Assessment Cover Sheet
Assessment Cover Sheet
Student Name (Please write in block letters) Student ID GI
Unit Code / Unit Name BSBFIN601 Manage organisational finances
Assessment No. Task 2
Student Declaration:
I certify that:
I declare that I have received sufficient training prior to the assessment.
I declare that the work submitted is my own, and has not been copied or plagiarised from any person or source.
I have read the Assessment and Student Handbook and I understand all the rules and guidelines for undertaking assessments.
I give permission for my assessment material to be used for continuous improvement purposes.
Student Signature: Date: / /
Trainer/Assessor Feedback
Trainer/Assessor Signature Date: / /
Result: | Satisfactory | Not Satisfactory |
Assessment Task 2 Project
Case study:
Introduction
Online Media Solutions is a marketing and web development business based in Melbourne, Australia. The business started in operations in 2015 and has seen exponential growth since its establishment.
The business operates in the web service industry to offer superior and unique services to small businesses and institutions (B2B business model). Our experience and expertise in web sales and e-commerce give us the backing to provide solutions that are currently lacking in the market.
There is an all-time high demand for web development and marketing for small businesses, with signs of rising further. Interestingly, few web developers have taken advantage of this opportunity, leaving the industry with no dominant participants.
The projects high costs and the focus on more prominent companies and institutions could contribute to why this market remains untapped. We will have a system that will reduce the project costs dramatically, allowing us to offer quality services at reduced costs.
Business plan
Business plan excerpt
Company details:
Company name: Online Media Solutions, Pty. Ltd
Company address: 2/10 Lawn court, Craigieburn, 3064, VIC
Mission
Provide best-in-class design services
Make a positive impact on our customer businesses
Be respected and admired by peers
Our vision
To provide best-in-class web design and development services in a simple, effective, and cost-effective manner to the target audience.
Objectives
The objectives of Online Media Solutions are as follow:
To exceed customer expectations.
To provide cost-effective and quality services to our clients.
Build and maintain long-term relationships with the clients.
To increase operational efficiency.
To venture into new markets based on the opportunities identified.
Keys to Success
We will offer quality web services to small businesses and institutions at affordable prices.
To build and tailor our services to small businesses.
Positioning as a viable solution alternate to more established brands
Services
We currently offer the following services to our clients:
Interface and Web Design
Graphics design
Website development
Domain and web hosting
Video editing
Blog development
Search engine optimisation
E-commerce
Values
Quality service to our clients
Integrity & Accountability
Reliability
Quality
Innovation
Respect
Strategic directions
The strategic direction of ONLINE MEDIA SOLUTIONS is to achieve its mission and vision is through:
Increasing operational efficiency
Engaging with customers through quality research and understanding supported by marketing techniques.
Establishing a reputation for exceptional customer service and end to end solutionsSupporting people to perform via training and performance managementControlling costs through operational efficiency
Business model
Online Media Solutions is a full-service web solutions provider for businesses. The company offers services through the mode of its B2B engagements.
B2B services:
Online Media Solutions service portfolio includes Web Design, Graphics design, Website development, Domain and web hosting, 2d & 3d animation, Blog development, Search engine optimisation and E-commerce. The project cost will be estimated by the appropriate number of hours needed to complete the project.
The sales team will aggressively track prospective clients and sell the services provided for businesses.
Operational model and strategies
B2B engagements
Lead generation Lead generation refers to creating and generating prospective consumer interest or inquiry into a businesss products or services. This will be done by building a database of prospective customers using social networks, business listings, internet search etc.
Sales pitch A sales pitch is a line of talk that attempts to persuade someone or something with a planned sales presentation strategy of a product or service designed to initiate and close a product and service sale. Sales professionals prepare and give a sales pitch using the following methods:
Face to face meetings
E-mailing marketing contacts from the leads
Financial summary
Sales are expected to grow to $18,000,000 in the next financial year.
Expenses will be the same as the previous year. Though, some of the expenses will increase. Some expenses will increase by a direct amount, and other expenses will be accounted for with the inflation rate. Information on expenses that will have increase by direct amount is given in meeting notes.
The inflation rate for expenses is given below. The expenses that will be impacted by inflation are as follow: (further information on expenses is given in meeting notes with an accountant)
Cleaning, repair and maintenance expenses (3%)
Electricity (3%)
Wages and salaries (10%)
Fringe benefits tax (5%)
Website and marketing expense (10%)
Profits will be built by making a secure customer base. Loyalty cards will be given at the stores. The total cost to do so will be $12,000 to be included in advertising expenses.
To reduce the principle of loan amount by $80,000 from the current year profits generated.
Manage debtors more efficiently and reducing the amount in trade debtor account by $200,000.
Financial statements for the last two years (Online Media Solutions)
Profit and Loss statement
Online Media Solutions Pty LTD.
For 12 months ended
Profit & Loss Actuals 2019/20 2020/21
Revenue Sales 12,600,000 14,260,000
Cost of Goods Sold 5,200,000 6,100,000
Gross Profit 7,400,000 8,160,000
Expenses Interest Expense 90,000 88,000
Depreciation expenses 160,000 160,000
Insurance expenses 24,000 24,600
Store Supplies - 4,300
Advertising 246,000 260,000
Cleaning, Repairs & Maintenance 82,000 84,000
Rent 2,500,000 2,750,000
Website marketing expenses 14,000 16,000
Electricity Expense 30,000 32,000
Fringe Benefits Tax 34,000 38,000
Wages & Salaries 2,200,000 2,400,000
Superannuation 209,000 228,000
Workers Compensation 44,000 48,000
Total Expenses 5,633,000 6,132,900
Net Profit (Before Tax) 1,767,000 2,027,100
Income Tax 530,100 608,130
Net Profit 1,236,900 1,418,970
Balance Sheet
Statement of financial position
Online Media Solutions Pty LTD.
Statement of Financial Position
As at 30 June 2019/20 2020/21
Assets Current Assets Cash on Hand 90,000 98,000
Cheque Account 180,000 220,000
Deposits Paid 1,200,000 1,200,000
Trade Debtors 1,115,000 1,230,000
Merchandise Inventory 1,600,000 1,720,000
Total Current Assets 4,185,000 4,468,000
Fixed Assets Cost of motor vehicle 600,000 600,000
Accumulated Dep (120,000) (120,000)
Cost of Furniture & Fixtures 2,400,000 2,600,000
Furniture & Fixtures Accumulated Dep (720,000) (780,000)
Cost of Office Equip 500,000 500,000
Office Equip Accumulated Dep (100,000) (120,000)
Total Fixed Assets 2,560,000 2,680,000
Total Assets 6,745,000 7,148,000
Liabilities Current Liabilities Credit card 32,000 36,000
Trade Creditors 700,000 730,000
GST Collected 1,260,000 1,426,000
GST Paid (840,000) (890,000)
Superannuation Payable 209,000 228,000
income Tax Payable 530,100 608,130
Total Current Liabilities 1,891,100 2,138,130
Long-Term Liabilities - Bank Loans 1,800,000 1,600,000
Total Liabilities 3,691,100 3,738,130
Equity Owner/Shareholders Equity 700,000 700,000
Retained Earnings 1,000,000 1,200,000
Dividends Paid (397,100) (497,230)
Current Year Earnings 1,767,000 2,027,100
Total Equity 3,053,900 3,409,870
Notes from meeting with Accountant:
Notes from meeting with Accountant:
The sales target for the year 2021/2022 set in the business plan is 18,000,000. The proportion expected from the analysis of the previous study for each quarter is as follow:
Quarter 1: 22%
Quarter 2: 30%
Quarter 3: 21%
Quarter 4: 27%
The cost of goods sold will be in the same proportion as 2020/21.
Rent expense will increase by 10% this year.
Store supplies will be the same as the previous year.
Interest expense for the current year will decrease by the amount of $6,000.
A new expense is to be included in the new budget that will be under the name of cleaning and maintenance labour charges. 60% of the amount from cleaning and maintenance expenses will be included in this expense. Only 40% will be accounted for in cleaning and maintenance expense.
Depreciation will be the same as the previous year.
An expected increase in expenses: (inflation rate given in business plan summary)
Cleaning, repair and maintenance expenses
Electricity
Wages and salaries
Fringe benefit tax
Website and marketing expense
The following expenses will be paid in equal amount for each quarter:
Rent expense
Interest expense
Insurance expense
Website marketing expense
Depreciation expense
Advertising expense
Store supplies expense will be paid in the third quarter.
Other expenses will be distributed based on the proportion of sales made in each quarter.
Statutory requirements
Superannuation: 9.5%
Company tax: 30%.
Workers compensation: 2%
Based on the analysis of historical data, it is expected that the debtor's balance at the end of each quarter is expected to be 15% of the sales made. Furthermore, it is expected that 1% of the debtor balance will be overdue for 90 days, 4% overdue for 60 days and 10% for 30 days.
For GST cash flow budget:
Statutory requirements: 10% of recorded sales. No capital purchase is recorded for this year. However, the expenses where the GST will be paid include.
Insurance expense
Store supplies
Advertising expense
Cleaning, Repairs & Maintenance
Electricity expense
Website marketing expense
GST cash flow is to be maintained to maintain audit trial. This will ensure that there are discrepancies between agreed and actual allocations for cash flow analysis for GST are identified.
Online Media Solutions Budgeting policy and proceduresBudget Development Process
The standard process for developing budgets will follow the following steps:
Identify budget objectives
Gather previous years financial data.
Gather anticipated changes in the budget from the stakeholders.
Incorporate identified trends.
Develop a budget based on the formats provided in MS excel.
Final approval. Budget Objectives
Online Media Solutions prepares budgets to meet various company objectives. Budgets are prepared:
To have more realistic figures on the companys future growth and profit.
To predict cash flow.
To comply with the statutory and legislative requirements.
To allocate funds.
To have a birds-eye view on the trade debtors.
Guidelines for the preparation of budget
Conduct a detailed analysis of previous financial data to identify different quarters of the financial year that have generated a profit or loss and accurately determine resources allocation for each quarter of the budget.
Ensure that you critically review the Business plan given in the case study to establish critical dates of the transactions and allocate the same in the budget for the next financial year.
Make informed estimates of new items given in Business plan for inclusion in the budget.
Review statutory requirements given in the case study to prepare a budget that is compliant and correctly documents the companys liabilities for tax.
Budget Variances and Schedules
KPIs that should be monitored:
Variance in sales
Variance in gross profit
Variance in total expenses as a percentage of the sale
Budget variance is to be calculated for each quarter. It should be completed within the last week of the quarter.
Reports on variance are to be provided to the General Manager of the organisation.
Priorities in an investigation of the variances.
Identifying the primary cause of the variance.
Identify the reasons that led to this cause.
The accountant has the responsibility to manage compliance due dates.
Your role and responsibilities
You are working as Finance Manager in Online Media Solutions. You report to the General Manager of the organisation.
The General Manager wants you to manage finances of Online Media Solutions. This includes contributing to reviewing financial information, analysing financial risks, preparing a budget and reporting on financial activity.
As part of your job role, you have the following responsibilities:
Analyse critical dates and initiatives in the business plan and cash flow trends
Assess reasons for losses or profits identified in previous financial reports
Examine statutory compliance requirements and tax liabilities.
Examine existing software to determine its suitability for financial management.
Create a budget based on previous financial data in accordance with compliance, organisational, and statutory requirements.
Distribute budgets and ensure managers and supervisors are aware of budgets, reporting requirements, and financial delegations.
Ensure that there are no opportunities for funds to be misappropriated.
Examine and revise profit and loss statements, cash flows, and ageing summaries as needed.
Using audit trails, identify discrepancies between agreed-upon and actual allocations.
Determine the requirements for organisational and statutory financial reporting.
Identify and prioritise key issues in statements for review and decision-making.
Make financial recommendations.
Examine the efficiency of financial management processes.
Skills Test:
This assessment task requires you to take on the role of Finance Manager in Online Media Solutions.
This assessment task requires you to demonstrate the skills and knowledge required to manage the finances of the organisation given in the case study. It includes contributing to the review of financial information, analysing financial risks, preparing a budget, and reporting on financial activity.
To do so, you are required to complete the following activities:
Activity 1: Prepare for financial managementActivity 2: Develop budget from previous financial data and notes from the accountant
Activity 3: Circulate budgets
Activity 4: Prepare budget variance report
Activity 5: Prepare a report on the effectiveness of existing financial-management approaches
The roles and their responsibilities: Relationships with stakeholders such as External financial advisers and General manager
The assessment task requires you to communicate with a number of organisational stakeholders. The main roles applicable to the assessment task includes:
Role number 1: General Manager: The General Manager is the individual who supervises or is in charge of the organisation. They belong to a higher rank or status. Their job role and responsibilities are:
Assign a team to you to complete the project.
Assist you in understanding the task requirements.
Provide you with information about job roles and responsibilities.
Supervise you in completing the assessment task and requirements.
Participate in meetings based on the Script provided.
Role number 2: Managers and supervisors: The managers and supervisors are the students co-worker or workfellow. They are associates that the candidate works with. Their job role and responsibilities are:
Assist you in completing the project on time.
Participate in a healthy and open discussion.
Participate in meetings based on the Script provided.
Note:
The trainer/assessor will take on the role of General Manager.
The trainer/assessor will assign the roles of stakeholders for each activity.
Each student will be assessed individually for all assessment activities.
Timeframe to complete the project:
Two weeks (You have two weeks to complete the project)
Task requirements
You will be assessed on your technical knowledge and skills to complete this projectYou will be assessed on working in a team environment and meeting your job role and responsibilities.
You must follow the instructions provided by the General Manager.
All individuals must complete their role and assigned responsibilities and meet the specified deadlines.
The task must be completed in the specified timeframe.
Activity 1: Prepare for financial managementThis activity requires you to prepare for the financial management of Online Media Solutions.
To do so, you must follow the steps given below and documents the outcomes using Template 1.
Step 1: Evaluate reasons for profits identified from the financial reports of the previous year.
Analyse the financial statements of the Online Media Solution given in the case study.
Determine and document reasons for profits identified from the financial reports.
Document the following using Template 1.
Profits of Online Media Solutions in the last two (2) years.
Two (2) reasons for profits earned by the Online Media Solutions.
An explanation of each reason.
Step 2: Analyse critical dates and initiatives in the business plan and cash flow trends.
Analyse the financial statements and business plan summary of the Online Media Solution given in the case study.
Determine the critical dates and initiatives that will require or generate resources for Online Media Solution Pty LTD. in the next financial cycle and document using Template 1.
Step 3: Examine statutory compliance requirements and tax liabilities.
Assess the operations of the Online Media Solutions, conduct online research, examine and document the following using Template 1.
Statutory requirements
Compliance requirements
Tax liabilities
Step 4: Examine existing software to determine its suitability for financial management.
Determine the operations of the training organisation based on the information given in the case study.
Conduct online research, examine two (2) existing software in the market and determine their suitability for the financial management of the Online Media Solutions.
Document the following using Template 1.
Two (2) existing software in the market.
Features of each software and their suitability for the financial management of the Online Media Solutions.
Template 1: Prepare for financial managementPrepare for financial management (800-1000 words)
Reasons for the profits identified from the financial reports of the previous yearProfits of Online Media Solutions in the last two (2) years.
Two (2) reasons for profits earned by the Online Media Solutions.
An explanation of each reason.
Critical dates and initiatives that will require or generate resources for Online Media Solution Pty LTD. in the next financial cycle
Statutory compliance requirements and tax liabilities
Examination of existing software
Two (2) existing software in the market.
Features of each software and their suitability for the financial management of the Online Media Solutions.
Performance Criteria/Performance Checklist: Activity 1
This task must address the following performance criteria/ performance checklist.
To be assessed as satisfactory (S) in this assessment task, the participant needs to demonstrate competency in the following critical aspects of evidence S N/S Trainer/Assessor to complete(Comment and feedback to students)
Evaluated reasons for profits identified from the financial reports of the previous year.
Analysed the financial statements of the Online Media Solution given in the case study.
Determined and document reasons for profits identified from the financial reports.
Documented the following using Template 1.
Profits of Online Media Solutions in the last two (2) years.
Two (2) reasons for profits earned by the Online Media Solutions.
An explanation of each reason.
Analysed critical dates and initiatives in the business plan and cash flow trends.
Analysed the financial statements and business plan summary of the Online Media Solution given in the case study.
Determined the critical dates and initiatives that will require or generate resources for Online Media Solution Pty LTD. in the next financial cycle and document using Template 1.
Examined statutory compliance requirements and tax liabilities.
Assess the operations of the Online Media Solutions, conduct online research, examine and document the following using Template 1.
Statutory requirements
Compliance requirements
Tax liabilities
Examined existing software to determine its suitability for financial management.
Determined the operations of the training organisation based on the information given in the case study.
Conducted online research, examine two (2) existing software in the market and determine their suitability for the financial management of the Online Media Solutions.
Documented the following using Template 1.
Two (2) existing software in the market.
Features of each software and their suitability for the financial management of the Online Media Solutions.
The students performance was: Not satisfactory
Satisfactory
Feedback to student:
Student signature
Observer signature
Activity 2: Develop budget from previous financial data and notes from the accountant
This activity is a continuation of Activity 1.
This activity requires you to conduct an analysis of the past outcomes and prepare the following budgets based on this analysed information and the budget plan summary.
Sales and profit budget
GST Cash flow budget
Debtor ageing summary
The budgets must be prepared on a quarterly basis.
When preparing the budgets, you must ensure that you must:
Conduct a detailed analysis of previous financial data to identify different quarters of the financial year that have generated a profit or loss and to accurately determine the allocation of resources for each quarter of the budget.
Ensure that you critically review the Business plan summary given in the case study to establish critical dates of the transactions and allocate the same in the budget for the next financial year.
Make informed estimates of new items given in Business plan summary for inclusion in the budget
Review statutory requirements given in the case study to prepare a budget that is compliant and correctly documents the companys liabilities for tax.
The following formats will be used when preparing Online Media Solutions budgets. You must create similar templates in MS-Excel to prepare budgets and submit the printout of the budgets to your trainer/assessor.
Sales and Profit Budgets:
PROFIT BUDGET 2021/22 Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4
Revenue Sales Cost of Goods Sold Gross Profit Expenses Interest Expense Depreciation expenses Insurance expenses Store Supplies Advertising Cleaning, Repairs & Maintenance Cleaning and maintenance labour charge Rent Website marketing expenses Electricity Expense Fringe Benefits Tax Wages & Salaries Superannuation Workers Compensation Total Expenses Net Profit (Before Tax) Income Tax Net Profit GST Cash Flow Budget
CASH FLOW ANALYSIS GST 2021/22 Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4
GST Collected Less GST Paid GST Payable Aged Debtors
AGED DEBTORS BUDGET TOTAL Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4
Total Debtors Current 30 Days 60 Days 90 Days
Performance Criteria/Performance Checklist: Activity 2
This task must address the following performance criteria/ performance checklist.
To be assessed as satisfactory (S) in this assessment task, the participant needs to demonstrate competency in the following critical aspects of evidence S N/S Trainer/Assessor to complete(Comment and feedback to students)
Conducted a detailed analysis of previous financial data to identify different quarters of the financial year that have generated a profit or loss and accurately determine resources allocation for each quarter of the budget.
Ensured that you critically review the Business plan summary given in the case study to establish critical dates of the transactions and allocate the same in the budget for the next financial year.
Made informed estimates of new items given in Business plan summary for inclusion in the budget.
Reviewed statutory requirements given in the case study to prepare a compliant budget and correctly document the companys liabilities for tax.
The students performance was: Not satisfactory
Satisfactory
Feedback to student:
Student signature
Observer signature
Activity 3: Circulate budgets
Your role will be to act as Finance Manager.
Your trainer will act as Chris (CEO of the business)
Your trainer/assessor will allocate the role of Senior Managers and Supervisors (2 each) to the staff members.
You will first document the budgetary notes and distribute them to the senior managers and supervisors.
You will then deliver a presentation on the budgets prepared in Activity 2 of this assessment task.
At last, you will engage in discussion with the stakeholders (Senior Managers, Supervisors and General Manager) to address their issues.
Activity context:
You have successfully prepared the budget for the financial year 2021/2022. As per the companys procedures, the budget must be approved by the stakeholders before its implementation.
So, the General Manager of Online Media Solutions Pty LTD has called a meeting with you, senior managers and the supervisors. The CEO also provided you with the information that he wants to discuss the best option for the new accounting system based on the company guidelines of selecting the accounting software (provided in the case study) in this meeting.
Description:
The General Manager of the organisation has asked you to prepare and deliver a presentation to provide an overview of the information contained within the budget.
Before delivering the presentation, he wants you to prepare keynotes from the budget and disseminate them to the stakeholders (Senior Manager, Supervisors and General Manager of the company).
The key points that the notes must include are as follow:
Major reasons for the previous profits and losses.
Assumptions made within the budget.
Notes to implement and monitor the budget expenditure on a regular basis.
After distributing the budget notes to the stakeholders (Senior Managers, Supervisors and General Manager), he wants you to prepare a presentation that must include the following:
Overview of the following budgets:
Sales and profit budget
GST cash flow budget
Debtor ageing summary
Note: You can use screenshots of budgets you prepared in the spreadsheets in your presentation.
Reporting requirements for each quarter.
Financial delegations of Senior managers, managers and supervisor for budget implementation.
Reasons for previous profit and loss for each quarter.
After the completion of the presentation, you will be required to address the concerns of the stakeholders present during the meeting.
To do so, you must answer the questions asked by the stakeholders and document your response using Template 2.
The following questions are to be asked by the stakeholders (Senior Managers and Supervisors)
Questions
Senior Manager 1:
What are the current statutory requirements for tax compliance?
Senior manager 2:
Which is the most suitable commercially available financial-management accounting software for Online Media Solutions Pty LTD.?
Supervisor 1:
What are the implications of probity in the preparation and revision of budgets?
What are the critical dates and initiatives that will require or generate resources for Online Media Solutions Pty LTD. in the next financial cycle?
Supervisor 2:
What other items do you think should be included in the budgets for the company?
What internal controls should be implemented to improve risk management for maintaining audit trials?
Template 2: Answer to the questions asked by the stakeholdersAnswer to the questions asked by the stakeholders (300-400 words)
Senior Manager 1:
What are the current statutory requirements for tax compliance?
Senior manager 2:
Which is the most suitable commercially available financial-management accounting software for Online Media Solutions Pty LTD.?
Supervisor 1:
What are the implications of probity in the preparation and revision of budgets?
What are the critical dates and initiatives that will require or generate resources for Online Media Solutions Pty LTD. in the next financial cycle?
Supervisor 2:
What other items do you think should be included in the budgets for the company?
What internal controls should be implemented to improve risk management for maintaining audit trials?
Performance Criteria/Performance Checklist: Activity 3
This task must address the following performance criteria/ performance checklist.
To be assessed as satisfactory (S) in this assessment task, the participant needs to demonstrate competency in the following critical aspects of evidence S N/S Trainer/Assessor to complete(Comment and feedback to students)
Keynotes included the following:
Major reasons for the previous profits and losses.
Assumptions made within the budget.
Notes to implement and monitor the budget expenditure on a regular basis.
Prepared and delivered the presentation. Included the following:
Overview of the following budgets:
Sales and profit budget
GST cash flow budget
Debtor ageing summary
Reporting requirements for each quarter.
Financial delegations of Senior managers, managers and supervisor for budget implementation.
Reasons for previous profit and loss for each quarter.
Addressed the concerns of the stakeholders present during the meeting.
The students performance was: Not satisfactory
Satisfactory
Feedback to student:
Student signature
Observer signature
Activity 4: Prepare budget variance report
Activity context:
After the end of the first quarter of the financial year, the General Manager of the company called up a meeting to discuss the analysis report provided to him by the accountant of the organisation.
This analysis report includes the outcomes of the actual budget analysis for the first quarter budget. The outcomes of the analysis report outcomes are not as expected. Following are some of the vital outcomes:
Sales are 3% less than budgeted.
Gross profits have been impacted as the expenses are the same, but sales have gone down.
The company had most part of their loan on variable interest rates. The interest rates have increased, and that has impacted the interest expenses. The interest expense for this quarter is increase by $4500.
To maintain the sales the stores had to further give discounts of 5% on each item. That has impacted the budget.
Other actual expenses were the same as allocated.
Total debtor sale decreased by 40,000.
2% of debtor balance will be overdue for 90 days, 6% overdue for 60 days and 13% for 30 days.
You had a discussion with the General Manager. You both have agreed that this is largely due to the following reasons:
The economy overall is in a recession that is impacting the sales in the retail sector.
The first quarter is generally impacted by the factors relating to public and school holidays.
The General Manager is also concerned about the outcomes of the audit trial conducted by one of the internal auditors. Some of the outcomes are as follow:
Cash record books not maintained properly.
Some of the times, the company books and third-party bank statements were not reconciled appropriately.
Description of the activity:
Considering the outcomes of the analysis report, the General Manager of the company wants you to prepare a budget variance report to manage risks that may occur in the organisation in case of misappropriation of the funds.
This is also to be done to maintain audit trails for accurate tracking and identification of discrepancies between agreed and actual allocations.
To do so, you are required to:
Prepare the actual budget based on the outcomes of the analysis report.
Compare the outcomes of the actual budget with the outcomes of the allocated budget (Outcomes of Activity 2).
Prepare budget variance report, GST Cash Flow Budget variance report and debtor ageing variance report in MS excel by following the structure of templates provided.
You must make sure that when conducting an audit trail, you comply with due diligence in reviewing financial statements.
Sales and Profit Budgets variance report:
PROFIT BUDGET Allocated Qtr. 1 Actual Qtr. 1
Revenue Sales Cost of Goods Sold Gross Profit Expenses Interest Expense Depreciation expenses Insurance expenses Advertising Cleaning, Repairs & Maintenance Cleaning and maintenance labour charge Rent Website marketing expenses Electricity Expense Fringe Benefits Tax Discount provided Wages & Salaries Superannuation Workers Compensation Total Expenses Net Profit (Before Tax) Income Tax Net Profit GST Cash Flow Budget variance report:
CASH FLOW ANALYSIS GST Allocated Qtr. 1 Actual Qtr. 1
GST Collected Less GST Paid GST Payable Aged Debtors variance report:
AGED DEBTORS BUDGET Allocated Qtr. 1 Actual Qtr. 1
Sales % Debtors Sales Total Debtors Current 30 Days 60 Days 90 Days Performance Criteria/Performance Checklist: Activity 4
This task must address the following performance criteria/ performance checklist.
To be assessed as satisfactory (S) in this assessment task, the participant needs to demonstrate competency in the following critical aspects of evidence S N/S Trainer/Assessor to complete(Comment and feedback to students)
Prepared the actual budget based on the outcomes of the analysis report. Compareed the outcomes of the actual budget with the outcomes of the allocated budget (Outcomes of Activity 2). Prepared budget variance report, GST Cash Flow Budget variance report and debtor ageing variance report in MS excel by following the structure of templates provided.
The students performance was: Not satisfactory
Satisfactory
Feedback to student:
Student signature
Observer signature
Activity 5: Prepare a report on the effectiveness of existing financial-management approaches
This activity is a continuation of Activity 4.
After preparing the budget variance report, the CEO of the organisation wants you to analyse and prepare a report on the effectiveness of existing financial-management approaches.
To do so, you are required to:
Analyse budget variance report, GST Cash Flow Budget variance report and debtor ageing variance report:
Identify the issues based on the information provided within the case study.
Present views on how these issues can be resolved.
Analyse the Sales and Profit Budgets variance report identify and prioritise the significant issues, including the financial performance.
Identify variances.
Provide reasons for the variance.
Document the steps that should be taken to maintain gross profit margins after increasing expenses and a downturn in the number of sales.
Conduct cash flow analysis to identify the debtor days. The analysis is to be conducted based on the information provided in Activity 2.
Check the financial viability of the company by comparing the performance of the company with the industry benchmarks for the retail trade sector.
Present recommendations about the financial viability for the organisation based on the analysis of the issues given in the case study, the identified reasons and the organisational performance.
Provide recommendation to manage such contingencies in the future.
Review the financial management process based on your assessment of the issues, reasons and organisational performance. Also, provide recommendations for improvement in improving financial management processes.
Identify and document some of the risks that the company can face in future based on the outcomes of the audit trial conducted. Also, identify the risk of misappropriation of funds and document a risk management approach.
Instructions for preparing the report:
The report must be prepared using Template 3.
Word-limit to complete the report is 800-1000 words.
The report must include the following:
Report on the effectiveness of existing financial-management approaches/finances
Issues
Steps to resolve these issuesVariances
Reason for variances
Steps to maintain gross profit margins
Debtor days
Financial viability of the company
Your recommendations on the viability of the company
Your recommendations for managing contingencies
Recommendations for improvement in improving financial management processes.
Risks that company can face in future based on the outcomes audit trial
Risk of misappropriation of funds
Risk management approach
Template 3: Report on the effectiveness of existing financial-management approaches/finances
Report on the effectiveness of existing financial-management approaches/finances (800-1000 words)
Introduction to the report
Background information
Objectives of writing the report
Body of the report:
Issues
Steps to resolve these issuesVariances
Reason for variances
Steps to maintain gross profit margins
Debtor days
Financial viability of the company
Your recommendations on the viability of the company
Your recommendations for managing contingencies
Recommendations for improvement in improving financial management processes.
Risks that company can face in future based on the outcomes audit trial
Risk of misappropriation of funds
Risk management approach
Summary of the report
Performance Criteria/Performance Checklist: Activity 5
This task must address the following performance criteria/ performance checklist.
To be assessed as satisfactory (S) in this assessment task, the participant needs to demonstrate competency in the following critical aspects of evidence S N/S Trainer/Assessor to complete(Comment and feedback to students)
Analysed budget variance report, GST Cash Flow Budget variance report and debtor ageing variance report:
Identified the issues based on the information provided within the case study.
Presented views on how these issues can be resolved.
Analysed the Sales and Profit Budgets variance report to identify and prioritise the significant issues, including the financial performance.
Identified variances.
Provided reasons for the variance.
Documented the steps that should be taken to maintain gross profit margins after increasing expenses and a downturn in the number of sales.
Conducted cash flow analysis to identify the debtor days. The analysis is to be conducted based on the information provided in Activity 2 Presented recommendations about the financial viability for the organisation based on the analysis of the issues given in the case study, the identified reasons and the organisational performance.
Provided recommendation to manage such contingencies in the future.
Reviewed the financial management process based on your assessment of the issues, reasons and organisational performance. Also, provide recommendations for improvement in improving financial management processes.
Identified and documented some of the risks that the company can face in the future based on the audit trial outcomes. Also, identify the risk of misappropriation of funds and document a risk management approach.
The students performance was: Not satisfactory
Satisfactory
Feedback to student:
Student signature
Observer signature
Assessment Results Sheet
Outcome First attempt:
Outcome (make sure to tick the correct checkbox):
Satisfactory (S) or Not Satisfactory (NS) Date: _______(day)/ _______(month)/ ____________(year)
Feedback:
Second attempt:
Outcome (make sure to tick the correct checkbox):
Satisfactory (S) or Not Satisfactory (NS) Date: _______(day)/ _______(month)/ ____________(year)
Feedback:
Student Declaration I declare that the answers I have provided are my own work. Where I have accessed information from other sources, I have provided references and or links to my sources.
I have kept a copy of all relevant notes and reference material that I used as part of my submission.
I have provided references for all sources where the information is not my own. I understand the consequences of falsifying documentation and plagiarism. I understand how the assessment is structured. I accept that the work I submit may be subject to verification to establish that it is my own.
I understand that if I disagree with the assessment outcome, I can appeal the assessment process, and either re-submit additional evidence undertake gap training and or have my submission re-assessed.
All appeal options have been explained to me.
Student Signature Date Trainer/Assessor Name Trainer/Assessor Declaration I hold:
Vocational competencies at least to the level being delivered
Current relevant industry skills
Current knowledge and skills in VET, and undertake Ongoing professional development in VET
I declare that I have conducted an assessment of this students submission. The assessment tasks were deemed current, sufficient, valid and reliable. I declare that I have conducted a fair, valid, reliable, and flexible assessment. I have provided feedback to the student.
Trainer/Assessor Signature Date Office Use Only The outcome of the assessment has been entered into the Student Management System
on _________________ (insert date)
by (insert Name) __________________________________
