Assessment Materials

BSBFIM501 Manage Budgets and Financial Plans

To achieve competency in this unit you must complete the following

assessment items. All tasks must be submitted together. Tick the boxes
to show that each task is attached.

 Assessment 1. Theory Exam ☐

 Assessment 2. Prepare financial documents & financial report ☐

NOTE: If this is a group assignment, each member of your group must

individually submit a separate and complete copy.

Student ID Student Name

Do not have Albert paris

The other members of my group are:

1. Name:Click here to enter text. Student ID#: Click here to
enter text.
2. Name:Click here to enter text. Student ID#: Click here to
enter text.
3. Name:Click here to enter text. Student ID#: Click here to
enter text.

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 PLEASE NOTE: SECTIONS HIGHLIGHTED IN THIS COLOUR ARE FOR TRAINER USE

ASSESSMENT 1 MARKING SHEET

Satisfactory
Did the candidate:
Yes No
1. Task 1: Successfully answer all the theory based questions
regarding managing budgets and financial plans? ☐ ☐
Including: 1.1, 1.2 1.4, 2.2, 2.3, 3.1, 3.4, 4.1, RS, RK

ASSESSMENT 2 MARKING SHEET

Satisfactory
Did the candidate:
Yes No
1. Task 2: Part 1. Successfully compile the suit of excel spreadsheets
1-3. ☐ ☐
Including: 1.1, 1.3, 1.4, 3.1, 3.2, 3.3, 4.1, 4.2, 4.3,
1. Task 2: Part 2. Successfully deliver a financial report by analyzing,
monitoring and reporting on financial outcomes? ☐ ☐
Including: 1.1, 1.2, 1.3, 1.4, 2.1, 2.3, 3.1, 3.2, 3.3, 3.4, 4.1, 4.2, 4.3

ASSESSMENT - SUMMARY

Assessor’s checklist – tick when finalized

Task 1☐ Task 2☐

ASSESSOR’S GENERAL COMMENTS

(see individual tasks & marking guides for more detail)

Assessor Name

RESULT COMPETENT ☐ NOT YET COMPETENT ☐

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Assessment 1 Theory exam

Assessment Instructions

First of all, imagine that you are the Finance Manager at ABBA Marketing Company. Your employer
has asked you to prepare the Budgets and Financial plans for 2017.

In preparation for this job, answer the questions below. Click in the space provided and type your
answer.

 Questions 1-9 confirms your command of terminology.

You may like to refer to the National Register document at www.training.gov.au.
 Questions 10-14 demonstrates your knowledge of record keeping requirements for the ATO
and for auditing purposes.
 Question 15-19 are about analysing, implementing, disseminating and communicating
financial information as well as core accounting principles.

Access the ATO Australian Taxation Office website at www.ato.gov.au and research the
‘Record keeping for small business’ section; and report as much information as you can find.

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(Questions 1-9)

1. List relevant personnel within ABBA who you will assemble to discuss the budgets and
financial plans to ensure that the documented outcomes are achievable, accurate and
comprehensible.

First of all I meet with the CEO because he is the most important person in the company and they
have to approve and understand the budget proposal better and then I would meet with the
operations manager and the other department managers so that could understand the established
budgets

2. List the five source documents that you can access for information to include in your
Budgets and Financial plans.

-Hardware and software

- Human, physical and financial resources
- record-keepying systems
- data security and back up
- specialist advice

3. Give examples of (2) two business operational risk scenarios that could affect your initial
budgets and financial plans. What contingency planning strategies will you need to put in
place if your initial financial plans need to be varied?

- Due to a storm one of our factories is burned and we lose all the machinery due to the fire. As a
contingency plan what we could do is increase the budget for the reform of this factory and improve
the insurance against natural disasters in that factory for the future.
- A new law increases the cost of our raw material most used in our products. The
contingency plan would be to look for a new raw material that will fit our products to
maintain the cost of the raw material and the quality of the product.

4. Name (5) five main required roles associated with the management of finances – on a daily,
weekly and monthly basis. Include a short description of each job role.

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 1. Financial manager: is in chrge of the financial systems and processes put in place at a
business., and responsible of providing support on these areas to his or her co-workers and
peers.
2. Accountants: the person who keeps track of the organisation’s money. The accountant will
use this information to generate financial reports to show how the organization is
performacing financially at a specific point in time.
3. Financial controller: Is the person who say where the money will go in the business, as well as
being involved in all monetary aspects of the business.
4. Production manager: . It is a varied role. It can involve working on processes to increase
production and reduce costs, as well as esuring that the daily production processes are
adhered to, and timelines are met.
5. Supervisors: A person who is in control of a department in organization. They will have a
budget allocated to them, and their primary role is to keep their department moving along
smoothly and that the daily requirements of their department are met.

5. What are (5) five ways in which you could provide support to your finance team members
to ensure that they can competently perform their job roles?

Planning
Organizing
Staffing
Leading
monitoring

6. List and describe (3) three of the main resources and/or systems that finance personnel may
need to successfully manage financial management processes.

1- Hardware and software: Using and having knowledge about how to use computer accounting
systems allow you instant acces to information regarding your team’s performance with regard to
cost cutting or wastgate.
2- Human, physical and financial resources: You will need to determinate in each organisation who
will be responsible for gathering, storing and providing access to source data and for otherwise
assisting you to manage budgets and financial plans. As a manager, you may be responsible for
hiring team members or accessing temporary staff from consultancies. It is important to carefully
assess the skills of existing team members to identify any skills gaps to be filled by outside human
resources.
3- Record keeping systems: We use this in accordance with organisational procedures and ATO.
Common recording and storage methods for data include making entries ino pre-printed books.

7. As the Finance Manager, what processes would you implement to monitor actual
expenditure and to control costs?

Three fundamental control processes employed by most organisations are:

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 - paperwork – paperwork with complete details must be provided as evidence of any
receipt or payment of cash
- secondary control – receipt of cash will have a secondary monitoring system like a
cash register or a second person
- proper authority – all payments must be authorised by the person responsible for
the department or cost centre.

8. Name (6) six source documents you would need to access in order to report on actual
expenditure and to control costs.

bank statements
credit card statements
financial reports
invoices and receipts
ledgers and journals
logs

9. As the Finance Manager you will regularly collect and collate for analysis, data and
information on the effectiveness of financial management processes within the work team.
List (8) eight documents where you could source such data and information.

- Bank account records

- Receipts
- Tax invoices
- Depreciation
- GST calculations and any credits
- Job costing
- Consumable records
- Sales information

10. Explain what GST is and how it works in Australia.

The GST is a 10% tax on most goods and services sold or consumed in Australia. Companies
registered in the GST must charge GST on most of the goods and services they sell or supply, and
pass it on to the government.
Generally, businesses and other organizations registered for GST will:
• include GST in the price they charge for their goods and services
• claim credits for the GST included in the price of goods and services they buy for their business

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 11. Explain which Australian businesses have to register for GST and why this is so.

You must register for GST if:

• your business or enterprise has a GST turnover (gross income minus GST) of $ 75,000 or more

• your non-profit organization has a GST turnover of $ 150,000 per year or more

• you provide taxi or limousine travel for passengers in exchange for a part of your business,
regardless of your GST turnover - this applies to both owner drivers and if you lease or rent a taxi

• you want to claim fuel tax credits for your business or enterprise.

12. Identify and record all the business records you must keep for taxation purposes?

- Income and sales

- Expense o purchase record
- Year end record
- Bank records
- GST records
- Fuel tax records
- Employee and contractor record

13. List three of the legal requirements or conditions that the ATO directs, for keeping good
business records?

 explain all transactions

 be in writing (electronic or on paper)

 be in English or in a form that can be easily converted

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 14. Research and explain your findings as to what the ATO describes as being the three (3)
requirements for keeping your tax records electronically.
https://www.ato.gov.au/business/manage-your-invoices,-payments-and-records/getting-
started/choosing-a-record-keeping-system/electronic-record-keeping/

- records must not be manipulated or altered

- if you change your system, you still need to be able to access the original data
- You do not need to keep paper records, unless a particular law or regulation requires a paper
copy.

15. With which relevant personal in the organization would you negotiate any changes
required to be made to budget/financial plans?

In my opinion It depends in your position in the company. If you are a simple worker in your
department you can discuss the budget with your manager, If you are a manager of a department
you can discuss with the financial manager, and If you are the financial manager you have to discuss
with the CEO of the oganisation.

16. How would you disseminate relevant details of the agreed budget/financial plans to team
members?

I wil do a meeting with them and after I will send them a email to explain the information specifically.

17. How can you analyse data and information to measure the effectiveness of financial
management?
Using KPI to show the actual position of the business

18. How can you implement and monitor improvements with financial objectives?
Interim action – This is action that aims to buy time until the real cause of the
problem can be identified and fixed. Often called a band-aid approach, it is a
valuable management response when used correctly.
- Adaptive action – Sometimes performance targets are set unrealistically high.
There may be a number of valid reasons; errors, over-enthusiasm, changes in
macro-economic circumstances and so on. At some point it becomes clear that a
performance deficit such as a budget shortfall is inevitable. Adaptive action
involves reviewing the performance standards and budgetary projections and
bringing them in line with the new reality. Care should be taken, however, that this
response is not used to ‘cover-up’ poor performance.
- Corrective action – This targets the cause of the substandard performance. It is
designed to get the performance back on the rails.

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 - Preventative action – This action removes the cause of potential performance
shortfalls before they occur. Effective monitoring provides the early warning system
that enables appropriate preventative action to be taken.
- Contingency action – This is action you take ‘just in case’, or ‘plan b’. The
organisational monitoring system may hint that there is a problem looming that is
deemed to be serious enough to warrant contingency action. You may use the risk
management process discussed in Section 2 to evaluate the risk. In many cases

the contingency action would be

19. List any three of the basic accounting principles

- the application of the accounting cycle

- the use of journals and ledgers
- the practice of making year-end closing entries for the preparation of financial
statements.

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Assessment 2
Prepare financial documents including financial report
Assessment Instructions
This section has 2 Tasks. You are required to complete both tasks.

Task 1 has Three (3) activities; and requires you to prepare Microsoft excel spreadsheets based on
the given scenarios and to monitor and review the budgets and P&L statements. You are
encouraged to display your answers by clearly calculating a simple formula within each cell. You are
required to upload your live excel workbook to Moodle as part of your evidence.

Task 2 requires you to write a financial report to identify options for improved budget performance
and contingency planning.

CASE STUDY:
CASE STUDY SCENARIO – Simpsons Pty Ltd

Simpsons Pty Ltd is a small take away restaurant located in Sydney CBD. The restaurant is owned
by Mr & Mrs John Spice. The restaurant started its activities in January 2015.
In December 2015 the following information was collected:

SALES AND COGS ACTIVITIES FOR 2015

The restaurant sold 54,600 take away meals, and the price per meal was $10.50. The food cost
per meal sold was $4.60. Also 20,000 units of soft drinks were sold during the year. Soft drinks
are sold for $2.50 and the cost price was $0.80.

BUDGET FORECASTING FOR 2016

The owners estimated that for the next year the price per take away meal could be increased to
$13.00. They have also predicted that sales (in units) would increase by 10% in 2016. The owners
have entered into a monthly Contract with the soft drinks supplier. According to the Contract the
restaurant must purchase a minimum of 2,000 units of soft drinks per month and the cost price
will be reduced to $0.50 per unit. The restaurant owners decided to reduce the selling price of
soft drinks to $1.50 in order to increase sales (in units) by 50% and are expecting to meet the
required selling demand.

The owners have anticipated the following expenses for 2016:

ANTICIPATED YEARLY EXPENSES FOR 2016
COGS (food + beverage) $ $ 291,276 Food ($276,267) beverage ($15,000.00)
Rent $ 40,000
Utilities $ 10,000
Wages $ 130,000
Miscellaneous $ 6,000

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Task 1
NOTE: SPREADSHEETS MUST BE PREPARED USING MICROSOFT EXCEL

ACTIVITY 1.
Based on the above Sales and COGS activities for 2015;
Prepare a spreadsheet that shows in 12 monthly columns the average monthly Sales for food and
drinks and the average monthly COGS for meals and drinks; in addition include end columns for the
annual totals and another with the average quarterly totals.
Using the prepared template from Activity 1; continue with the following:

ACTIVITY 2.
Based on the above Budget forecasting for 2016;
Prepare a 2nd spreadsheet similar to above (ie 12 monthly columns) for the yearly Profit and Loss
Budget; also include end columns for the annual totals and the average quarterly totals.

ACTIVITY 3.
Based on the following assumptions prepare a 3rd spreadsheet with the trading activities for the
1st quarter of 2016. Use monthly columns for January, February and March for the actual 1st qtr
results. Also use a column for the quarterly budget for 2016 and another with the totals for the
three months as a quarterly actual column.

ASSUME THAT DURING THE 1ST QUARTER OF 2016:

• Food revenue was 20% higher than the budget forecasted
• Food Cost was 30% higher than the budget forecasted
• Beverage sales was 15,000 units
• Utilities Expense was $8,000
• Wages expense $25,000
• Rent expense was $10,000

You are also required to monitor the trading activities for Simpsons Pty Ltd for the first quarter of
2016 and identify and record in an additional column all dollar (AUD$) variances and as a
percentage % figure from the forecasted budget.

Task 2
NOTE: INSERT TASK 2 BELOW THE LINE AT THE END OF THIS DOCUMENT

Activity 1
Write a Financial Report (in the appropriate format) to the restaurant owners; include the following:
In Activity 3 you have identified variance between the budget and actual results for the first quarter
of 2016. Explain different contingency planning strategies and adjustments that you can make to
your budgets for the rest of 2016. Be sure to address any possible causes for the variance. Ensure
you include each of the following main areas in your report:
o Meals
o Drinks
o COGS
o Rent
o Utilities

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 o Wages
o Miscellaneous
Activity 2
You must include your recommendations and a conclusion in this section of the report you need to
discuss:
 How you will implement and monitor your changes to the business to control costs
 How you plan on making new contingency plans for further budget variances
 How you can collect and use information from work teams to use with your budgets
 Comment on how effective the financial information is that you collected.
 Explain how you will negotiate and communicate budget information with team members.
 Explain how you can support staff to make budget changes

PLEASE PASTE ASSESSMENT 2 Task 2 BELOW THIS LINE

Mr John Spice
After analyzing the budgets of the company and making a study of the general situation that the
company is in, I can say that your company now has positive numbers, even so they have two
aspects that we are going to focus on, since they are the most negative currently. All the data is
given in the tables that are attached to the document.
Meal
The element that produces more losses to your business are the meals, that is, it is economically
surpassing the amount you had set to spend in this sector. In this way what we will have to do and
what we propose would be two contingency plans to reduce this expense and get closer to the
established budget. To achieve that we propose these two variants:
- Make a market study to see which companies offer their raw material at a more affordable price
and thus buy the same material at a better price.
- Talk to the company that provides the raw material to reduce the price.
In this way choosing one of the two options you could considerably reduce that current deficiency
and thus increase the benefits.
Utilities
The second and last current deficiency in your establishment would be utilities. The consumption of
electricity, water and electricity is surpassing what is established and is providing considerable
economic losses. For this we propose the following options:
- Do an analysis to identify which parts of the company consume more energy.
- Use new energy to reduce the cost of cosnumo (example led lights)
- Renegotiate rates with the relevant companies.
It must be added that both salaries, wages and rent are stable and do not require a contingency
plan.
recommendations

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From my point of view I would like to add that the most benefits for your company is that you send
this mail to the others responsible or people with certain authority or positions in the company and
at the same time they meet to be able to express the current situation and to treat the deficiencies
or losses jointly. I would also tell him to perform financial control in a period of 6 months and so on
a continuous basis to be able to check the current situation.
I also recommend that you establish an information system so that both you and your staff can
control the current and established budget to make decisions related to the financing of your
company.
Finally, I would like to remind you that we are at your disposal for any questions you and your
employees have and that we will be happy to help you.

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