College for Adult Learning: BSBFIM501 Budget and Financial Plan Report

This report, prepared for the BSBFIM501 module at the College for Adult Learning, focuses on the crucial aspects of managing budgets and financial plans within a company. It begins with an introduction to financial management approaches, differentiating between traditional and modern views, and then identifies two critical issues affecting the budget: inaccuracy and time requirements. The report proposes solutions, including flexible budgeting and team-based approaches, and includes an updated budget for Big Red Bicycle Pty. Ltd. The principles of incremental and zero-based budgeting are discussed, alongside the importance of effective listening and questioning. Furthermore, the report outlines a contingency plan to address budget shortfalls and details on petty cash expenses and team budgets. The report also discusses the types of resources and systems used in financial management, the accounting principles applied to petty cash management, and the current requirements of the ATO GST. Finally, the report covers expense claims and key requirements for effective financial management. The report concludes with a detailed discussion on the contingency plan, including strategies to mitigate risks and ensure financial stability.

BSBFIM501 Manage
Budgets and Financial Plans
(Release 1)
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Table of Contents
Introduction................................................................................................................................3
Assessment task 1......................................................................................................................3
Financial management approaches........................................................................................3
Section A....................................................................................................................................3
Two issues identified the budget............................................................................................5
Email to manager...................................................................................................................6
Question 4..............................................................................................................................6
Updated budget......................................................................................................................6
Principles and technique of managing budget.......................................................................9
Section b.....................................................................................................................................9
Contingency plan...................................................................................................................9
Budget shortfall....................................................................................................................10
Negotiating and confirming.................................................................................................10
Active listening and questioning..........................................................................................10
Email....................................................................................................................................10
Contingency Plan.................................................................................................................11
TASK 2....................................................................................................................................11
TASK 3....................................................................................................................................18
TASK 4....................................................................................................................................23
References................................................................................................................................27
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Introduction
The following report focuses on managing budget in financial plan for the company.
Management of budget and financial plan is the procedure of making policies Strategies and
budget for the company so that you need not have to face any kind of loss in in different
situations (Akinradewo and et.al 2019). This report provides detailed information about
financial management approaches apart from this budget and contingency plan for the
companies also mentioned in this report. Along with this various financial management
approaches and their implementation is also being discussed in this report. Besides this
monitoring and control link Finance for the company is also defined in this report. This report
provides detail review and evaluation of financial management process as well
Assessment task 1
Financial management approaches
Traditional view approach
Financial Management is concerned with management of assets of the business and the main
objective of financial management is to maximize the wealth of the business. The main duty
of Finance manager is to acquire funds from different sources for the organisations that can
run all the functions smoothly.
Modern view approach
As the globalisation and liberalization is increasing tremendous in the business world. So
financial approaches also get formed with the help of information technology. It does
increase the competition so that many companies have to go for mergers and takeovers and
also them to improve quality of their products and services. Therefore financial management
also have to impose modern view approach so that I should not have to go through to any
kind of difficulties and loss.
Section A
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Two issues identified the budget
Inaccuracy
Budget physically contains a set of assumptions which the company need to formulate. But in
accuracy can be a major drawback of the budget in accuracy can be obtained due to business
environment changes deferred the revenue of the company get decrease and the cost structure
will also increases and the expected budget of the company do not get matched. In accuracy
in the budget can be occurred due to the economic downturn and sudden reduction in the
revenue level (Wu and et.al 2018). Due to this budget of the company not matched with the
revenue. In this case gross profit of the company is producing due to economic downturn and
changes in the climate.
Time requirement
Sometimes it can be very time consuming and when the organisation food sample of money
and time to create a budget and if the budget do not provide the outcome which is required by
the business then it can be considered as one of the biggest mistake of the organisation. As
organisation put a lot of time effort and also invested money to create a budget and as per the
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budget place at various decisions and strategies of the companies so that they may attain good
profit in the long run.
Two changes in the budget
As the budget is not proper and therefore it is not meeting the Expectations of the business
but with the help of certain changes that can provide immense profit and growth to the
business. Withthe change in the budget business can game good profit.
Flexible budgeting and forecasting
It is very difficult for the business to use same budget in different conditions and situations.
Things can be changed on monthly and quarterly basis so the budget should be appropriate to
meet such changes and provide good profit to the business (Padilla and et.al2019). So the
budget should be flexible so that if any e worst situation comes in front of the business
company can survive without profit and revenue.
Environment of entire team
Budgeting is a process of team effort so that every department of the organisation was
contributes their suggestions and opinions to create a budget for the company. Then only
budget will provide Expected return to the company and provide immense growth to the
business as well.
Email to manager
Dear sir
The purpose of writing this mail is to bring your kind notice that an urgent meeting should be
held to discuss such area of budget such inaccuracy and time management. Due to these
issues company may face loss in the upcoming months. I hope you will consider this and
bring an appropriate solution.
Sincerely
Tim
Question 4
Updated budget
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Big Red Bicycle Pty. Ltd.
Master Budget FY 202x/202x
FY Q1 Q2 Q3 Q4
REVENUE
Commissions (2% sales) 60,000 15,000 15,000 15,000 15,000
Direct wages fixed 200,000 50,000 50,000 50,000 50,000
Sales 35,00,00
0
10,00,000 750,000 10,00,000 750,000
Cost of Goods Sold 400,000 100,000 100,000 100,000 100,000
Gross Profit ,340,000 585,000 585,000 585,000 585,000
EXPENSES
General and Administrative Expenses
Accounting fees 16,000 4000 4,000 4000 4,000
Legal fees 5,000 1,250 1,250 1,250 1,250
Bank charges 600 150 150 150 150
Office supplies 5,000 1,250 1,250 1,250 1,250
Postage and printing 400 100 100 100 100
Dues and subscriptions 500 125 125 125 125
Telephone 10,000 2,500 2,500 2,500 2,500
Repairs and maintenance 50,000 12,500 12,500 12,500 12,500
Payroll tax 25,000 6,250 6,250 6,250 6,250
Marketing Expenses
Advertising 280,000 70,000 70000 70,000 70,000
Employment Expenses
Superannuation 45,000 11,250 11,250 11,250 11,250
Wages and salaries 500,000 125,000 125,000 125,000 125,000
Staff amenities 20,000 5,000 5,000 5,000 5,000
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Occupancy Costs
Electricity 40,000 10,000 10,000 10,000 10,000
Insurance 100,000 25,000 25,000 25,000 25,000
Rates 100,000 25,000 25,000 25,000 25,000
Rent 200,000 50,000 50,000 50,000 50,000
Water 30,000 7,500 7,500 7,500 7,500
Waste removal 50,000 12,500 12,500 12,500 12,500
TOTAL EXPENSES 1,401,50
0
350,375 350,375 350,375 350,375
NET PROFIT (BEFORE INTEREST AND
TAX)
938,500 234,625 234,625 234,625 234,625
Income Tax Expense (25%Net) 234,625 58,656 58,656 58,656 58,656
NET PROFIT AFTER TAX 703,875 175,969 175,969 175,969 175,969
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Sales Centre Expense Budget
Sales Centre A Sales Centre B Sales Centre C
Commissions $20,000 $20,000 $20,000
Wages $100,000 $100,000 $100,000
Telephone $3,000 $3,000 $3,000
Office supplies $1,000 $1,000 $1,000
Principles and technique of managing budget
Incremental budgeting technique
This budgeting technique uses historic income and expenses of the business please also look for
the previous year’s budget for that budget can provide different output in result to the company.
Which is the advantage of incremental budgeting is that it is very simple and quick and provide
accurate data to the company.
Zero based budgeting
This is one of the popular techniques off budgeting. Is budget linked with the business planning
process of the company and provide proactive and focused objectives to the company. Apart
from this it provides accurate and realistic information to the company but it is a little time
consuming technique.
Effective listening and questioning
All the above data is necessary for the company so the management must ensure that they make
certain changes in the budget so that complete don’t have to face any kind of difficulties and loss
in the upcoming years.
Section b
Contingency plan
Contingency plan is known as a course of action which is designed to help the organisation to
face such events which is not covered in the budget of the company (Alhadi and et.al 2018).
Basically it is a plan B and work as an alternative option for the organisation.

To the management must add these two activities so that organisation does not have to run short
of sales and it did not affect the revenue of the company as well.
Budget shortfall
The main reason behind shortfall in budget is the changes in current climate defer the company is
not earning as per the target in recent budget is suffering from shortfall. But with the help of
contingency plan company should focus on providing some discounts and it also increase the
promotional activities to increase the sales of the products.
Negotiating and confirming
Tom get agreed to make changes in the budget and use contingency plan to earn profit.
Active listening and questioning
Budget may fall down in university vision but it is the responsibility of the management in the
must use where is contingency plan to face losses and expenses and should not hamper the profit
of the company as well.
Email
Dear sir
This is to bring your kind notice that i have prepared contingency plan which can be beneficial
for the company and will help the company to overcome the challenges as well. I hope you look
into this plan .
Regards
Tim

Contingency Plan
Contingency Plan
Company name: Big Red Bicycle Pty. Ltd.
Person developing the plan:
Name: Position:
Risk identified:
Strategies/activities to minimise the risk By when By whom
To minimize the risk of sales less than 20% big red
bicycle may provide discounts to the customers and
especially those customers who are buying the products in
Bulk
By the end
of the
financial
year
By sales man
and employees
of the
organisation
Increase marketing and promotional activities with the
help of social media
At the end
of 2020
By marketing
department

TASK 2
1
Petty cash expenses