BSBFIM501: Managing Budgets and Financial Plans - Report

This report analyzes a financial plan and budget management report for Big Red Bicycle Pty. Ltd, focusing on the BSBFIM501 unit. The report details the company's activities, its management team roles, and the financial plans implemented. It examines the selection and analysis of a master budget, including its accuracy and comprehensiveness, while also identifying areas for improvement like employment and marketing expenses. A key aspect is the contingency planning section, which addresses potential issues like unexpected expense increases and proposes solutions such as adjusting expenses and utilizing cost-effective marketing strategies. The report also explores various financial management approaches, including delegation, communication strategies, and staff training, to ensure effective implementation and monitoring of the budget plan. The report concludes with recommendations for financial resource allocation and the use of financial management systems.

Running Head: BSBFIM501 Manage budgets & Financial Plans 1
BSBFIM501 Manage budgets & Financial Plans
Name
Institution
Date

BSBFIM501 Manage budgets & Financial Plans 2
Part 1: Team Budget or Financial Plans
a)
Big Red Bicycle Pty. Ltd is the organization that I work for. It is located in Bendigo, Victoria.
Manufacturing of bicycles is the main activity that the company conducts. Other activities
include; distributing and selling the bicycles through its retail agents that are based in Australia
that happens to be its main consumer and market segment.
b)
Senior management team is the company’s team that I manage. Chief Executive Officer,
Managing Director, Operation General Manager, Senior Accountant, Sales General Manager,
Production Manager and Human Resource Manager are the members of the team that I manage.
Every member of the team plays a key role in ensuring that objectives and goals of Big Red
Bicycle Pty. Ltd are achieved over a period of time as discussed below; Chief Executive Officer
plays a role of managing all the resources and operations of the company. He also acts as a
linkage between the company team and Board of Directors. On the other hand, Managing
Director is responsible for developing and implementing all the policies of Big Red Bicycle Pty.
Ltd. Also, Operation General Manager plays a role of motivating and monitoring the company's
staff whilst coordinating all the entity's operations. Also, Senior Accountant plays a role of
ensuring that all accounting activities in the company are effectively executed to avoid wastage
of financial resources. In addition, Sales General Manager is responsible for developing new
sales approaches to ensure that the revenues and profits of the company are improved. Also,
Production Manager is responsible for ensuring that all processes of manufacturing the bicycles
are conducted efficiently and reliably to avoid scarcity or wastage of resources. Furthermore, the

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Human Resource Manager is responsible for planning, directing and coordinating all
administrative duties of Big Red Bicycle Pty. Ltd (Michael, 2012).
c)
Operational plans and long term plans are the financial plans that I am responsible for
implementing and monitoring. Operational plans provide an overview on contributions that every
team member at Big Red Bicycle Pty. Ltd will offer towards achievement of set objectives and
goals in the short and long runs. I implement and monitor operational plans by clearly defining
and allocating roles and responsibilities of every member to ensure effective execution of
projects to achieve desirable goals. On the other hand, long term plans are aimed at ensuring
survival of the company over a long period of time through boosting its competitiveness in the
market. I will implement and monitor long term plans by conducting further research about
opportunities that can be utilized to achieve all the set long term goals and objectives of Big Red
Bicycle Pty. Ltd (Mills, 2017).
Part 2: Making Changes to Team Budgets or Financial Plans
a) Master Budget with profit projection for FY 2016/2017 was selected as the team budget. The
purpose of the above budget is to depict the current financial position of Big Red Bicycle Pty.
Ltd. This is because the budget is showing the company’s revenues, expenses as well as the
associated net profits which make it easy for making financial decisions (Mills, 2017).
b)
i) Master Budget with profit projection for FY 2016/2017 is achievable. The above claim is
attributed to the fact that Big Red Bicycle Pty. Ltd that total revenues depicted in form of gross

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profits is overweighing the total expenses. As such, the company is left with significantly huge
volumes of financial resources both before and after tax to inject in any ventures aimed at
achieving long term objective of a net profit equivalent to $1,000,000 before tax (Mills, 2017).
ii) Master Budget with profit projection for FY 2016/2017 is accurate. The above claim is
attributed to the fact that all the figures represented on the various components have not been
estimated but rather indicated as whole numbers (Mills, 2017).
iii)
Master Budget with profit projection for FY 2016/2017 is comprehensive. The above claim is
attributed to the fact that the budget under consideration is showing figures and all elements of
an income statement as a financial statement. Revenues and Expenses have been fully specified
with their corresponding figures which make the budget to be considered as comprehensive
(Mills, 2017).
c)
Employment expenses and marketing expenses are the areas that could be adjusted to make
improvements in the team budget. The above areas are significantly increasing on the magnitude
of total expenses and thus adjusting them could help to widen the net profit. Moreover, Big Red
Bicycle Pty. Ltd has an objective of achieving a net profit of $1,000,000 before tax. As such,
adjusting employment and marketing expenses downwards could help to achieve the
aforementioned objective of the company as the net profit margin will be improved (Mills,
2017).
d)

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In order to discuss and clarify the above team budget, I would approach the Senior Accountant of
Big Red Bicycle Pty. Ltd. This is because the above team member is responsible for ensuring
that all accounting activities such as formulation of income statements and balance sheets are
effectively executed. As such, he possesses comprehensive knowledge about the components and
figure depicted in the company’s Master Budget for projections (Mills, 2017).
Part 3: Contingency Planning
Below is the contingency plan addressed through section (a) from points (i) up to (v)
Unexpected increment in the expenses of the company is an example of an event that could give
rise to problems during implementation phase of the team budget plan. Unexpected increases in
expenses could happen due to increases in the minimum wage which could increase the
company’s expenditure on wages and salaries of its team members.
a)
i) More so, occurrence of the above events could significantly resources the available financial
resources needed to ensure that all project activities are timely executed as initially planned
(Bakker, 2016).
ii)
I would consult the previous financial records concerning employee and marketing expenses to
find out whether they are on a rising or declining trend so as to make appropriate adjustments.
Such an approach could help to ensure that the available financial resources are appropriately
allocated to achieve the set objectives and goals of the company (Bakker, 2016).
iii)

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I would adjust the employment and marketing expenses of the team budget to ensure that the net
profit margin is maximized to achieve the set objective.
iv)
I would align the adjustments in part (iii) to the original plan in task 2 by reducing on
employment and marketing expenses to reduce on the overall expenses that are incurred by the
company. Employment expenses could be reduced by firing or reducing on wages and salaries of
underperforming employees. On the contrary, marketing expenses could be reduced by utilizing
cheaper and effective advertising mediums like social media platforms rather than print medium
(Bakker, 2016).
v)
Implementation of the contingency plan could lead to increment in the net profit margin as the
total expenses are likely to be reduced. Therefore, the company’s objective of achieving a net
profit of $1,000,000 before tax is likely to be achieved after implementation of the contingency
plan (Bakker, 2016).
Part 4: Financial Management Approaches
a)
Delegation of duties is an organizational process that can be utilized to disseminate relevant
details of the agreed plan. As such, Chief Executive Officer and Managing Director can be two
individual that can be delegated by the organization to disseminate relevant details of the agreed
plan. The above individuals have a direct linkage between the team members, senior

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management team and Board of Directors which will ease information flow across all
departments (Bakker, 2016).
b) The following are the steps that could be undertaken to disseminate information within an
organization
i. Identification of the target audience for the information to be disseminated
ii. Identification of all feasible modes of communication at the organizations such as
meetings and emails
iii. Evaluation of identified modes of communications
iv. Selection of the most appropriate mode of communication used at the organization
v. Selection of individuals and other resources needed to execute the role of disseminating
information to the identified group of individuals
vi. Dissemination of information to intended group of individuals by selected persons.
c)
Organizing and conducting meetings between the staff, senior management team and the Board
of Directors is an effective approach that I would utilize to communicate and gain agreements on
details of the plan. Most significantly, such a kind of meeting will help to ensure that all
members at the company are involved in the discussions and agreements concerning the plan
(Bakker, 2016).
d)

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Clarification of the duties of every team member is the team responsibility that I would allocate
to the team prior to implementation of the budget plan. Such an approach is likely to reduce on
incompetence among team members concerning defined tasks by the plan (Bakker, 2016).
e)
I would conduct interviews among the team members randomly as a way of assessing the degree
of awareness about their responsibilities and objectives of the budget plan. Most importantly,
feedback from the interviewees will help to determine the degree of awareness among the team
members concerning their responsibilities and objectives of the budget plan (Bakker, 2016).
d)
The organization should subject all team members to financial management training particularly
on how to use various financial management softwares like Sage Intacct, Xero, Zoho Finance
Plan and QuickBooks. Such training will widen practice knowledge of team members which will
facilitate effective execution of financial management roles (Bakker, 2016).
e)
I would get access to the organization’s financial management database system. I would use the
above organization system to effectively allocate financial resources to various departments
within the organization. In this case, all departments are likely to execute the project activities
within defined schedules due to effective allocation of all financial resources (Bakker, 2016).

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References
Bakker, J (2016). Five Steps to creating your (achievable) budget: Retrieved from:
https://www.moneybrilliant.com.au/blogs/five-steps-to-creating-your-achievable-budget/
Michael, A (2012). Effective teamwork: Practical lessons from organizational research. John
Wiley & Sons. pp. 241–268.
Mills, J (2017). The SMART Way to Plan Your Budget: Retrieved from:
http://shuriken.com/smart-budget-planning/