Post-Workshop Assignment: CMI Level 5 Diploma in Financial Management

This document presents a completed post-workshop assignment for the CMI Level 5 Diploma in Management and Leadership, focusing on Financial Management (Unit 520). The assignment covers key aspects of organizational finance, including the relationship between the finance function and other departments, the impact of financial objectives on decision-making, and the differences between management and financial accounting. It also evaluates the impact of regulatory frameworks on an organization's approach to financial management and addresses the challenges organizations face in accessing finance. Furthermore, the assignment delves into budget setting, financial forecasting, and budget management, requiring the formulation and justification of a budget for a management area. The document analyzes factors impacting budget management, specifies corrective actions for budgetary variances, and discusses reporting procedures. The solution includes detailed explanations, workplace examples, and analysis to meet the assessment criteria, showcasing the application of learning from the module.

Level 5 Diploma in Management and Leadership
Module 5 –Financial Management
Post-Workshop Assignment
CMI Level 5Diploma in Management and Leadership
Unit Number 520 – Managing Finance
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Post-Workshop Assignment
Welcome to your Post-Workshop Assignment
The purpose of this post-work is to help you to reflect on and apply the learning gained from this module by
completing a number of structured activities. These outputs will be submitted to the Chartered Management
Institute (CMI) as evidence of application of learning.
CMI Units
By completing the Pre-Workshop Pack, attending and participating in the workshop and completing this Post-
Workshop Pack you will meet the assessment criteria for the following CMI unit:
 520 – Managing Finance:
Learning Outcome 1 – Understand Finance within organisations
1.1 Analyse the relationship between the financial function and other functional areas within
organisations
1.2 Examine the impact of financial objectives on decision making within organisations
1.3 Differentiate between management accounting and financial accounting
1.4 Analyse the impact of organisational and regulatory frameworks on an organisation’s approach to
financial management
1.5 Analyse the challenges organisations face accessing finance
Learning Outcome 2 – Know how to set and manage budgets
2.1 Differentiate between budget setting and financial forecasting
2.2 Evaluate budget setting approaches used by organisations
2.3 Formulate and justify a budget for an area of management responsibility
2.4 Analyse the factors that impact on budget management
2.5 Specify corrective actions to be taken in response to budgetary variance
2.6 Discuss reporting procedures for authorising corrective actions to a budget
What you need to do
As explained during the workshop, you need to carry out all of the activities in this pack as they will provide
evidence of application of learning. This post-work assignment also counts towards the ‘20% off the job’
training time for your apprenticeship.
Read through the pack and begin to plan in time to carry out the different activities. Book time in with any
colleagues you need to work with to make best use of their and your time.
Carry out all the activities and record in the space provided within this pack the actions you took along with
any findings and outputs. Support your analysis, findings and conclusions by providing additional relevant
documents where the task requires this and illustrate your responses wherever possible with specific
workplace examples.
To achieve a Pass, it is essential that you provide evidence for each and every assessment criterion.
You must also pass every section in this assignment.
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Participant Name:
CMI Registration Number:

Assessment
The assessment and internal verification of this Post-Workshop Assignment will be undertaken by the
accreditation arm of The Learning Space (TLS). The following pages provide full details of the CMI units
covered and what the Assessor will be looking for.
To gain the Level 5 Qualification you must meet the assessment criteria for all learning outcomes. For every
assignment, the CMI only distinguishes between a PASS and a REFER.
This is in line with other management awarding bodies and should an assignment not be up to the standard
of a Pass you will have the opportunity to resubmit your work following feedback from the assessor as to
where further work is required.
Submitting your work
 Once you have completed this pack you must return it, along with any supporting information and/or
documents, to [e-mail]
before the next workshop – please refer to your Assignment Submission deadlines.
 Wherever possible send electronic copies via email, but if this isn’t possible, send hard copy to the
address provided on the following page. Ideally these should be posted a few days prior to the
submission date.
REMEMBER: once you have completed the activities in this pack always retain a copy (along with any
supporting documents) for your own records.
Postal submissions should be sent to:
Melanie James
2 Church Close
Dunston
Staffs
ST18 9AF
The following pages provide details of the CMI assessment criteria and the post-workshop assignment. A
separate marking sheet is provided – this is the document that the Assessor/Internal Verifier will use when
assessing your work.
Please remember that this pack is part of your development and it is vital that you approach it with the right
mind-set and are committed to completing it.
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Assignment for Unit 520 – Managing Finance(Guideline word count for the assignment
– 2500 – 3000 words)
Task 1 - Understand finance within organisations
This task relates to the following CMI criteria:
1.1 Analyse the relationship between the financial function and other functional areas within organisations
1.2 Examine the impact of financial objectives on decision making within organisations
1.3 Differentiate between management accounting and financial accounting
1.4 Analyse the impact of organisational and regulatory frameworks on an organisation’s approach to
financial management
1.5 Analyse the challenges organisations face accessing finance
1.1 Finance and its relationship with other business functions
As part of your pre-work and workshop, you explored the different functions in an organisation and their
relationship with the finance function/system. In the space given below, describe how financial systems and
the financial function interact and relate to other functions within your organisation. Discuss the importance of
this relationship to achieve business objectives and strategies.
Description of the relationship between financial systems/functions and other functions
Finance is considered as one of the most significant systems or functional areas within an
organization; and this plays crucial role in joining other functional areas of a business such as
production, marketing, human resource and others. This relationship is shown below:
Relationship Between Finance and Production – The main duty of production department is
the production of goods; and there is a need for raw materials, labour and other expenses for
production. Production department requires money as well as fund for paying all expenses and
the finance department is responsible for providing the required money and funds. Finance
department is responsible for checking the production budget while allowing the necessary funds
for the department. In case the production department works efficiently, there will be increase in
sales as well as profitability and this is helpful in recycling the same fund with high profit to the
finance department. This implies the dependency of both of these departments on each other.
Relationship between Finance and Marketing – The main duty of marketing department is to
ensure the selling of maximum goods or services for satisfying the customers. There will be
decrease in product input cost in case the marketers of the company become able in selling all the
goods and services. Marketing department needs money and fund for the purposes of the
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promotion and distribution of the products; and to make payment to the salesmen, advertising
budget and other promotional activities. For all these expenses, the marketing department
develops the marketing budget and the finance department is responsible for clearing the same. It
implies that the finance department provides the required funds and money to the marketing
department for continuing its operations. This establishes a connection between these two
departments.
Relationship between Finance and Human Resource –Human Resource department or HR
department is considered as another crucial department within a company. HR department is
responsible for managing the employees and finance department is responsible for managing the
money. Therefore, it is possible for both the departments to satisfy the objectives of the firms in
case these two departments work together. The HR department is responsible for developing the
budgets for salaries, employee compensations and others; and the finance department approves
as well as provides this required fund. This indicates the relationship between these two
departments.
Apart from the above, there are other departments like operation and information technology
departments and the responsibility of finance department is to provide these departments with the
required funds for continuing their operations.
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1.2 Financial Objectives &Decision Making
Use the space provided to evaluate how financial objectives impact on organisational/operational decision
making.
Financial objective Impact on organisation/operational decision making
Cost control Cost control begins with identifying the elements of cost and
look that the cost incurred are required and not unnecessary,
and if necessary then plan ways to cut cost, move to less
expensive plan or change service givers.
Business growth Organizations small or big, all grows every year, expands its
geographic areas, more employees are hired, departmental mangers
are required to create managerial structure. Organizations achieve
growth through Joint venture or partnership or licensing.
Profit maximisation
(Gross and Net Profit)
Profit maximization is the primary objective of any organization. It is
required for the survival of the organization, it helps in measuring
standard and helps in social and economic welfare, by allocating
resources like land, capital and labour.
Value for money Value for money is a vital objective for organizations, as a pound on
hand on the present day is worth more than a pound promised in the
future. A pound promised in the future has less value than a pound
on the present day due to inflation. Present value discounts the
future cash flow back to the present date, with the help of average
rate of return and number of periods. Future value calculates how
much a current cash flow would be valued in the future when
invested at a fixed rate of return and number of periods.
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Economic stability It means absence of huge fluctuations in the macro economy,
with an even output growth and stable and low inflation.
Organizations will be able to expand and take risk when there
is economic stability.
Return on investment
Other
ROI is calculated by dividing net profit by total assets. It
measures the organization’s investment in the assets. A higher
ROI means the organization uses efficiently its assets to incur
sales.
Retained earnings- The profit which is not distributed as dividend is
reinvested in the organization or is put to reserve to pay off debt or
purchase a capital asset.
1.3 Management vs Financial Accounting
Use the space provided to identify and explain the differences between management accounting and
financial accounting and the important role they play in organisations (justify your answer).
Management Accounting Financial Accounting
Management Accounting is the
accounting system which gives
information related to the management to
make plans, strategies and policies to
help to run the business smoothly. It
contains both monetary and non-
monetary information. It is prepared as
and when required by the organization. It
is made only for the top management to
take decision. It contains detailed
information about the different
departments. It is neither audited nor
Financial Accounting is an accounting
system that prepares financial statement
of an organization to provide information
to outsiders. It contains financial
information only. It is prepared at the end
of the accounting year. It contains
summarized reports about the financial
position of the organization. It is required
by law. It is made according to specific
standards and formats. It covers the
entire organization, even if they are
present in different geographical region.
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published by statutory auditors. Reports
are made for any period like daily, weekly,
fortnight, monthly or quarterly. Reports
are “future looking” and is prepared using
statistical and scientific methods to take
decision. The reports can include budget
analysis and comparative analysis,
merger and consolidation reports,
feasibility studies and sales forecasting
reports. There is no fixed format for
presenting information .It contains both
quantitative and qualitative information.
The information is historic and predictive
based on decision making.
It is prepared as per GAAP or IFRS. It is
quantitative in nature. . It is required to be
audited and published by statutory
auditor. It shows the profitability, stability,
liquidity and solvency of the organization.
It is by the shareholders, creditors and
banks.
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1.4 Organisational and regulatory frameworks
Use the space provided to evaluate the impact of regulatory frameworks on your organisation (justify your
answers).
Framework Impact on theOrganisation
Companies Act 2006 Improves the corporate governance framework and the
administration of organization. The Act has introduced
a mechanism in which the directors have the authority
to ratify conflicts of interest at board level. Disclosure of
the company details in letters, websites, business
premises and emails, hence authenticating them. The
directors are no longer required to disclose their home
address, hence they get some privacy and ensure that
the financial statements and the directors’ remuneration
report comply with the Act.
Consumer Protection Act1987 The main focus of the Act is safety of the consumer.
There is no fixed limits on claims for personal injury and
most of the claims are settled out of the court, hence
the reputation of the organization remains intact.
Freedom of Information Act 2000 According to this Act the organization is bind by law to
publish information about its activities. This act makes
the public aware of all the activities performed by the
organization, hence the transparency policy helps the
public to have confidence in the organization.
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General Data Protection
Regulation (GDPR) 2018
The Act deals with the protection of personal data of
the citizens. The organization makes sure that the
personal data are only for the reason of collection,
transparent and lawful.
The National Minimum Wage This Act reduced income differences between the
highest paid and the lowest paid hence improve the
quality of living. It also prevents exploitation of the
workers and income distribution is equal.
Trade Descriptions Act 2017 The Act make sure that the services and products are
described properly. Hence customers are not
misguided and they know on what they are spending
their money on when they go to buy.
Finance Act2017 The Act enables the organization to portray the
financial transactions of it which includes both direct
and indirect tax. It helps to know how much revenue
was received and how much expenditure was incurred
and how much service tax has been given
Framework Impact on the Organisation
International Financial Reporting
Standards (IFRSs)
This Act ensure that when the directors are satisfied
that the financial statement portrays a true and fair view
of the organization, then only they can approve the
financial statement. The discloser of the statements are
vital and the accounting estimates are necessary and
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fair.
Other Regulations
1.5 Financial Challenges
Use the space provided to outline whatyou believe arethe financial challenges and considerations that
organisations face. This might include such things as innovation, the competition, strategic goals, business
risks and historical business performance. Identify, explain and justify as least four challenges.
Challenge Potential Impact on the Organisation
Innovation For success of the Network Rail in control period 5 and
beyond innovation and technology is vital. The research and
development department did not charge anything on the
income statement for the year 2016 -2017. Only the cost
pertaining to important development work was capitalized
under the head of property, plant and equipment
Competition According to the rules for central government organizations,
it is mandatory to appoint Comptroller and Auditor General as
the independent auditor in Network Rail. Hence the
organization is not able to follow the Code and order of
Competition and Market Authority which requires the listed
companies to accept a competitive tender process before the
appointment of the auditor.
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Business Risk Unable to prevent a train accident like derailment or
collision which can be avoided, leading to injuries,
fatality. This impacts the reputation, performance and
finance.
Strategic Goals Creating an environment for employees so that they
can give their best. Making the railway industry
inclusive and diversified. Creating an environment so
that everyone is treated with respect and dignity and
feels safe and taken care of. Aims to retain committed
and dedicated employees.
Historical business performance There was reduction in last time injuries. In 2017-18 it was
580 and in 2016-17 it was 693. There was reduction in train
accidents from 80% to 87.9%.The total efficiency generated
in 2017-18 was £125m adverse to target. Cash compliance
was £38m, a bit ahead of the aimed one due to positive
management actions.
Task 2 - Setting and Managing Budgets
This task relates to the following CMI criteria:
2.1 Differentiate between budget setting and financial forecasting
2.2 Evaluate budget setting approaches used by organisations
2.3 Formulate and justify a budget for an area of management responsibility
2.4 Analyse the factors that impact on budget management
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