BSBFIM501

Manage budgets and

financial plans
Learner Guide
 BSBFIM501
Manage budgets and financial plans

2
 Table of Contents
Table of Contents .............................................................................................................................. 3
Unit of Competency ............................................................................................................................. 6
Performance Criteria............................................................................................................................ 7
Foundation Skills .................................................................................................................................. 8
Assessment Requirements ................................................................................................................... 9
Housekeeping Items .............................................................................................................................. 10
Objectives .............................................................................................................................................. 10
1. Plan financial management approaches ....................................................................................... 11
Basic principles of accounting ............................................................................................................ 12
1.1 – Access budget/financial plans for the work team......................................................................... 13
1.2 – Clarify budget/financial plans with relevant personnel within the organisation to ensure that
documented outcomes are achievable, accurate and comprehensible................................................ 13
1.3 – Negotiate any changes required to be made to budget/financial plans with relevant personnel
within the organisation .......................................................................................................................... 13
Budget/financial plans ....................................................................................................................... 13
Long-term planning ............................................................................................................................ 14
Medium-term planning ...................................................................................................................... 15
Option appraisal ................................................................................................................................. 15
Budgeting ........................................................................................................................................... 16
Budget structure ................................................................................................................................ 17
Computer-based budget management.............................................................................................. 17
Closing accounts................................................................................................................................. 18
Managing joint budgets ..................................................................................................................... 19
Activity 1 ............................................................................................................................................ 20
1.4 – Prepare contingency plans in the event that initial plans need to be varied ............................... 21
Contingency plans .............................................................................................................................. 21
Activity 2 ............................................................................................................................................ 23
2. Implement financial management approaches ............................................................................. 24
2.1 – Disseminate relevant details of the agreed budget/financial plans to team members ............... 25
Communication .................................................................................................................................. 25
Who is informed?............................................................................................................................... 25
Traditional ways to inform about budget allocations ........................................................................ 27

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 Goods and services tax (GST) ............................................................................................................. 27
Activity 3 ............................................................................................................................................ 28
2.2 – Provide support to ensure that team members can competently perform required roles
associated with the management of finances ....................................................................................... 29
Support for team members ............................................................................................................... 29
Activity 4 ............................................................................................................................................ 31
2.3 – Determine and access resources and systems to manage financial management processes within
the work team........................................................................................................................................ 32
Hardware and software ..................................................................................................................... 32
Human, physical or financial resources ............................................................................................. 32
Record keeping systems (electronic and paper-based) ..................................................................... 34
Specialist advice or support ............................................................................................................... 35
Activity 5 ............................................................................................................................................ 36
3. Monitor and control finances ...................................................................................................... 37
3.1 – Implement processes to monitor actual expenditure and to control costs across the work team
............................................................................................................................................................... 38
Ledgers and financial statements ...................................................................................................... 38
Activity 6 ............................................................................................................................................ 40
3.2 – Monitor expenditure and costs on an agreed cyclical basis to identify cost variations and
expenditure overruns ............................................................................................................................ 41
Organisational record keeping and auditing...................................................................................... 41
Record keeping requirements of Australian Taxation Office............................................................. 41
Minimum tax-keeping records ........................................................................................................... 42
Activity 7 ............................................................................................................................................ 44
3.3 – Implement, monitor and modify contingency plans as required to maintain financial objectives
............................................................................................................................................................... 45
Implementing, monitoring and modifying contingency plans ........................................................... 45
Activity 8 ............................................................................................................................................ 46
3.4 – Report on budget and expenditure in accordance with organisational protocols ....................... 47
The need for reports .......................................................................................................................... 47
Report components ........................................................................................................................... 47
Sources of information ...................................................................................................................... 49
Forward reports ................................................................................................................................. 50
Activity 9 ............................................................................................................................................ 51
4. Review and evaluate financial management processes ................................................................. 52

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4.1 – Collect and collate for analysis, data and information on the effectiveness of financial
management processes within the work team ..................................................................................... 53
Cash flows .......................................................................................................................................... 53
Profit and loss statements ................................................................................................................. 54
Petty cash ........................................................................................................................................... 54
Activity 10 .......................................................................................................................................... 55
4.2 – Analyse data and information on the effectiveness of financial management processes within
the work team and identify, document and recommend any improvements to existing processes .... 56
Identify, document and recommend improvements ........................................................................ 56
........................................................................................................................................................... 57
Activity 11 .......................................................................................................................................... 58
4.3 – Implement and monitor agreed improvements in line with financial objectives of the work team
and the organisation .............................................................................................................................. 59
Monitoring and reporting budgets .................................................................................................... 59
Forecasting expenditure trends ......................................................................................................... 60
Activity 12 .......................................................................................................................................... 61
Skills and Knowledge Activity ............................................................................................................. 62
Major Activity – An opportunity to revise the unit ................................................................................ 63

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Unit of Competency
Application

This unit describes the skills and knowledge required to undertake financial management within a work
team in an organisation. It includes planning and implementing financial management approaches,
supporting team members whose role involves aspects of financial operations, monitoring and
controlling finances and reviewing and evaluating effectiveness of financial management processes.

It applies to managers in a wide range of organisations and sectors who have responsibility for ensuring
that work team financial resources are used effectively and are managed in line with financial objectives
of the team and organisation.

No licensing, legislative or certification requirements apply to this unit at the time of publication.

Unit Sector

Finance – Financial Management

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Performance Criteria
Element Performance Criteria
Elements describe the Performance criteria describe the performance needed to
essential outcomes. demonstrate achievement of the element.

1. Plan financial 1.1 Access budget/financial plans for the work team
management 1.2 Clarify budget/financial plans with relevant personnel within
approaches the organisation to ensure that documented outcomes are
achievable, accurate and comprehensible
1.3 Negotiate any changes required to be made to
budget/financial plans with relevant personnel within the
organisation
1.4 Prepare contingency plans in the event that initial plans
need to be varied

2. Implement financial 2.1 Disseminate relevant details of the agreed budget/financial

management plans to team members
approaches 2.2 Provide support to ensure that team members can
competently perform required roles associated with the
management of finances
2.3 Determine and access resources and systems to manage
financial management processes within the work team

3. Monitor and control 3.1 Implement processes to monitor actual expenditure and to
finances control costs across the work team
3.2 Monitor expenditure and costs on an agreed cyclical basis to
identify cost variations and expenditure overruns
3.3 Implement, monitor and modify contingency plans as
required to maintain financial objectives
3.4 Report on budget and expenditure in accordance with
organisational protocols

4. Review and evaluate 4.1 Collect and collate for analysis, data and information on the
financial management effectiveness of financial management processes within the
processes work team
4.2 Analyse data and information on the effectiveness of
financial management processes within the work team and
identify, document and recommend any improvements to
existing processes
4.3 Implement and monitor agreed improvements in line with
financial objectives of the work team and the organisation

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Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the
performance criteria that are required for competent performance.

Skill Performance Description

Criteria

Reading 1.1, 1.2, 2.1, 2.3, 3.1- ➢ Interprets and analyses information to determine activities
3.4, 4.2, 4.3 required

Writing 1.1, 1.4, 4.1-4.3 ➢ Records information in correct forms and prepares
materials which convey detailed and factual content in
accordance with internal procedures

Oral 1.2, 1.3, 2.1-2.3 ➢ Presents information about financial issues and
Communication requirements to a range of audiences using structure and
language to suit the audience
➢ Uses active listening and questioning to clarify information
and to confirm understanding

Numeracy 1.1-1.3, 2.1-2.3, 3.1- ➢ Uses a wide range of mathematical calculations to analyse
3.4, 4.1-4.3 numeric information in budgets or financial plans

Navigate the 2.2, 3.3, 3.4, 4.3 ➢ Recognises, understands and adheres to organisational
world of work requirements in undertaking own work

Interact with 1.2, 1.3, 2.1, 2.2, 3.1, ➢ Uses a range of strategies to connect, collaborate and
others 2.3, 4.2, 4.3 cooperate with other work colleagues in activities
requiring collective effort and diverse skills and knowledge

Get the work 1.1, 1.4, 2.3, 3.1-3.4, ➢ Uses logical processes in planning, implementing and
done 4.1-4.3 evaluating complex tasks and developing alternative
strategies in achieving goals and timelines
➢ Uses a range of digital technologies to access, filter,
compile, integrate and logically present complex
information from multiple sources

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Assessment Requirements
Performance Evidence

Evidence of the ability to:

➢ Use financial skills to work with and interpret budgets, ageing summaries, cash flow, petty cash,
Goods and Services Tax (GST), and profit and loss statements
➢ Communicate with relevant people to clarify budget/financial plans, negotiate changes and
disseminate information
➢ Prepare, implement and modify financial contingency plans
➢ Monitor expenditure and control costs
➢ Support and monitor team members
➢ Report on budget and expenditure
➢ Review and make recommendations for improvements to financial processes
➢ Meet record keeping requirements for the Australian Taxation Office (ATO) and for auditing
purposes.

Knowledge Evidence

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

➢ Describe basic accounting principles

➢ Identify and explain the relevant legislation and current requirements of the Australian Taxation
Office, including the Goods and Services Tax (GST)
➢ Explain the key requirements for financial record keeping and auditing
➢ Describe the principles and techniques involved in managing:
o budgeting
o cash flows
o electronic spreadsheets
o GST
o ledgers and financial statements
o profit and loss statements.

Assessment Conditions

Assessment must be conducted in a safe environment where evidence gathered demonstrates

consistent performance of typical activities experienced in the financial management field of work and
include access to:

➢ Resources and documentation used in the workplace

➢ Workplace policies and procedures
➢ Workplace budgets and financial plans
➢ Business technology
➢ Case studies and, where available, real situations.

Assessors must satisfy NVR/AQTF assessor requirements.

Links

Companion volumes available from the IBSA website: http://www.ibsa.org.au/companion_volumes

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Housekeeping Items
Your trainer will inform you of the following:

➢ Where the toilets and fire exits are located, what the emergency procedures are and
where the breakout and refreshment areas are.

➢ Any rules, for example asking that all mobile phones are set to silent and of any
security issues they need to be aware of.

➢ What times the breaks will be held and what the smoking policy is.

➢ That this is an interactive course and you should ask questions.

➢ That to get the most out of this workshop, we must all work together, listen to each
other, explore new ideas, and make mistakes. After all, that’s how we learn.

➢ Ground rules for participation:

o Smile

o Support and encourage other participants

o When someone is contributing everyone else is quiet

o Be patient with others who may not be grasping the ideas

o Be on time

o Focus discussion on the topic

o Speak to the trainer if you have any concerns

Objectives
➢ Discover how to plan financial management approaches

➢ Know how to implement financial management approaches

➢ Learn how to monitor and control finances

➢ Understand how to review and evaluate financial management processes

➢ Gain the skills and knowledge required for this unit.

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1. Plan financial management approaches
1.1 Access budget/financial plans for the work team

1.2 Clarify budget/financial plans with relevant personnel within the organisation to ensure that
documented outcomes are achievable, accurate and comprehensible

1.3 Negotiate any changes required to be made to budget/financial plans with relevant
personnel within the organisation

1.4 Prepare contingency plans in the event that initial plans need to be varied

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Basic principles of accounting
When dealing with accounts, it is essential to know the basic principles – known as 'generally accepted
accounting principles'. They are as follows:

Revenue

Revenue is made when a sale is made. This is when legal ownership of the goods passes from the seller
to the buyer. It is not simply when you collect cash for something.

Expense

This is when a business uses goods or services i.e. the opposite of revenue. Expenses become active as
soon as you receive the goods or services, not when you actually pay for them.

Matching

This is when you match revenue to expenses – only counting expenses on the day that you get revenue
for them, not when you initially buy them. So if, you buy stock in bulk, only count expenses when you
sell individual items.

Cost

Costs of items will only be measured at their value for the time you initially bought them – you should
not adjust them in the accounting system to reflect current market values.

Objectivity

All data in the accounting system should be objective, factual and verifiable.

Continuity assumption

Accounts should assume that the business will continue to operate in the future; otherwise, none of the
assets have any definite value.

Unit-of-measure assumption

The domestic currency should be used by a business in its accounting system, regardless of inflation and
deflation effects on that currency's purchasing power.

Separate entity assumption

The business is a separate thing from its owner; a partnership is also a separate entity to the partners
who own the business. Therefore, the financial records of the business and those of the
owners/partnership are entirely separate.

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1.1 – Access budget/financial plans for the work team
1.2 – Clarify budget/financial plans with relevant personnel within the
organisation to ensure that documented outcomes are achievable, accurate and
comprehensible
1.3 – Negotiate any changes required to be made to budget/financial plans with
relevant personnel within the organisation

Budget/financial plans
Budget/ financial plans are an essential part of any business – without them, it is impossible to plan and
monitor income and expenditure.

They can include any of the following aspects:

➢ Cash flow projections

➢ Long-term budgets/plans

➢ Operational plans

➢ Short-term budgets/plans

➢ Spreadsheet-based financial projections

➢ Targets or key performance indicators for production, productivity, wastage, sales,

income and expenditure

The types of people that budget/financial plans must be clarified with include the following
personnel:

➢ Financial managers, accountants or financial controllers

➢ Supervisors, other frontline managers

Financial plans need to achieve the following:

➢ Analyse the past

o compare customer demand to company spending

o identify the sources of cash flow

o compare the financial performance against the performance indicators set at the
start of the financial year

o analyse audit results and accountant reports for ways to improve

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 ➢ Plan for the future

o Identify future cash flow sources and their potential impact

o Analyse organisational policies and their impact of organisational operations

o Look at spending trends and their potential impact

➢ Implement new strategies for the future

o Analyse organisational policies and create new ones

o Account for existing strategies when financial planning

o Examine existing staff and their skill levels – determine whether goals can be
achieved at their current level

o Assess all available options

o Get the opinions of stakeholders in decisions

➢ Set annual budgets

o arrange plans to set a budget

o budgets should be centred around financial plans

o involve budget managers in setting budgets

o ensure work meets budgeting organisational standards

o plan for contingencies

o set budgets for certain departments of the organisation

o provide a structure to budgets

o monitor work to ensure it complies with budgets

o take long and short-term arrangements into account

Long-term planning
Looking long-term is essential with financial planning and it should be integrated into the overall
strategy of the organisation. While short-term planning is also required, doing only this will result in a
lack of security and financial problems in the future.

The benefits of long-term financial plans are:

➢ You can estimate the funding required

➢ Budget allocations increase in accuracy

➢ Trends in demand can be identified

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 ➢ Change is easier to implement

➢ Financial consequence of major programs/changes can be planned

➢ Change can be implemented more easily

➢ You can forecast how the market is likely to change and account for this

➢ You can plan for human resources changes

➢ Staffing needs and resources can be calculated and planned

Medium-term planning
This is the go-between for short and long-term planning. For this stage, you
need to:

➢ Identify likely sources of cash flow

➢ Create a cash flow forecast statement, identifying the major changes of income sources

➢ Think what things may occur based on what you know will happen

➢ Identify future spending levels

➢ Consult with stakeholders for their opinions on what the major changes could be

➢ Analyse the impact of proposed changes of future finances

This approach will do the following:

➢ Helps management deal with cost cutting, budget cuts, resource allocation and
resource levels

➢ Allow changes to be more easily planned rather than being impulsive reactions

➢ Helps managers plan for the future – if they know their budget and budget forecasts,
they can assess whether change is viable

Option appraisal
The idea of this is to make decisions based on the advantages and disadvantages of the options
available. It is a useful tool for allocating limited resources; for example, if budget is limited, you can
decide the most effective part of the organisation for it to be invested in.

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Budgeting
When budgeting, there are various people who play a role in managing them.

Management

They are accountable for their own budgets. However, their accountability depends on their level in the
organisation. Within budgets, the following should be made clear:

➢ The difference between managers and financial support staff

➢ Who is responsible for setting and analysing each budget

➢ The delegation of roles (and their levels)

Budgets must be built upon current pricing levels, with price changes and
inflation allowed and accounted for. This involves:

➢ Anticipating the type and extent of possible price changes, allowing for if they become
a reality

➢ Contingency planning for price changes

➢ Consultation with staff and experts to determine accountability and allowances

When changes in accountability are possible, you must make sure:

➢ Everyone is aware of them and their impact

➢ Decisions are only made by the top-level people in the budgeting process

➢ Accountability is not with the original budget holders anymore

Budget holders

These people contribute to setting budgets and provide the information that is used to calculating exact
figures.

They are responsible for:

➢ Identifying trends and determining areas of change for budgets

➢ Dealing with budget reports

➢ Determining corrective actions for problems identified in budget reports (and

implementing them)

➢ Reporting any issues which cannot be resolved to senior managers

➢ Analysing data with support staff

➢ Providing expertise for support staff

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Finance and support staff

Their role is to:

➢ Set budgets in collaboration with budget holders

➢ Implement monitoring of:

o budgets

o reporting processes

o timeframes of processing changes

o reporting procedures

➢ Analyse financial data

➢ Examine data that impacts budget holders

➢ Provide advice to budget holders

➢ Be accountable for the quality of financial data they create

➢ Implement monitoring and reporting processes for financial decisions

➢ Be accountable for the quality and relevance of financial data used for budget
monitoring

Budget structure
The overall budget of an organisation, as previously discussed, should be divided into separate budget
for different departments etc. However, these should be grouped together so that related budgets are
under the responsibility of one person. It should also be clear who is responsible and accountable for
each budget, to avoid confusion.

Computer-based budget management

In the modern age, most systems in an organisation have become computerised – this includes budget
management.

A budget tracking system allows monitoring/recording of:

➢ Organisational spending

➢ Budgets

➢ Organisational income

➢ Debtor and creditor records

➢ Payment processing

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 ➢ Budget management

➢ Contract management

➢ Financial analysis

The system you use needs to do the following:

➢ Work in collaboration with the other information systems you use

➢ Allow comparison of accounts (automatically)

➢ Maintain and update budget management information

➢ Transfer information between budgets

➢ Enable easy billing

➢ Facilitate financial analysis

➢ Record actual income and outgoings

➢ Record expenditure commitments over time

➢ Make creditor payments easy

➢ Record costs individually

➢ Allow for easy forecasting

➢ Provide required reports

➢ Export data to spreadsheets

➢ Facilitate easy sharing of data

Closing accounts
This involves having a set point where all data into accounts is frozen and recorded, so it can be
analysed accurately over a set time period. It allows decisions and performance measurement to be
made from a set point.

Having this closure allows decisions to be made on:

➢ Whether under/over-spends can be carried forward

➢ How budget managers can examine results

➢ If any under-spend can be given back

➢ If over-spend needs to be given back (at a later date)

➢ Whether performance variances between actual and desired performance can be

assigned to future projects

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When dealing with variances:

➢ Have your approach set out in writing at the beginning of each cycle, to ensure
everyone is clear about expectations

➢ Ensure that the approach aligns with the overall financial strategies and approaches

➢ Keep the approach in line with responsibility levels

➢ People feel in control of dealings with variances

➢ Ensure that everyone is aware of the levels of variance that will instigate an
investigation

➢ Make sure that investigations are done by those external to the department they
concern

Managing joint budgets

These are also known as pooled budgets. Make sure that:

➢ Contribution levels of managers is clear

➢ The acceptable level of variance is set

➢ The methods of dealing with variances are clear to all staff

➢ People involved in a joint budget know the management strategy for it

➢ Reporting responsibilities are allocated

➢ Accountabilities are assigned

➢ Management responsibilities are outlined

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Activity 1

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1.4 – Prepare contingency plans in the event that initial plans need to be varied

Contingency plans
Contingency plans need to be present in budgets and budget forecasts, in the event that things do not
go to plan and the initial plan needs to be altered. There can be any number of unexpected variances,
such as your main supplier going bankrupt, power cuts, data corruption etc.

Examples of contingency plans include:

➢ Contracting out or outsourcing human resources and other functions or tasks

➢ Diversification of outcomes

➢ Finding cheaper or lower quality raw materials and consumables

➢ Increasing sales or production

➢ Recycling and re-using

➢ Rental, hire purchase or alternative means of procurement of required materials,

equipment and stock

➢ Restructuring of organisation to reduce labour costs

➢ Risk identification, assessment and management processes

➢ Seeking further funding

➢ Strategies for reducing costs, wastage, stock or consumables

➢ Succession planning

Every organisation will have contingency plans in place for various situations. If a workplace event
doesn’t go according to plan – or if another solution is required – than a contingency plan will be
required. There should be risk management plans and contingency plans in place for almost anything
that can go wrong.

A contingency plan does not mean that you expect things to go wrong but rather are planning ahead for
all eventualities, which is incredibly sensible in the business world. Contingency plans can help to save
time, money and a great deal of stress. A contingency plan may be put in place from day one or it may
be something that needs to be implemented following a situation that did not go according to plan first
time round.

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A contingency plan doesn’t necessarily have to focus on risk management or health and safety issues
(although both are very important); it can include finding alternative resources or gaining further
funding, for example. A contingency plan does not necessarily mean your current plan has not worked;
it just might need certain alterations.

Contingency plans should be part of the organisational policies and procedures and be seen as flexible
and adaptable as every situation will be different.

Contingency plans may need to cover situations such as:

➢ Broken/malfunctioning equipment

➢ Staff quitting or needing time off due to illness, holidays etc

➢ Health and safety issues

➢ Natural disasters (i.e. floods, earthquake etc)

➢ Theft, fraud or other security issues

Contingency plans should be flexible enough that last minute changes can be implemented. They should
provide an opportunity for action to take place so that an immediate solution can be found and utilised.

Contingency plans may need to include the following information:

➢ The situation needing action

➢ Personnel to be involved

➢ Contact numbers for personnel, resources etc.

➢ Legislative, organisational and ethical requirements to

consider

➢ How it will impact on the organisation

➢ Costs that may occur – including how to resolve the issue

➢ Solutions – these can be as many as necessary for different outcomes

➢ How the solution will be implemented and by who

➢ A deadline

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Activity 2

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2. Implement financial management approaches
2.1 Disseminate relevant details of the agreed budget/financial plans to team members

2.2 Provide support to ensure that team members can competently perform required roles
associated with the management of finances

2.3 Determine and access resources and systems to manage financial management processes
within the work team

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2.1 – Disseminate relevant details of the agreed budget/financial plans to team
members
It is important that all relevant personnel receive relevant details about the agreed budget/financial
plans.

Communication
It is vital that price changes and pricing policies are communicated to staff members to ensure they are
all on the same page and can work cohesively.

Most of this communication will be verbal; however written communication can be useful for the
purposes of:

➢ Ensuring everyone gets the same message

➢ Ensuring there is a record of communication

➢ People can refer to the contents of the communication

later (if need be)

Pricing policies and changes are likely to be communicated in stores on a vertical level – the manager
should hold a staff meeting to inform employees of this information.

When informing staff, you need to bear the following in mind:

➢ Be clear and concise – don't leave room for interpretation

➢ Check they understand – make sure your instructions have been understood and
provide clarification

➢ Consider cultural differences – use suitable languages and avoid slang

Who is informed?

After the budget/financial plans have been agreed, you will now need to divulge the relevant details to
team members.

People who may be informed include:

➢ Senior management – they will need to see the full details of the budget/financial
plans (as they are responsible for it).

➢ The accounts department – so that they can enter the figures into appropriate
software and create the necessary budget lines, etc.

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➢ Budget committee – where the (usually large) establishment has a budget committee,
they will be responsible for ongoing monitoring of income and revenue against
projections. Their role may also extend beyond this overseeing role, into proposals for
increasing revenue streams and limiting/reducing expenditures, as appropriate.

➢ Managers – middle level management (people such as heads

of department) commonly have daily control over the
revenue raising areas of the property and power over relevant
areas of expenditure. It is predominantly these individuals
who are responsible for generating the bulk of the income,
and whose decisions have immense impact on the profitability
and viability of the premises; while they operate under
direction from senior management, they make numerous day-
to-day and on-the-spot decisions that have the potential to
greatly impact on budget figures.

➢ Establishment staff – the head of department usually explains the latest budget
allocations to departmental staff. This news is traditionally passed on verbally in a
formal departmental meeting – as well as written information being distributed. The
head of department commonly sets the scene by explaining the general budgetary
context and the trading situation the establishment finds itself in – general statements
are normally used to describe the current situation as it compares to the last period.

Next, further general statements are made about what management expects from the
department (and by association, the staff); it is not common to pass on exact dollar
figures to the staff as this is seen as material that is 'commercial in confidence'.

Staff may be told that there is an expectation that, for example, they are expected to
increase revenue in the upcoming 12-month period by an average of 10% over the
previous year: this indicates management requirements without disclosing the actual
figures involved.

Staff may be informed, for example, that there is an expectation for expenses to be
reduced by five per cent.

It is always important to convey this sort of news within a positive context, wherever
possible, to reduce the possibility of staff disillusionment and the likelihood that staff
may misinterpret 'economic imperatives' as signals that their job is in jeopardy. When
staff pick up this sort of message they commonly start looking for employment
elsewhere because they can 'see the writing on the wall'.

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Traditional ways to inform about budget allocations
➢ Departmental meetings where information is delivered verbally and face-to-face (as
described above)

➢ All staff meetings where a series of overhead projections (or a PowerPoint

presentation) is used

➢ Internal memos or emails sent to staff

➢ Paper-based documentation that outlines, without being too specific, the requirements
that have been decided on. Certainly, where staff are informed and involved (wherever
that is possible), it creates a situation that will lead to greater work satisfaction, higher
levels of productivity and enhanced staff commitment to organisational goals.

Also, ensure that team members are made aware of relevant legislation, including:

Goods and services tax (GST)

This is a tax of ten per cent on most goods, services and other items sold or consumed in Australia. In
terms of pricing, this is usually factored into the price of sales to customers; this business then claims
credits for GST included in the price of business purchases. All businesses that reach the registration
threshold for GST will only register for this once.

Businesses must fill in an activity statement to report and pay the GST the business has brought in and
claim GST credits. Reporting and payments can be made either monthly, quarterly or annually – most
businesses choose to pay GST quarterly.

GSP can be calculated in one of two ways:

➢ Derived from accounts methods – using the GST amounts from business records. This
method is easier if you have recorded the GST amounts for sales and purchases
separately.

➢ Calculated sheet method – using a step-by-step worksheet

For both methods, you need to keep valid tax invoices of

transactions to support your claims.

If something happens that requires adjustment of a previous

activity statement (e.g. returned goods/cancellation of sale),
you will need to lodge a revised activity statement with the
Australian Taxation Office

Full details and a calculation worksheet for GST can be found at www.ato.gov.au.

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Activity 3

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2.2 – Provide support to ensure that team members can competently perform
required roles associated with the management of finances

Support for team members

Team members will need support in the workplace, to adequately perform their roles and to facilitate
improvement.

The types of support that can be offered include:

➢ Access to specialist advice – an advice service or someone on hand to answer any

specialist questions that team members will save time and ensure that roles are
performed in a uniform manner.

➢ Documentation of procedures – keeping

records of procedures is a useful tool in
retrospectively identifying problems or
issues. The documentation process also
makes you more aware of what you are
doing, so you are less likely to become
casual in your role/make errors.

➢ Help desk or identified experts within the organisation – having specific personnel to
use as a first port of call for any queries will save time and make the problem solving
process more efficient.

➢ Information briefings or sessions – having meetings where finance management is

explicitly discussed is a great way to clarify the roles of team members and provides an
opportunity for staff to raise any issues they might have.

➢ Intranet-based information – having an online resource for all employees to access at

anytime is extremely useful. It is a more efficient way of explaining processes and can
provide comprehensive guides to certain roles and situations.

➢ Training including mentoring, coaching and shadowing – having tailored

demonstration, monitoring and feedback on roles will ensure that each employee is
performing their role to the best of their abilities and in line with organisational
policies.

29
The required roles which team members may need support with include:

➢ Arranging for use of corporate credit cards

➢ Banking

➢ Debt collection

➢ Ensuring security, accuracy and currency of financial

operations

➢ Invoicing clients, customers and consumers

➢ Maintaining journals, ledgers and other record keeping systems

➢ Maintaining petty cash system

➢ Purchasing and procurement

➢ Wages and salaries payments and record keeping

30
Activity 4

31
2.3 – Determine and access resources and systems to manage financial
management processes within the work team
The resources and systems needed to manage financial management processes within the work team
may include:

➢ Hardware and software

➢ Human, physical or financial resources

➢ Record keeping systems (electronic and paper-based)

➢ Specialist advice or support

Hardware and software

The majority of businesses in the developed world now use some form of computerisation – with
financial management, this offers many advantages.

You will need to determine the type of hardware – such as computers and necessary accessories – that
will fulfil the minimum requirements of financial management software.

The types of software you will need for financial management will include:

➢ A universal ledger – covering your general ledger, accounts payable, accounts

receivable, fixed assets, project accounting and other financial reporting requirements

➢ End to end spend management program – to allow the control of purchasing activity
and to organise it in one document

➢ Budgeting, planning and forecasting program

➢ Reporting program – to analyse the efficiency of the business processes

➢ Process and control automation program – to allow all operations to be managed and
organised into an auditable format

Human, physical or financial resources

Human resources

This includes all of the skill-sets that the business already has within its personnel. They need to be
sufficient to meet the needs of business in achieving its strategy – if they aren't, can staff be trained
efficiently, or do new personnel need to be acquired?

32
Existing resources may include:

➢ Amount of staff in each role (take into account location, grade, experience,
qualifications, pay)

➢ Rate of staff loss

➢ Training standards for key roles

➢ Intangibles e.g. morale, business culture, work relationships

Changes to resources may be needed when strategies change. Consider:

➢ What the change of strategy is e.g. change of location, extra

locations, new products/product lines

➢ The human resources required for these changes

➢ Sources of fulfilling the human resource requirements

Physical resources

These include the following facilities:

➢ Production facilities – location, maintenance requirements, production processes,

efficiency of facilities for meeting business requirements

➢ Marketing facilities – distribution channels and marketing management process

➢ Information technology (IT) – what programs and equipment is used? How is it

integrated with customers and suppliers?

Financial resources

This refers to the ability of a business to fund its chosen strategies – it includes the existing funds, and
the ability to source new funds.

Existing funds include:

➢ Cash balances

➢ Loans

➢ Bank overdraft

➢ Shareholders' capital

➢ Capital invested in the business e.g. stocks, debtors

➢ Creditors e.g. suppliers, government

33
New funds may depend on:

➢ The reputation and strength of the business and its management team
➢ Relationships with existing investors/lenders
➢ The attractiveness of the market your business deals with (is it appealing to investors)
➢ Listing on a quoted Stock Exchange

Record keeping systems (electronic and paper-based)

Businesses will need accurate and efficient record keeping systems to allow them to collect revenue,
pay employees and suppliers, and pay taxes in a timely manner and using the correct processes.

Paper-based record keeping

Also known as manual record keeping, this involves keeping a paper-based journal of transactions for
each financial year.

It is divided into the following types of sections:

➢ Receipts
➢ Payments
➢ Wages and superannuation
➢ Bank reconciliation
➢ Inventory
This system requires a cash accounting approach, where you record revenue and expenses when
transactions actually occur – so, for example, when you receive the money as opposed to when you
send the invoice.

Electronic record keeping

These are an efficient way of maintaining financial records, providing a comprehensive way of managing
all accounts under one program and giving the option of using accrual accounting (recording revenue
and expenses when they are incurred) – this means a sale is recording when an invoice is created and
sent as opposed to when you receive the payment from the client.

Computer-based accounting programs can create the following:

➢ Orders
➢ Invoices
➢ Aged debtor reports
➢ Financial statements
➢ Employee pay records
➢ Inventory reports

34
Some programs have the ability to send (via direct email):

➢ Invoices to clients

➢ Orders to suppliers

➢ BAS returns to the Australian Taxation Office

Others can also produce financial forecasts and allow you to

monitor business performance.

Whichever system you use, you need to make sure it is compatible

with the systems of your book-keeper and accountant. Also, consider the costs of keeping the software
up-to-date and any training costs for staff to use it.

Specialist advice or support

This advice/support can be internal or external to the company – examples include:

➢ Accountants

➢ Book-keepers

➢ Finance seminars

➢ Mentors

The areas they advise on are those which require specialist and technical knowledge. Trying to manage
finances of a business without the proper information is a huge risk and can lead to many problems
down the line. While it may seem like a high initial cost for advice, in the long-term it should save you
far more than it costs you.

35
Activity 5

36
3. Monitor and control finances
3.1 Implement processes to monitor actual expenditure and to control costs across the work
team

3.2 Monitor expenditure and costs on an agreed cyclical basis to identify cost variations and
expenditure overruns

3.3 Implement, monitor and modify contingency plans as required to maintain financial
objectives

3.4 Report on budget and expenditure in accordance with organisational protocols

37
3.1 – Implement processes to monitor actual expenditure and to control costs
across the work team
The processes to monitor actual expenditure and to control costs across the work team include the
reporting of:

➢ Assets

➢ Consumables

➢ Equipment

➢ Expenditure

➢ Income

➢ Stock

➢ Wastage

Ledgers and financial statements

A general ledger is the main accounting record of a company – it contains a complete record of financial
transactions over the entire life of a company. It is used to prepare financial statements and includes
the following accounts:

➢ Assets

➢ Liabilities

➢ Owners' equity

➢ Revenues

➢ Expenses

Generally, businesses employ a double-entry book-keeping method – each financial transaction is

posted twice (as a credit and a debit). Therefore, the total of all debits is equal to the total of all credits.

38
Balance sheet ledger accounts

These record each asset, liability and equity component of the financial position statement.

For example a receivable ledger account may look something like this:

Receivable account

Debit $ Credit $

Balance b/d 1 250 Cash 3 250

Sales 2 750 Balance c/d 4 750

1000 1000

Income statement ledger accounts

These record incomes and expenditures of businesses; for example, the ledger may look something like
this:

Gas expense account

Debit $ Credit $

Cash 1 500 Income statement 2 500

500 500

39
Activity 6

40
3.2 – Monitor expenditure and costs on an agreed cyclical basis to identify cost
variations and expenditure overruns

Organisational record keeping and auditing

The Australian government will review your financial affairs each year in a tax or superannuation
review to check you:

➢ Have declared all the assessable income you receive

➢ Are entitled to the deductions and tax offsets you have

claimed on your tax return

➢ Have met all your regulatory obligations

With regards to employees the following are required by all businesses:

➢ Registering for pay as you go (PAYG) withholding when they take on staff for the first
time

➢ Registering for GST when their turnover exceeds the threshold

➢ Making superannuation payments for their employees

The types of audits that may be undertaken include:

➢ Reviewing compliance with registration, lodgement and payment obligations

➢ Specific-issue audits or reviews

➢ Comprehensive audits or reviews

➢ Transfer pricing reviews and audits for businesses with international operations

➢ Pre-lodgement compliance reviews for larger businesses

Record keeping requirements of Australian Taxation Office

You need to be aware of and comply with the record-keeping requirements of the Australian Taxation
Office.

When keeping a self-managed super fund (SMSF), you need to keep accurate tax and super funds – not
only is this a legal requirement, it will also help you manage your money efficiently.

You should keep records of all investment decisions, including:

➢ Why a particular investment was chosen

➢ Whether all trustees agreed with the decision

This allows for security of individuals, should other trustees take action against you if an investment fails
– if they have signed the minutes of the meeting when the decision was made, this is proof that they
agreed with you.

41
For the purposes of the SMSF auditor, the following records need to be kept for at least five years:

➢ Accurate and accessible accounting records that explain the transactions and financial
position of your SMSF

➢ An annual operating statement and an annual statement of your SMSF’s financial

position

➢ Copies of all SMSF annual returns lodged

➢ Copies of any other statements you are required to lodge with us or

provide to other super funds

Also, the following records need to be kept for a minimum of ten years:

➢ Minutes of trustee meetings and decisions

➢ Records of all changes of trustees

➢ Trustee declarations recognising the obligations and responsibilities for any trustee,
or director of a corporate trustee, appointed after 30 June 2007

➢ Members’ written consent to be appointed as trustees

➢ Copies of all reports given to members

➢ Documented decisions about storage of collectables and personal-use assets

Minimum tax-keeping records

Recording every sale

➢ The date it occurred

➢ The amount that was exchanged

Retain a detailed record for at least a month

➢ Keep a month's worth (minimum) of records of individual transactions – this helps

verify the summary records are accurate.

Retain a summary record

➢ Cash registers or point of sales systems:

o maintaining detailed daily records or tapes (these can be discarded after one
month)

o reconciliations to account for cash drawings and expenses paid in cash

o retaining reconciliation records for a statutory period of five years

o retaining rolls of tape for five years if reconciliations are not undertaken

42
 ➢ Receipt or invoice books (for business not using electronic record-keeping systems):

o conduct a reconciliation between your bank statement and receipt book at least
on a monthly basis

o businesses that conduct a daily reconciliation of sales

may discard individual sales records (receipts) after
one month

o If you do not perform a daily sales reconciliation, you

must keep individual sales records for five years

o bank records and receipt books must be retained for

five years

If it is not practicable to record every sale

Sometimes, cash registers cannot be used and it is impossible to record individual transactions – this
can be for businesses that deal with high volume/low value transactions and do not operate from a
permanent residence e.g. market stall holders.

In this case:

➢ Summary records must be made at regularly defined intervals – for example, at the end
of each day or shift

➢ Reconciliations must take into consideration any cash earned that a business uses for
other purposes and should show total cash at day end plus drawings and expenses less
the opening float amount

43
Activity 7

44
3.3 – Implement, monitor and modify contingency plans as required to maintain
financial objectives

Implementing, monitoring and modifying contingency plans

As outlined in 1.4, examples of contingency plans include:

➢ Contracting out or outsourcing human resources and other functions or tasks

➢ Diversification of outcomes
➢ Finding cheaper or lower quality raw materials and
consumables
➢ Increasing sales or production
➢ Recycling and re-using
➢ Rental, hire purchase or alternative means of
procurement of required materials, equipment and
stock
➢ Restructuring of organisation to reduce labour costs
➢ Risk identification, assessment and management processes
➢ Seeking further funding
➢ Strategies for reducing costs, wastage, stock or consumables
➢ Succession planning
Once you have developed the contingency plan, it needs to be implemented, monitored and modified
(where necessary). As a business changes, the plans will need to be reviewed and updated to make sure
that any new potential problems are accounted for.

To maintain a contingency plan, you must do the following:

➢ Communicate the details of it to everyone in the organisation

➢ Tell people their roles and responsibilities in the contingency plan
➢ Provide training (if necessary) for people to perform their roles
➢ Perform training drills periodically (to test the contingency plan)
➢ Use training drills to identify and implement any necessary changes
➢ Review the plan any time there are personnel, operational and technological changes
➢ Distribute amended plans throughout the company (discard the old plan)
➢ Make and store copies off-site that can be easily accessed if need be
➢ Perform audits on the plan from time to time. They should:
o reassess business risks
o compare actual performance levels to desired performance levels in the
contingency plan
o identify changes and implement them, if necessary

45
Activity 8

46
3.4 – Report on budget and expenditure in accordance with organisational
protocols
In line with the requirements of the Australian Taxation Office, you must report on budget and
expenditure.

Reporting may include data from:

➢ Bank statements

➢ Credit card statements

➢ Financial reports

➢ Invoices and receipts

➢ Ledgers and journals

➢ Logs

➢ Petty cash records

➢ Spreadsheet-based records

The need for reports

Operational reports can be seen as providing:

➢ A communication link between management and staff – in an organisation where, say,

the business operates every hour of every day, no-one can be there all the time; so,
these reports provide one way of making sure everyone gets vital information

➢ A historical database which builds into a useful management tool that can help future
predictions

➢ Data to managers which can inform and assess operational performance against
budgets

Report components
A typical report probably does not exist as their format and content varies widely, but reports will
contain certain basic elements:

➢ A statement of purpose – identifying the type of report and its intention so that
readers are quite clear about what this specific report is all about

➢ Subject topic – a note explaining the exact focus of the document

➢ The nature of the contributory evidence – explanation or verification of sources,

information and the period used as the basis for the report

➢ A conclusion – a plan of action formulated from the evidence provided in the report

47
 ➢ Identification as to who generated the report, together with its intended target
audience (by individual names or positions/titles)

➢ Authorisation – an indication as to who has authorised the report

➢ Date of the report – reports can be regular in nature (every month) or they can be ad
hoc to respond to a particular issue

The precise types of reports will vary from venue to venue (as will the names of the reports); also, how
venues calculate their version of them may differ (some may include certain aspects/figures that others
don't).

Photocopies of original source documents may accompany the report to validate the figures.
Accompanying explanatory notes may also be attached.

Sample reports include:

➢ Sales summaries – these can provide total figures (units

and/or dollars) for a given period as well as trends by
day/hour, together with brand/product/item trends.
Some reports may also provide a 'sales by staff member'
breakdown which reflects the selling records of each team member

➢ Daily, weekly or monthly transactions – outlining and providing an overview of the

statistics, progress and acceptability of the operation of the nominated department or
revenue centre; while profitability will be very important, turnover may also be a major
concern

➢ Department expenditures – this report will focus exclusively on expenditure and is

likely to highlight 'cost of goods sold' figures, 'wages' and 'overheads'

➢ Commission earnings – in some properties, especially those in high tourist areas or

those who belong to a chain, the income from earnings may be a critical key
performance indicator (KPI). This may not be so much as a revenue earner, but more as
an indicator of how well you are promoting other allied agencies/properties. This
report will highlight not only the revenue earned but also the commissions paid out,
and a breakdown of both commission income and expenditure (such as travel agents,
airlines, cars, other venue, etc.)

➢ Marketing activities – this report will detail promotions and publicity campaigns,
identifying the response in terms of dollars to these activities

➢ Accident reports – detailing accidents for the period under consideration and updating
the report recipients regarding post-accident events (possible legal action, out of court
settlements, action taken to address the cause, training proposed)

48
Sources of information
Typical sources of information used to develop financial reports are:

➢ Internal sales analysis figures from each department and/or revenue source – this will
include dockets, cash register audit tapes, daily takings sheets, debtor accounts

➢ Actual staff rosters for each revenue centre – these must be costed and, where a role
extends across a more than one revenue centre, there must be a breakdown of wage
allocation for each area/centre

➢ Internal stock movement sheets on a revenue centre basis – this will require costed
requisitions, purchases records, goods received books, interdepartmental transfer
sheets

➢ General and specific financial statistics and data – this embraces budgets in 'for the
period', and 'year-to-date' formats together with comparisons with performance, say,
last month, and 'same month last year'.

These reports should provide:

➢ A snapshot of the current position – a financial and

operational picture of the business showing where
you are and how you're doing

➢ A prompt for action – they should provide the basis

on which to make some planning/action decisions

➢ A reliable foundation for upcoming planning – by supplying data that shows trends

The reports should also be prepared to be:

➢ Easy to read and interpret – the information and statistics contained shouldn’t clutter
the main objectives

➢ Well-timed – they must be distributed as soon as possible after the data they contain is
captured

➢ Truthful and precise – they must be double checked to ensure that the information
they contain is accurate in all respects

➢ Sufficient data relevant to the issue(s) under consideration – the points made in
organisational statements should be covered by the reports so that there is a link from
planning through to actual operation. For example, if a statement was made that you
aimed to achieve 'X' per cent increase in sales in the 'Y' department by the end of the
year, then this – and other similar figures and percentages – must be covered in the
report

➢ Similar in layout and style to all other reports – so that where people are promoted or
transferred, they remain familiar with the format of the report.

49
Forward reports
Reports and recommendations may need to be forwarded to:

➢ Senior management

➢ Owners

➢ Personnel manager

➢ Sales manager

➢ Finance manager

➢ Heads of departments

➢ Supervisors

➢ General staff

50
Activity 9

51
4. Review and evaluate financial management processes
4.1 Collect and collate for analysis, data and information on the effectiveness of financial
management processes within the work team

4.2 Analyse data and information on the effectiveness of financial management processes within
the work team and identify, document and recommend any improvements to existing processes

4.3 Implement and monitor agreed improvements in line with financial objectives of the work
team and the organisation

52
4.1 – Collect and collate for analysis, data and information on the effectiveness
of financial management processes within the work team
Before you can analyse the effectiveness of financial management processes, you will first need to
collect data and information related to financial management processes.

Data and information on the effectiveness of financial management processes may include records
(paper-based and electronic) related to:

➢ Bank account records

➢ Cash flow data

➢ Contracts

➢ Credit card receipts

➢ Employee timesheets

➢ Files of paid purchase and service invoices

➢ Income and expenditure

➢ Insurance reports

➢ Invoices

➢ Job costings

➢ Petty cash receipts

➢ Quotations

➢ Taxation records

➢ Wages/salaries books

The information should be collected and filed on an ongoing basis to make it easily accessible for when
the time comes that you need to use it.

It should be ordered chronologically and by department – this will make searching for specific data
much easier.

Much of the figures for the above information can be found in the general ledger, but original copies of
all the documents should still be filed as evidence and for clarification purposes.

Cash flows
Cash flow describes the movement of money in or out of a business – it is measured over a specified
time period. It is calculated by adding non-cash charges (e.g. depreciation) to net income after taxes.
The cash flow of a company can indicate its financial strength and is essential for it to remain solvent
e.g. having enough available money to finance its operations.

53
If a company's statement of cash flow shows that the company is performing well, the available
remaining cash can be reinvested into the business to generate more profit.

Profit and loss statements

These financial statements summarise the revenues, costs and expenses of a company over a specific
time – this is usually a fiscal quarter or year.

They will provide information to show a company's ability to make profit via increasing revenue and
reducing costs. It does this by subtracting the costs of running the business from the revenue to show
net income (profit).

The cost of running a business includes:

➢ Stock expenses

➢ Operational expenses

➢ Tax expenses

➢ Interest expenses

Along with the balance sheet and income statement, it is the most important financial statement
produced by a business; together, they can be analysed to give a complete overview of a company's
finances.

Petty cash
This is a small amount of money which is kept on hand and used to pay for small amounts owed, as
opposed to writing cheques. It is usually assigned to a petty cash custodian – employees must than refer
to this person if they need to use petty cash or be reimbursed for a company expense they have paid for
out of their own pocket. When the petty cash fund gets low, the custodian can request the cashing of a
cheque to top it up.

The reason for petty cash is that is simpler than the writing, signing and cashing cheques for minor
transactions. For example, think about paying a delivery man costs due on delivery (these can be under
a dollar) – it is not worth recording this individual transaction individually – therefore, recording small
transactions collectively as petty cash makes the accounting process simpler.

The custodian must still keep a record of individual petty cash expenditure by issuing petty cash
vouchers for each transaction, complete with an invoice and receipt. These vouchers and the amount of
cash to hand must always equal the original fund. They should also keep a petty cash daybook to keep a
record of petty cash transactions over time. Because of the easiness with which petty cash can be
abused, it needs to be kept under close monitoring.

54
Activity 10

55
4.2 – Analyse data and information on the effectiveness of financial
management processes within the work team and identify, document and
recommend any improvements to existing processes
Now the information has been gathered and collated, it now needs to be analysed to determine the
effectiveness of your financial management processes.

This information can be used to create the following:

➢ Cost/benefit analysis (of individual processes)

➢ Profit statements

➢ Electronic spreadsheets

➢ Budgeting forecasts

➢ Ledgers and financial statements

➢ Profit and loss statements

➢ Ageing summaries

Identify, document and recommend improvements

From this, these documents must be analysed to see if productivity/profitability is going up or down.

The things that you want to see include:

➢ Earnings growth – over the previous year, quarter or month. You also want to strive for
growth to be above the market average.

➢ Earnings stability – you want steady, predictable growth as opposed to spikes of

revenue and periods of inactivity. This makes it easier to predict the financial position
of the company in the future.

➢ Return on equity – you want to turn a profit on the money invested

The findings of your analysis should be documented and reported to the appropriate personnel in your
organisation. The specific nature and methods of this, as well who you report your findings to, will
depend on your organisational policies and procedures.

56
The people you discuss the findings with may include:

➢ Colleagues

➢ Supervisors

➢ Managers

➢ Financial advisors

➢ Accountants

➢ Industry experts

➢ Departmental specialists

57
Activity 11

58
4.3 – Implement and monitor agreed improvements in line with financial
objectives of the work team and the organisation
The purpose of analysis is not only to see how the business is performing in relation to its targets, but to
identify areas for improvement.

These improvements will need to be made and monitored in line with the financial objectives and
organisational requirements of the work team and organisation.

Find out who is responsible in your organisation for implementing any agreed improvements. The
people you may need to talk to include:

➢ Management

➢ Budget holders

➢ Finance and support staff

Monitoring and reporting budgets

Budgets must be monitored and reported on, to ensure that they are meeting expectation and to
identify any problems that need rectifying.

Monitoring and reporting processes should cover the following:

➢ Set timetables and deadlines for monitoring and setting up of budgets

➢ Having a system to ensure data is up-to-date and accurate

➢ Reports should be made available for to management

➢ Reports should be done at least monthly

➢ Data should be inputted into your records regularly, to allow for better budgetary
planning

➢ Reports should be produced as soon as possible to ensure they are relevant

➢ Reporting should happen from the bottom up – it should include:

o actual expenditure

o forecasted expenditure

o expected changes

➢ Monitoring should happen from management downwards

➢ Monitoring processes should be reviewed regularly (to check they are working)

59
Forecasting expenditure trends
This is usually the responsibility of budget holders as they provide the information that is required for
forecasts themselves.

Forecasts should:

➢ Account for all expenses

➢ Assign expenses to the correct budget

➢ Ensure expenses are accounted for over the correct

time period

➢ Detail the correct length of time for financial commitments

➢ Account for delays

➢ Account for the level of activity required

Remember that budgets must be inherently flexible, as it's impossible to predict exactly what will
happen. Therefore, there needs to be in place a system for adjustment, should any changes occur.

60
Activity 12

61
Skills and Knowledge Activity

62
Nearly there...

Major Activity – An opportunity to revise the unit

At the end of your Learner Workbook, you will find an activity titled ‘Major Activity’. This is an
opportunity to revise the entire unit and allows your trainer to check your knowledge and
understanding of what you have covered. It should take between 1-2 hours to complete and your
trainer will let you know whether they wish for you to complete it in your own time or during session.
Once this is completed, you will have finished this unit and be ready to move onto the next, well done!

63
Congratulations!

You have now finished the unit ‘Manage budgets and financial plans'

64