Manage finances Assignment
Activity 1A -
Objective: To provide you with an opportunity to review and analyse previous financial data to establish areas which have generated a profit or loss.
1. Identify an area of business and explain how you could use different forms of current and present financial data to ascertain whether the department made a profit or a loss.
You do not have to use actual figures from your business.
Activity 1B -
Objective: To provide you with an opportunity to undertake research to review reasons for previous profit and loss.
1. Using your answer from the previous activity, explain how you would undertake research to review the reasons for the profit or loss.
Activity 1C -
Objective: To provide you with an opportunity to review business plan to establish critical dates and initiatives that will require or generate resources in the next financial cycle.
1. Using your business plan, identify your business' critical dates in terms of income and resource use and generation.
Activity 1D -
Objective: To provide you with an opportunity to analyse cash flow trends.
1. Explain how and why you would analyse your business' cash flow trends.
Activity 1E -
Objective: To provide you with an opportunity to review statutory requirements for compliance and liabilities for tax.
1. Which taxes are applied to your business? Discuss any three such taxes. Explain each one, including the rates and geographical variations, if applicable.
Activity 1F -
Objective: To provide you with an opportunity to review existing software and its suitability for financial management.
1. In reference to your current financial management software, give all of the pros and cons you can think of. Summarise whether you think the software is suitable for both your current needs and future needs.
Activity 2A -
Objective: To provide you with an opportunity to use previous financial data to determine allocations for resources.
1. Give an example of how you could use previous financial data to determine the allocation of resources. Explain the figures and how you would allocate resources accordingly.
Activity 2B -
Objective: To provide you with an opportunity to make informed estimates of new items for inclusion in budget.
1. Identify a new item you could add to the budget in your business. Estimate the costs of the new item and how it would be included within the budget.
You need to estimate both upfront and ongoing costs.
Activity 2C -
Objective: To provide you with an opportunity to prepare budgets in accordance with organisational requirements and statutory requirements.
1. Prepare a draft budget for your organisation keeping the organisational policies and requirements in mind.
Activity 3A -
Objective: To provide you with an opportunity to circulate budgets and ensure managers and supervisors are clear about budgets, reporting requirements and financial delegations.
1. Write a plan detailing how you would circulate newly-written budgets to managers and explain any additional information they need to know, such as reporting requirements and financial delegations.
Activity 3B -
Objective: To provide you with an opportunity to manage risks by checking there are no opportunities for misappropriation of funds and that systems are in place to properly record all financial transactions.
1. Identify five different ways staff could misappropriate company funds and suggest a resolution for each.
Activity 3C -
Objective: To provide you with an opportunity to review profit and loss statements, cash flows and ageing summaries.
1. Explain your organisation's use of ageing summaries, in terms of accounts payable and receivable, where applicable.
Activity 3D -
Objective: To provide you with an opportunity to revise budgets, as required, to deal with contingencies.
1. Give an example of a contingency that could occur at your workplace and explain how you would revise the budget to deal with it.
Activity 3E -
To provide you with an opportunity to maintain audit trails to ensure accurate tracking and to identify discrepancies between agreed and actual allocations.
1. Give an example of how you could use an audit trail to identify a discrepancy in budget allocations.
Activity 3F -
Objective: To provide you with an opportunity to ensure compliance with due diligence.
1. Identify three areas of compliance you could monitor in your workplace and explain how you would ensure so.
Activity 4A -
Objective: To provide you with an opportunity to ensure structure and format of reports are clear and conform to organisational and statutory requirements.
1. Identify a report used in your workplace and list all of your organisation's specifications here, including format and style.
Activity 4B -
Objective: To provide you with an opportunity to identify and prioritise significant issues in statements, including comparative financial performances for review and decision making.
1. How are significant issues in statements highlighted for priority attention in your workplace?
Activity 4C -
To provide you with an opportunity to prepare recommendations to ensure financial viability of the organisation.
1. Explain how you would use each of the following to determine the financial viability of the organisation:
- Cash flow
- Changes in business activity including markets, goods or services traded
- Consolidation
- Expenses and overheads
- Labour costs including decisions to move production to other locations or sites
- Loss
- Profit
- Write-offs.
Activity 4D -
Objective: To provide you with an opportunity to evaluate the effectiveness of financial management processes.
1. Outline here how you would evaluate the effectiveness of your organisation's financial management processes.
Skills and Knowledge Activity -
Objective: To provide you with an opportunity to demonstrate your knowledge of the foundation skills, knowledge evidence and performance evidence.
Complete the following individually and attach your completed work to your workbook.
The answers to the following questions will enable you to demonstrate your knowledge of:
- Plan for financial management
- Read and review profit and loss statements, cash flows and aging summaries
- Prepare, implement and revise a budget which aligns with the business plan, is based on research and analysis of previous financial data and cash flow trends, and meets all compliance requirements
- Contribute to financial bids and estimates
- Establish a budget and allocate funds in accordance with statutory and organisational requirements
- Communicate with other people
- Analyse the effectiveness of existing financial management approaches including reviewing financial management software, managing risks of misappropriation of funds, ensuring systems are in place to record all transactions, maintaining an audit trail and complying with due diligence Reading skills
- Writing skills
- Oral communication skills
- Numeracy skills
- Navigate the world of work
- Interact with others
- Get the work done
- Identify the requirements for financial probity
- Describe the principles of accounting and financial systems
- Explain Australian, international and local legislation and conventions that are relevant to financial management in the organisation
- Outline the requirements of the Australian Tax Office, including Goods and Services Tax, Company Tax, Pay As You Go.
Answer each question in as much detail as possible, considering your organisational requirements for each one.
1. You have just been taken on in the financial management department of your organisation. You have been told that you need to:
- Plan for financial management
- Establish budgets and allocate funds
- Implement budgets
- Report on finances
Over the next financial year.
For this activity you will have to document your work in your department, demonstrating all of the skills and knowledge listed above.
Firstly, you will have to plan for financial management. Explain how you did this, including:
- Reviewing previous financial data
- Looking into areas of profit and loss
- Identifying important business dates
- Analysing cash flow trends
- Understanding different tax liabilities
- Deciding if the current financial management software is still suitable.
Next, you will have to establish and implement budgets for the financial year.
Explain how you did this, including:
- Examining previous data
- Estimating new areas of the budget
- Preparing the budget in line with your organisation's policies and protocols
- Distributing budget information to managers and staff
- Removing and minimising opportunities for the misappropriation of funds
- Working with ageing summaries
- Revising budgets in the case of contingencies
- Maintaining audit trails
- Ensuring compliance of self and others.
At the end of the year, you have to report on the business' finances. Explain how you did this, including:
- Writing the report in formats and styles approved and required by the organisation
- Highlighting important issues
- Advise on the financial viability of the organisation
- Evaluate the effectiveness of the financial management process used.
Major Activity -
Objective: To provide you with an opportunity to demonstrate your knowledge of the entire unit.
This is a major activity - your instructor will let you know whether you will complete it during class or in your own time.
Attach your completed answers to the workbook.
You must individually, answer the following questions in full to show your competency of each element:
1. Plan for financial management
2. Establish budgets and allocate funds
3. Implement budgets
4. Report on finances
1. Why is examining previous financial data important for managing current and future finances?
2. Why might you need to understand the reasons for profit and loss?
3. Why should you identify your business' or industries critical dates?
4. Why might you need to analyse cash flow trends?
5. Why do you need to be aware of your tax liabilities?
6. Why is it important to ensure that your financial management software is suitable for your business?
7. Why do you need to consider previous financial data when managing resource allocation?
8. Why do you need to estimate the costs of potential new items?
9. Why do you need to prepare budgets in line with organisational policies?
10. Why do managers need to be clear about the budget?
11. What could happen if you took no steps to prevent misappropriation of funds?
12. Why are ageing summaries useful?
13. Why might you have to revise budgets in the case of contingencies?
14. How can an audit trail help you identify discrepancies?
15. Why do you need to be diligent when ensuring compliance?
16. Why might your organisation make specifications about report formatting?
17. Why do you need to draw attention to significant issues in reports?
18. Why do you need to monitor the financial viability of the organisation?
19. Why do you need to review the effectiveness of your financial management processes?