Importance of Financial Management Systems in Business Operations

T-1.8.1
Details of Assessment
Term and Year 2, 2019 Time allowed 7 Weeks
Assessment No 1 Assessment Weighting 100%
Assessment Type Portfolio of
Due Date Week 7 Room TBA
Details of Subject
Qualification BSB61215 Advanced Diploma of Program Management
Subject Name Financial Management
Details of Unit(s) of competency
Unit Code (s) and
Names
BSBFIM601 Manage finances
Details of Student
Student Name
College Student ID
Student Declaration: I declare that the work
submitted is my own, and has not been
copied or plagiarised from any person or
source.
Signature: ___________________________
Date: _______/________/_______________
Details of Assessor
Assessor’s Name
Assessment Outcome
Results Competent Not Yet Competent Marks / 100
FEEDBACK TO STUDENT
Progressive feedback to students, identifying gaps in competency and comments on positive improvements:
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I am also aware of my right to appeal and the
reassessment procedure.
Signature: ____________________________
Date: ____/_____/_____
Assessor Declaration: I declare that I have
conducted a fair, valid, reliable and flexible
assessment with this student, and I have provided
appropriate feedback
Student did not attend the feedback session.
Feedback provided on assessment.
Signature: ____________________________
Date: ____/_____/_____
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T-1.8.1
Purpose of the Assessment
The purpose of this assessment is to assess the student in the following
learning outcomes:
Competent
(C)
Not Yet
Competent
(NYC)
1.1 Review and analyse previous financial data to establish areas which have
generated a profit or loss
1.2 Undertake research to review reasons for previous profit and loss
1.3 Review business plan to establish critical dates and initiatives that will
require or generate resources in the next financial cycle
1.4 Analyse cash flow trends
1.5 Review statutory requirements for compliance and liabilities for tax
1.6 Review existing software and its suitability for financial management
2.1 Use previous financial data to determine allocations for resources
2.2 Make informed estimates of new items for inclusion in budget
2.3 Prepare budgets in accordance with organisational requirements and
statutory requirements
3.1 Circulate budgets and ensure managers and supervisors are clear about
budgets, reporting requirements and financial delegations
3.2 Manage risks by checking there are no opportunities for misappropriation of
funds and that systems are in place to properly record all financial transactions
3.3 Review profit and loss statements, cash flows and ageing summaries
3.4 Revise budgets, as required, to deal with contingencies
3.5 Maintain audit trails to ensure accurate tracking and to identify discrepancies
between agreed and actual allocations
3.6 Ensure compliance with due diligence
4.1 Ensure structure and format of reports are clear and conform to
organisational and statutory requirements
4.2 Identify and prioritise significant issues in statements, including comparative
financial performances for review and decision making
4.3 Prepare recommendations to ensure financial viability of the organisation
4.4 Evaluate the effectiveness of financial management processes
Assessment/evidence gathering conditions
Each assessment component is recorded as either Competent (C) or Not Yet Competent (NYC). A student
can only achieve competence when all assessment components listed under “Purpose of the assessment”
section are recorded as competent. Your trainer will give you feedback after the completion of each
assessment. A student who is assessed as NYC (Not Yet Competent) is eligible for re-assessment.
Resources required for this Assessment
 Computer with relevant software applications, access to internet and weekly eLearning notes
Instructions for Students
Please read the following instructions carefully
 This assessment has to be completed In class At home
 The assessment is to be completed according to the instructions given by your assessor.
 Feedback on each task will be provided to enable you to determine how your work could be improved.
You will be provided with feedback on your work within two weeks of the assessment due date. All other
feedback will be provided by the end of the term.
 Should you not answer the questions correctly, you will be given feedback on the results and your gaps
in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be
deemed competent for this unit of competency.
 If you are not sure about any aspects of the assessment, please ask for clarification from your assessor.
 Please refer to the College re-assessment for more information (Student Handbook).
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T-1.8.1
ASSESSMENT BRIEF
In this assessment task, you will use your skills and knowledge to undertake budgeting,
financial forecasting and reporting and to allocate and manage resources to achieve the
required outputs for the business unit. You work will also include contributing to financial bids
and estimates, allocating funds, managing budgets and reporting on financial activity.
The assessment is divided into three parts and weight allocations as below:
PART A: WRITTEN REPONSES – 25%
PART B: MANAGE FINANCES PROJECT ON A SIMULATED WORK ORGANISATION – 65%
PART C: PRESENTATION OF AUSTRALIAN HARDWARE FINANCIAL ANALYSIS – 10%
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T-1.8.1
PART A: WRITTEN REPONSES – 25%
Instructions: This part of the assessment comprises the knowledge testing required for the unit
BSBFIM601. This part includes 8 questions and you must respond to all. Use the spaces below to
respond to the questions. Weights and marking allocations are in the marking allocating table.
Question 1. Planning for financial management. (2 marks)
Explain why it is necessary for all business organisations to have effective financial
management systems and explaining how the information held in financial management
systems contribute to ongoing business performance and business planning.
In a business environment, the financial management of the company helps effectively in performing
the activities of the business effectively. The financial management system refers to the different tools
which are applied by the business in order to appropriate manage the finances of the business. In
addition to this, financial management system effectively deals with all the revenue and expenses
which is incurred by the business while conducting the operations of the business. The reason due to
which financial management system are considered to be important as important decisions related to
source of finance, application of finance and revenue generation are taken with the information which
is provided by different tools which are used in financial management. Moreover, finance managers
can check the flow of cash into and out of the business which helps in determining the liquidity
position of the business.
The financial management system effectively provides information regarding the sources of finance
and how much capital a business would be requiring. In addition to this, financial management also
guides the management of the business as to how the funds are to be used by the business and in
which activities the management of the company should make their investments. The financial
management system. In addition to this, the management can also rely on financial management
practices for reducing the costs which are associated with the business so that it can enhance tbe
profits of the business.
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T-1.8.1
Question 2. Establishing budgets and allocated funds. (3 marks)
a) What is a Budget?
b) What data might inform a new budget?
c) How does analysis of previous financial data assist projected resource estimates and
allocations?
a. A budget can be defined as a financial [plan which is formulated by the management of the
company for getting appropriate estimate regarding the income and expenses which the
business would be incurring in the near future. In other words, budgets are forecasts of
expense and income which the business anticipates to be getting from operations. This is a
tool which is effectively used in the planning process of the business and are generally
prepared for a 1-year period. The budgets are prepared on the basis of some estimation,
market survey results, business trends.
b. In a new budget which is formulated by the management of the company estimated revenue
and expenses of the business are provided in an appropriate manner. The estimates which
are presented in the budgets are mainly forecasts of the business and the same is based on
the trends of the business. The new budget can be effectively shows estimates for different
area of performance of the business.
c. In order to prepare a budget of a business, the management of the company considers
previous years actual performance in order to identify the trends of the business. The budget
which is prepared by the business is for planning as well as controlling the activities of the
business. The budget sets targets for the business which is considered by employees of the
business in order to achieve the goals of the business.
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T-1.8.1
Question 3. Implement Budgets. (4 marks)
a) How do profit and loss statements cash flow and using aging summaries contribute to
new budgets?
b) How can you ensure that managers and supervisors in the organisation understand
the budget and understand their reporting requirements with regard to financial
management?
c) Budgets are used to identify and track discrepancies between agreed and actual
allocations. Explain.
d) How do budgets contribute to analysis of existing financial management approaches?
a. The profits and loss statements of the business effectively shows the income and expenses of
the business. It is to be noted that the profits which can be generated by the business is
shown appropriately in the profit and loss statement of the business. The age debtors budget
estimates the credit sales of the business and the same affects the estimation of total revenue
which can be generated by the management of the company.
b. The budget which is prepared by the management of the company needs to be
communicated with all the departments of the business so that all the departments of the
business follows the plan which is laid out by the management of the company. The financial
management practices of a business can only be effective if the same are communicated in
the business. The manager can communicate the budgets and its elements by conducting a
meeting with the departmental heads. The managers can also alternatively mail the budget to
different departments and ask for clarification in case of any doubt arises.
c. The process of budgeting is also used by the management of the company for controlling the
activities of the business and also for measuring variances which can occur between
budgeted estimate and actual performance. A budget helps the management to identify the
weakness in the operation process of the business. On the basis of the same, the managers
of the business can take corrective actions in the business. Therefore, it can be said that the
management of the company can use budgeting process for the purpose of controlling the
activities of the business.
d. A budget is used for planning and forecasting of revenue and expenses of the business which
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