Assignment Answers to BSBFIM501 Manage Budgets and Financial Plans

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Your assessment is designed to assess your performance of competency for the unit BSBFIM501 Manage budgets and financial plans, Release 1. Your assessor will help you fully understand assessment requirements for this unit.

The features of this assessment are detailed in the following table.

TASK 1 – Please complete the following quizzes on Moodle:

§  Topic 1 Online Quiz

§  Topic 2 Online Quiz

§  Topic 3 Online Quiz

TASK 2: Questioning

Please provide responses to the following:

1. Provide a brief definition for each of the following financial terms:

Accrual Accounting
Ageing
Ageing Summaries
ATO
Auditing
Balance Sheet
Budget
Cash Accounting
Cash Flow
ILSC Business College:
Page 4 of 19
Costs
Cost Variations
Contingency Plans
Expense
Expenditure
Expenditure Overruns
Financial Management
Financial Statements
Financial Plans
Financial Objectives
Financial Reports
GAAP
GST
Matching
Petty Cash
Profit & Loss
Statements
Resources
Revenue

2.  When discussing budgets and financial plans, it is important to ensure that the documented outcomes are achievable, accurate and comprehensible. List five (5) relevant personnel, within an organisation, that would need to be consulted.

3.  List and explain five (5) of the basic accounting principles:

4.  Provide two (2) examples of business operational risk scenarios that could affect your budgets and financial plans.

5.  If your initial financial plans need to be varied, what contingency planning strategies could you put in place?

6.  Match each of the following financial management roles with their respective job descriptions.

Financial Management Roles:

1.       Maintaining journals, ledgers and other record keeping systems

2.       Ensuring security, accuracy and currency of financial operations

3.       Debt collection

4.       Banking

5.       Invoicing clients, customers and consumers

6.       Arranging for use of corporate credit cards

7.       Maintaining petty cash systems

8.       Wages, salary payments and record keeping

9.       Purchasing and procurement

Financial management roles:

Job descriptions:

a. Person who organises contract entitlements, approval from management, daily limits timing and methods for reconciliation, producing receipts for card use and procedures for lost cards.

b. Person responsible for petty cash, the petty cash limit, the process for replacing petty cash, record keeping, access to petty cash and security of petty cash and storage.

c. Person who is responsible for etiquette for recovering accounts and training in dealing with conflict and company procedures

d. Person who is responsible for the banking and safety and reconciliation procedures for banking and security.

e. Person responsible for software, MYOB or invoicing programs, managing accounts, professional communication and relationship management, data entry accuracy, program and computer use and the appropriate authority to invoice.

f. Person responsible for using recognised accounting standards, follows company procedures for bookkeeping, reporting responsibilities, access to data, dissemination processes, reporting hierarchy, ATO and l egal responsibilities and they have the appropriate training.

g. Person responsible for ensuring standards, audit procedures, audit requirements by law, communication between departments, researching the latest financial techniques and ongoing staff training.

h.  Person responsible for pre-existing service agreements with suppliers, delivery procedures, software to track purchases, training required, ordering aligned with company supply needs, budgets for ordering and following established procedures.

i.  Person responsible for using timesheets, electronic recording of information, HR and payroll requirements regarding format, timing, entitlements and paper work standards, using external sources for payroll management, using spreadsheets and tables for record keeping, communicating channels and establishing awards, contracts and pay rates.

7.  Outline at least three (3) ways support could be provided to a finance team to ensure that they perform their roles competently.

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

9.  As a finance manager, what processes would you implement to monitor actual expenditure and to control costs?

10.  Categorise each of the following types of source documents according to whether you would access them to ‘report on actual expenditure’ and to ‘control costs’ or for ‘information to include in your budgets and financial plans’ by placing a tick to indicate the correct category.

11.  As a finance manager, you would be expected to regularly collect and collate data and information on the effectiveness of financial management processes within the work team. List at least five (5) documents where you could source such data and information.

12. Outline the concept of GST and explain how the system operates in Australia.

13. Which Australian businesses should be registered for GST?

14. List at least three (3) business records that must be kept for payments made to employees.

15. List at least five (5) business records you must keep for income tax and GST purposes.

16.  List at least three (3) business records you must keep for PAYG withholding for your business payments.

17. List all the business records you must keep for PAYG withholding for fuel tax credits.

18.  Outline at least four (4) of the ATO’s legal requirements or conditions for keeping business records.

19.  Using the link below, research the ATO requirements for keeping tax records electronically then describe and explain three (3) of these requirements.

https://www.ato.gov.au/business/managing-your-small-business-records/electronic-and-manual-record-keeping-systems/electronic-record-keeping/

20.  List which relevant personnel in the organisation would be consulted when implementing changes to the budget/financial plans?

21.  Outline the communication tools you would use to disseminate relevant details of agreed budget/financial plans to team members.

22.  Describe the factors that can be used to analyse data and information in order to measure the effectiveness of financial management.

23. How can improvements with financial objectives be implemented and monitored?

TASK 3 - Case Studies: Prepare financial statements and reports for Simpsons Pty Ltd

TASK 1: Preparing spreadsheets to monitor and review Budgets and Profit & Loss Statements

PLEASE 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 (i.e. 12 monthly columns) for the yearly Profit and Loss Budget. Don’t forget to 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 actual average monthly trading activities for the 1st quarter 2016.

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: Develop a Financial Report

PLEASE NOTE: Up load your report on Moodle with this assessment

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:

• Meals
• Drinks
• COGS
• Rent
• Utilities
• Wages
• 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

Report Writing Guidelines

Assessment Task 2:

The report should have an introduction like the below example:

Please find below the performance report of your business for the year 2016. This report is mainly for the purpose of providing a financial analysis of your business’ progress during the first quarter of 2016 and towards the end of the year. Additionally, this report will provide budget projections and propose viable solutions for the rest of the year based on the outcome of expenses in 2016.

Moving forward, you will be receiving quarterly reports of this kind which will identify the costs of operating your company, your budget and variations between your actual performance and budgeted performance. The highlighted variances will make it easier for you to quickly identify aspects of your operations that require immediate attention, as indicated in the recommendations below.

You must note from the report that your budget from actual income is significantly higher due to increased costs in meals and drinks. Remedial actions are stipulated in the recommendations section of this report so you can find ways to meet targets by end of the year.

Main Points of Interest that you should include within the report:

• Financial analysis of income
• Meals
• Drinks
• Financial analysis of expenses
• COGS
• Rent
• Utilities
• Wages
• Miscellaneous

Recommendations for Report Assessment 2 Task 2:

This section refers to the possible contingency plans required based on the variances between budget and actual results for the first quarter of 2016.