Finance

BSBFIM501 Manage budgets and financial plans

This unit is about managing finances within a team in an organization. It includes planning and implementing financial management approaches, supporting team members involved in aspects of financial operations, monitoring and controlling finances, and reviewing and evaluating the effectiveness of financial management processes. It applies to managers who are responsible for ensuring that financial resources are used effectively and are managed in line with financial objectives of the team and organization.

 

How you will be assessed

You will be assessed through:

• Assessor observation on the job
• Supervisor reference (if the assessor is not the supervisor)
• Review of your workplace documents (e.g. procedures)
• Interview/assignment based on the requirements below.

---

 

Practical

The practical will be assessed in a real situation on the job. It must be a safe environment with access to:

1. resources and documentation used in the workplace
2. workplace policies and procedures
3. workplace budgets and financial plans
4. business technology

You need to show that you have done the following:

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

---

 

Interview/assignment questions

1. What's the difference between:
1. what a manager does in financial management,
2. what a bookkeeper does in bookkeeping and
3. what an accountant does in accounting?
2. Basic accounting principles and terminology
1. What are assets?
2. What are liabilities?
3. What is equity?
4. What is the difference between gross profit and net profit?
5. What is the difference between fixed and variable costs?
6. What is the difference between liquid and illiquid assets?
7. What does a Profit and Loss statement tell you?
8. What does a Balance Sheet tell you?
9. What does cash flow tell you?
10. Are there any benchmarks for average profitability in your industry? If so, what are they?
3. Identify and explain the legislation and current requirements of the Australian Taxation Office relevant to your organization. Include the goods and services tax (GST). (Others can include company income tax, FBT, PAYG tax for employees, BAS statements, documents needed for deductions and costs, exemptions)
4. Explain the key requirements for financial record keeping and auditing:
1. Source documents
2. Ledgers
3. Final reports
5. Describe how you managed:
1. Budgets
2. Cash flow
3. Electronic spreadsheets
4. GST
5. Ledgers and financial statements
6. Profit and loss statements.

Note: Your assessor may also ask you a variety of what if questions.

---

 

Detailed requirements

Note: Some of the Criticial Success Factors are your abilities to set a realistic budget to start with, and to control expenditure to stay within budget.

1. Plan your financial management approach

1. Access the team’s budget or financial plan
2. Clarify budget/financial plans with relevant personnel in the organization to ensure that documented outcomes are achievable, accurate and comprehensible
3. If it needs changing, negotiate any changes with relevant personnel in the organization and get their agreement
4. Prepare contingency plans in case initial plans need to be varied

 

2. Implement your approach

1. Inform team members of relevant details of the budget/financial plans
2. Make sure that that team members can competently perform their roles in financial management
3. Find out what financial management resources and systems the team needs, and get hold of themmanagement processes within the work team.

 

3. Monitor and control finances

1. Monitor actual expenditure and control costs across the team. Follow an agreed cyclical basis to identify cost variations and expenditure overruns. (Some cycles are based on projects and some are "year to date".)
2. Implement, monitor and modify contingency plans as required to keep on track to meet your financial objectives
3. Report on budget and expenditure according to your organization’s protocols

 

4. Review and evaluate financial management processes

1. Collect data and information on the effectiveness of financial management processes within the work team.
2. Collate and analyze your data to identify any improvements to existing processes.
3. Document your recommended improvements. They should suit the financial objectives of the team and of the organisation.
4. Get agreement to improvements.
5. Put the improvements in place, and monitor them.

 

---