approaches for the
Increase employee morale and aid in their personal growth
benefit of your
colleagues?

What information A well-developed team with acquired ability and talents may be able to help you
should you provide your achieve in your field. Describe why fostering strong skills and all of the above are
colleagues with? crucial.

Budgeting is a method of expressing a company's objectives to internal stakeholders,

Why it is important to including CEOs, department heads, and anybody else with an interest in or
define the benefits of responsibility for the operation of the business. Budgeting requires managers to take
any new approaches to both revenue and expenses into account.
budgetary management Managers take part in budget creation and are aware that every expense needs to be
before communicating related to the company's strategic goals. They understand that managing their
them to your teams? departments is lot easier when they create a budget that is in line with the strategic
plan..
The budget will be easy to create since it will have been created by capable
Outline two (2) reasons
management.
by defining the benefit
It has a few benefits to use this approach. Since management will place the greatest
of new approaches to
emphasis on the organization's overall growth, the budget will be based on a corporate
budget management
plan rather than a divisional plan. The strategic plan will be linked to the strategic
are vital
objectives because senior management was involved in its formulation.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
 4.9 Consider the impacts on customer service levels and colleagues in developing innovative approaches. In
doing this determine how innovative approaches to managing finances affect the customer experience.

Give at least three 3 examples

Give heed to what customers have to say.

Consider what workers have to say.

Delegate more authority to your workers.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
4.10 Present a clear and logical recommendation for budget and financial management in your establishment
based on current financial controls and on research carried out. Describe what information you will use and
how you will present it. To persuasively make a case for a particular approach or strategy provide in your
conclusion unmistakable evidence wherever possible to suggest why it will work should it be considered. You
can include evidence such as but not limited to:

 Evidence of clear failures or weaknesses

 An outline as to why change needs to happen with a focus on current strategies (attachment 20) and
approaches which have proven to be inadequate
 A focus on financial data (contained in financial data – attachment 10, 10A,10Bappendix 1, 2and 3) which
may show:

o Poor estimation of costs and income

o Examples of overspending
o Examples of significant variances and deviations
o Examples of wastage
o Examples of poor funding allocation
o Examples of objectives and goals that have not been met because of poor control of finances

 Evidence of the benefits associated with proposed changes

 Evidence that strategies and approaches are fit for adoption
 Back up evidence why proposed changes will work in the establishment
 Expert views as to why recommendation will work
 Evidence that innovative approaches will benefit both customers and employees

Include in your response

 Strategic vs. Tactical Financial Management

 Importance of Financial Management for the three pillars of sound fiscal governance
 Objectives of Financial Management
 Scope of Financial Management including:

o Planning
o Budgeting
o Managing and accessing risk that outlines market risk, credit risk, liquidity risk: and Operational risk.
o Procedures
o Functions of Financial Management

Managing cash flow functions

Cash management and finance management functions
Managing financial controls functions

Provide responses to your findings for the above in the financial report appendix 4 ensuring you prepare and
present clear and concise information to enable informed decision making by your management team. To do
this

 Choose your words deliberately, constructing your sentences carefully, and using grammar properly.
 By writing clearly and concisely, you will get straight to your point in a way your audience can easily
comprehend.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
 Present a clear and logical recommendation for budget and financial management in your establishment based on
current financial controls and on research carried out. Describe what information you will use and how you will
present it. To persuasively make a case for a particular approach or strategy provide in your conclusion
unmistakable evidence wherever possible to suggest why it will work should it be considered.
The completion of the monthly financial closure, comparing actual spending to predicted
expenditures, and ensuring you tactically meet auditor and tax responsibilities are all
governed by financial management processes.
Strategic vs. Tactical
Financial
Financial management is a vital component of FP&A (financial planning and analysis) and
Management
visioning activities, where data is used by finance specialists to assist line-of-business
colleagues in making more strategic investment decisions, spotting opportunities, and
building sustainable businesses.
• Managing, or seeing to it that each department makes a contribution to the broader
objective while staying within budget and on schedule.

Importance of • Determining the necessary financial occurrences for the organisation to achieve its short-
Financial and long-term goals. For instance, in order to plan scenarios, leaders want to know how
Management things are currently going.

• Providing up-to-date financial data and details on important performance indicators to

help business executives choose the optimal strategy for implementing plans (KPIs).
. • Increasing profits by warning clients that growing raw material costs could raise the
price of the goods they are supplied with.

• Constantly monitoring the company's liquidity and cash flow to ensure it has enough
money to meet its obligations.
Objectives of
Financial
• Ensuring adherence to local, national, and sector-specific regulations.
Management
• Developing financial scenarios based on the firm's current state of health and projecting
a wide range of potential outcomes in light of market conditions.

• Strong relationships between investors and the board of directors

Scope of Financial Management
. •Planning allows for the grouping of staff, capital spending, T&E, and operational and
indirect costs.
• The financial manager shares this information with colleagues and projects how much
Planning
money the company will need to keep its cash flow positive, support development or the
addition of new products or services, and deal with unforeseen events.

. • Most businesses have a master budget in addition to smaller budgets for things like
operations and cash flow; these budgets can be either fixed or variable.
• The financial manager is in charge of handling the available funds for the business to pay
Budgeting
for obligations like mortgages or rent, salaries, raw materials, employee T&E, and other
expenses. In a perfect society, there would be surplus funds for emergency savings and to
support new business enterprises.
a bearing on the investments made by the company, public
corporate reporting, and stock performance. A pandemic that
Market risk affects restaurants or the transition of retail to a direct-to-consumer
model are just a few examples of business-specific financial risks
Managing and that may be mentioned.
accessing risk
Consequences of customers not paying their bills on time, which
causes a company to be unable to fulfil its obligations, can have a
Credit risk
severe impact on creditworthiness and valuation, limiting the ability
to borrow at advantageous rates.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
 Present a clear and logical recommendation for budget and financial management in your establishment based on
current financial controls and on research carried out. Describe what information you will use and how you will
present it. To persuasively make a case for a particular approach or strategy provide in your conclusion
unmistakable evidence wherever possible to suggest why it will work should it be considered.

Finance departments need to keep an eye on current cash flow,

Liquidity risk predict future cash needs, and be ready to release working capital
as necessary.

These numerous financial divisions are not familiar with them. It

might address topics including the possibility of a cyberattack,
whether or not to purchase cybersecurity insurance, business
Operational risk
continuity plans, disaster recovery strategies, and crisis
management procedures in the event that a senior executive is
accused of fraud or inappropriate behaviour.
. The finance analyst creates policies to ensure the finance team collects and transmits
financial data such invoices, payments, and reports in a secure and accurate manner.
Additionally, the firm's financial decision-making and approval processes are outlined in
Procedures these written guidelines.

There are policy and procedure templates available for a variety of organisations, including
this one for NGOs, so businesses don't have to start from scratch.
. Additionally, it's critical to monitor your cash flow. The financial
manager is responsible for making sure there is enough money on
Managing cash flow hand to pay for daily costs like paying employees and buying raw
functions materials for production. This calls for a practise called as cash
management, which entails monitoring the flow of money into and
out of the company.
Financial management also includes revenue recognition, or
disclosing the company's revenue in accordance with conventional
Functions of Cash management
accounting practises. Balanced accounts receivable turnover ratios
Financial and finance
are crucial for strategic cash management and cash conservation.
Management management
Although it may seem straightforward, it isn't always the case: in
functions
some cases, customers may not pay for weeks or even months
after obtaining your services.
The monitoring of financial controls also includes comparing the
company's financial performance to its objectives and spending
Managing financial
plans. Financial management analyses line items on the
controls functions
company's financial statements using financial ratio analysis as
one method.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
APPENDIX 4A INSTRUCTION

1.2.3.2 Advise your CEO and relevant management team of the budget status in relation to the budget by emailing
(appendix 4A) the report (appendix 4) by the close of business tomorrow and address the email to:

 Senior management including your CEO and keep them updated as much as possible
 Heads of department(supervisors) given they have control over income and expenditure, so it is vital
they are updated on the status

1.2.3.2.1 When authoring the email (appendix 4A), ensure you:

 Start with a meaningful subject line by keeping it brief, but before you write the subject line think about
your intentions. The subject line should summarize why you are contacting them.
 Use correct budget and financial terminology
 Address the email appropriately. Everyday language such as ‘Hey’ may be OK to send to a colleague
or friend, but it is not the best choice for professional inquiries. On the other hand, ‘Dear’ is too formal.
A simple ‘Hi’ or ‘Hello’ is more appropriate.
 Keep the email concise and to the point, so there is no confusion as to what you need to be completed
and by when
 Make it easy to read by adding indentations or spaces between paragraphs for light reading and
skimming. In addition, keep your most valuable information at the beginning of each paragraph so that
they can recognize your most important points.
 Don’t use slang or emojis. Do not use slang, as professional emails require a particular formal
language level. In addition, pick a simple typeface and don’t add too many colours, if any at all.
 Be kind and thankful
 Remember to be kind and friendly as they do you a big favour as they are typically terribly busy and
taking time out of their day to talk
 Re-read the email. Minor grammatical errors can make or break a professional’s opinion of you. Even
when you write quick and short emails, it can easily include mistakes.
 Use an appropriate signature, i.e. Two appropriate closers are ‘Best regards’ and ‘Thank you. Don’t
forget to add your name after choosing a closer.

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
APPENDIX 4A – EMAIL TEMPLATE
From
Jaswinder
(Your name)
To Ravinder Singh

Cc
*******************
Subject FISCAL MANAGEMENT ANALYSIS REPORT

Attachment FISCAL MANAGEMENT ANALYSIS REPORT

Dear,

Due to the weak hotel economy, the company had a terrible first quarter, with sales and operational expenses
soaring. Thankfully, the techniques we mentioned in prior months have helped us to maintain stable cash flow and
sales growth. As we seek to develop, we must consider what else we can do to boost sales.Concerns over price
increases in the preceding quarter prompted a hunt for new suppliers. We'll contact new suppliers and talk about
the recent surge in meat prices. Only if they are willing to accept reduced product pricing will we enter into a long-
term collaboration with them.
All sites affected by roster changes witnessed a 20% decline in sales due to staff isolation restrictions and a
mandatory pay boost. We'll have a meeting with the whole workforce to collect suggestions for how to boost sales
in the coming year. We'll have a meeting with employees to analyse the situation, with the objective of increasing
pay if the amount of hours worked also rises.

Thank you

Best regards,
Jaswinder

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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
 RECORD OF ASSESSMENT2
Task 2 Knowledge & Practical Application Assessment Workbook 2 - Simulated Knowledge/Practical Observation
To be completed by the assessor. For assessment completed via the LMS then this document is not required to
be completed

Unit Code and Name: SITXFIN003 Manage finances within a budget

Learner Name Assessor Name Ravinder Singh

ASSESSORS NOTE Determine the Learner’s ability to apply and perform criteria satisfactorily. Review the
knowledge evidence by clicking on the link https://training.gov.au/Training/Details/SITXFIN003. Marking should be
in line with the model answers provided as applicable as this assessment task underpins the knowledge evidence.
All questions deemed satisfactory to achieve a satisfactory outcome for this task. If an NS outcome supplied for
any section or questions relating to this task, apply the reassessment process. In this case, inform the Learner in
detail “why” an NS outcome was provided. Record your reasons in the section labelled “Not satisfactory (NS)
outcomes.” See below for recording appropriate information
Assessment activity

The learner has completed all the assessments requirements for this unit of competency and deemed:
Task 2 Knowledge & Practical Application Assessment Workbook 2 - Simulated Knowledge/Practical Observation

 Appendix 1-Observation criteria 1.1, 1.1.1

 Appendix 2- Observation criteria 1.1.2,1.1.2.1, 1.1.2.2, 1.1.2.2.1, 1.1.2.3
 Appendix 3- Observation criteria 1.2, 1.2.1, 1.2.2
 Appendix 4 - Observation criteria 1.2.3, 1.2.3.1, 1.2.3.1.1, 1.2.3.1.2, 1.2.3.1.3, 1.2.3.1.4, 1.2.3.1.5,
1.2.3.1.6
 Appendix 4A - Observation criteria 1.2.3.2, 1.2.3.2.1
 Appendix 5- Appendix 4 andObservation Checklist

Attempts Date of submission Outcome Date of Outcome

Click or tap to enter a ☐Satisfactory Click or tap to enter a

1st Attempt
date. ☐Not Satisfactory date.
Click or tap to enter a ☐Satisfactory Click or tap to enter a
2nd Attempt
date. ☐Not Satisfactory date.
Click or tap to enter a ☐Satisfactory Click or tap to enter a
Re-assessment
date. ☐Not Satisfactory date.

Not satisfactory (NS) Outcomes

Attempt Number Why has an NS (Not Satisfactory) outcome been applied?

Appendix ____ is(are) Not Satisfactory. Incorrect answers have been highlighted in
1st Attempt
yellow and an assessor left comments in red colour.
2nd Attempt N/A
If a Not Satisfactory assessment result is received, refer the Learner to the
Complaints and appeals
complaints and appeals process outlined in the Learner handbook
Reasonable Adjustment N/A
Assessor Feedback to the learner:
Where can the Learner improve? Feedback MUST be constructive and not generic

Assessor declaration
I acknowledge I have informed the Learner about the following information:
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Keystone College of Business & Technology RTO Code 41183 CRICOS: 03425F SITXFIN003 Manage finances within a budget
  Performance and knowledge evidence requirements conducted on and off the job (as required)
 I am a qualified assessor as determined by the KCBT, and thus all assessment outcomes will be
determined by me
 Of all aspects of the Learner agreement
 Of the reassessment process
 Of their responsibilities and ensured they are understood
 Of their rights concerning the complaints and appeals process
 Reasonable adjustment when there are assessment constraints present
Record any variation, i.e., if you have not covered any of the abovementioned points, that must be listed here.
N/A
I confirm that I have explained the assessment requirement as outlined above before the commencement of the
assessment activity
Click or tap to enter a
Assessor Sign Date
date.

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