Done BSBFIM501 - Assessment Tasks Workbook

ASSESSMENT SUMMARY / COVER SHEET
This form is to be completed by the assessor and used as a final record of student competency.
All student submissions including any associated checklists are to be attached to this cover sheet before
placing on the students file.
Student results are not to be entered onto the Student Management Database unless all relevant
paperwork is completed and attached to this form.
Student Name:
Student ID No: Completion Date:
Unit Code: BSBFIM501
Unit Title: Manage budgets and financial plans
Result Reassessment
Please attach the following documentation to this form S = Satisfactory
NS = Not Satisfactory
S = Satisfactory
NS = Not Satisfactory
NA = Not Assessed NA = Not Assessed
 Plan financial
Assessment Task 1 S | NS | NA S | NS | NA
management approaches
 Implement financial
management approaches
 Monitor and control

finances
Final Assessment Result for this unit C / NYC
Assessor Comments and Feedback to student:

__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Student Declaration:I declare that this assessment is my own Assessor Declaration:I declare that I have conducted a fair,
work based on personal study and research and not plagiarised or valid, reliable and flexible assessment with this student. I have
copied from another student’s work or source. provided appropriate feedback and advised the student of their result.
I am also aware of my appeal rights.
Name: ____________________________ Name: ____________________________

Signature: ____________________________ Signature: ____________________________
Date: ____/_____/_____ Date: ____/_____/_____
Administrative use only
Entered onto Student Management Database ________________

Date Initials
Choice Business College Page 1 of 42

RTO 41297 | CRICOS 03444C
August 2018 version: 3.0
Assessment Task 1 BSBFIM501 Manage budgets and financial plans
Plan financial management approaches

Submission details
The assessment task is due on the date specified by your assessor. Any variations to this
arrangement must be approved in writing by your assessor.
Submit this document with any required evidence attached. See specifications below
for details.
Performance objective
The candidate will demonstrate the ability to plan financial management approaches.
Assessment description
In response to the scenario provided, you will clarify budget plans with your manager and
negotiate changes to the budget. You will then identify and analyse a risk to the budget
and prepare a contingency plan to prevent or minimise the risk.
Procedure
1. Read the scenario provided in Appendix 1 to this assessment task and tasks A
and B.
2. Prepare to meet with your manager (assessor) to clarify budget and negotiate
changes:
a. identify areas of the budget that are not achievable, inaccurate or unclear
b. prepare to negotiate necessary changes to the budget
3. set up a time with your manager to meet. Meet with your manager (assessor) to
clarify budget and negotiate changes:
a. identify at least two issues for clarification
b. negotiate at least two changes
c. include discussion of basic accounting principles
d. refer to relevant legislation and ATO requirements
e. refer to principles and techniques of managing budget items
f. take and keep notes of agreed changes.
4. Use the template provided in Appendix 3 to this assessment task to prepare a
contingency plan document for persistent risks after budget changes
5. Submit all documents required in the specifications below to your assessor. Ensure
you keep a copy of all work submitted for your records.
Dec 2017 version: 2.0
Specifications
You must:
● meet with your assessor to clarify budget and negotiate changes
● provide a contingency plan
● submit your notes.
Your assessor will be looking for:

● numeracy skills to read and understand a budget and negotiate budget re-
allocations
● knowledge of basic accounting principles to identify and use account balances
● knowledge organisational requirements related to financial management such as

contained in organisational policies and procedures
● knowledge of principles and techniques involved in budgeting.
Appendix 1 –Scenario
Big Red Bicycle Pty Ltd is a bicycle manufacturer based in Bendigo, Victoria. The company
produces bicycles which it sells to retailers in the domestic Australian market.
The senior management structure of the company appears below.
Person Position
Michelle Yeo Chief Executive Officer (CEO)
Tom Copeland Managing Director
John Black Chief Financial Officer (CFO)
Stuart LaRoux Operations General Manager
Pat Roberts Senior Accountant
Sam Gellar Sales General Manager
Charles Pierce Production Manager
Holly Burke HR Manager
According to company strategic plans, the company aims to achieve a net profit before tax
of $1,000,000. The chief risks to this goal are:
● poor sales due to economic downturn
● increases in expenses such as wage expenses.

In addition to Australian operations, the company is considering manufacturing overseas

to take advantage of reduced costs. The company is also considering diversifying its
product range to reduce exposure to poor sales of one product.
Role
You are the manager of Sales Centre A, based in Adelaide. The centre has achieved great
success over the last year and consistently outsells other sales centres. In fact, due to the
large number of accounts managed by your sales team and larger staff, your centre is
expected to sell as much volume as the other two sales centres put together. Naturally,
you expect cost allocations to reflect the both the needs and importance to the business
of Cost Centre A.
Task A
The Sales General Manager, Sam Gellar, has asked you to review the master budget and
cost centre budgets prepared by the Senior Accountant. She would like you to meet with
her to discuss the whether the budget projections are achievable, accurate,
understandable and fair.
She would like you to look closely at the budget for your cost centre, note any changes
you think are necessary, develop an argument for the changes and negotiate those
changes with her.
Information you are aware of includes:
● Sales in the first quarter (Q1), third quarter (Q3), and the fourth quarter (Q4) are
generally 30% less than the second quarter (Q2).
● Sales in Q2 depend on completion of 90% of repair and maintenance.
● Sales for Q2 have been estimated to be $1,000,000.
● Commission negotiated with members of the sales team is now at 2.5%.
Task B
It has come to the attention of the Managing Director, Tom Copeland, that due to the
current economic climate, sales volume may be 20% below target this financial year. Tom
is worried that this may severely impact profit projections. The company can accept as
much as a 10% variance in profit projections; however, more than this could severely
affect the company’s ability to pay obligations and invest. Reliable data to determine
whether the risk has eventuated should be available by mid Q2, when sales data for the
company’s product are in.
As a special project, the Managing Director has asked you to perform a risk assessment
and develop a contingency plan to manage the risk of sales falling 20%.
As per organisational policy you should use the contingency plan template provided.

Appendix 2 – Budgeting and finance policy
Budget preparations
● The business plan will set the key parameters for all financial budgeting.
● Variations to the business plan must be approved by the CEO and senior
management strategic committee.
● Prior period results are to be analysed to identify the profit level of cost centres,
identify correlations between financial statistics and to set key performance
indicators and benchmarks for future budgets.
● The budget planning committee will meet prior to budgets being developed and
agree on budget parameters. The committee will consist of all department
managers plus the CEO and CFO.
● A CAPEX budget will be developed from the approved business plan.
● A detailed sales budget must be completed before completing the profit budget for
the year.
● A cashflow budget covering the first three months will be prepared after the profit
budget is completed.
● A master budget including profit projections will be completed from which cost
centre allocations will be made.
● Budget notes that contain all the assumptions used in the budgets should
accompany the master budget or be made available as a separate document.
Where possible, the notes should justify the basis on which the estimates were
made.
● Overheads (non-direct expenses) will be apportioned across the cost centres
equally. Exceptions need to be negotiated with relevant authorities.
● All expenses and income will be spread equally throughout the year unless
otherwise required by business needs or business environment.
● The financial cycle for budgeting purposes will be yearly ending 30 June.
Financial delegations
● Each manager is responsible for achieving the revenue budgets agreed to by the
budget committee.
● Each manager is responsible to approve, by signing the necessary paperwork, all
expenditures that fall within their area of responsibility.
● Expenditures must be within the budget guidelines for the individual departments.
Format for budgets and reports

All budgets must include the following details:
● name of the person who prepared it
● cost centre (if applicable)
● name of the budget/report, i.e. sales, expenses, CAPEX, cash flow, budget variation
report
● period of the budget.

Appendix 3 – Budgets and templates
Master budget with profit projections

Big Red Bicycle Pty Ltd
Master Budget FY 2011/2012
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 3,000,000 750,000 750,000 750,000 750,000
Cost of Goods Sold 400,000 100,000 100,000 100,000 100,000
Gross Profit 2,340,000 585,000 585,000 585,000 585,000
EXPENSES
General & Administrative Expenses
Accounting fees 20,000 5,000 5,000 5,000 5,000
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 &printing 400 100 100 100 100
Dues & subscriptions 500 125 125 125 125
Telephone 10,000 2,500 2,500 2,500 2,500
Repairs & 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 200,000 50,000 50,000 50,000 50,000
Employment Expenses
Superannuation 45,000 11,250 11,250 11,250 11,250
Wages &salaries 500,000 125,000 125,000 125,000 125,000
Staff amenities 20,000 5,000 5,000 5,000 5,000
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 1,401,500 350,375 350,375 350,375 350,375
NET PROFIT (BEFORE INTEREST & 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

Sales cost 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
Contingency plan template
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

Your answers for task 1:
BSBFIM501 Manage budgets and financial plans
Answers for task 1:
Assessment Task 1: Financial Management approaches
Task A
Meeting with manager
Dear Sam Gellar
As asked by you I reviewed the master budget of the company for the year ending 30
June 2012 and cost centre budgets prepared by senior accountant in accordance with
the budget preparation policies of the company. During the review I identified some
areas which are unclear, inaccurate and not achievable. I want to discuss the following
issues:
Issues for clarification:-
1. The budget preparation policies of the company require the cost allocation equally to
all cost centres but they also allow exception after negotiations with authorities and
approval of CEO. In the cost centre budget the expenses have been allocated equally
but the sales at cost centre A are generally more than the total sales of other two sales
centres. According to the fundamental accounting principle of prudence the cost
allocation shall be made on a fair basis for the cost centres according to their sales.
2. It is estimated that the sales of Q2 are likely to be $1,000,000 whereas the sales of
remaining three quarters are generally 30% less than the sales in Q2. As per the ATO
legislation and accounting principles, the accounting shall be done on the accural basis
i.e. accounting transactions should be recorded in the accounting periods when they
actually occur, rather than in the periods when there are cash flows associated with
them. This is the foundation of the accrual basis of accounting. It is important for the
construction of financial statements that show what actually happened in an accounting
period, rather than being artificially delayed or accelerated by the associated cash flows.
And therefore the projected sales for each quarter shall be allocated accordingly. The
sales in the master budget have been allocated equally to all the four quarters.
3. The commission on sales is negotiated with the sales team members to be 2/5 =5 of
sales but the commission in the master budget are included @2% of sales.
4. The format of presentation of elements of gross profit is not proper.

Changes required to be negotiated
In accordance with the above mentioned issues and for the compliance of accounting
policies and legislative requirements he following changes are required to made in the
master budget and cost centre budget prepared by the senior accountant:
1. The expenses to the cost centre A, B and C shall be apportioned in the ratio of 2:1:1
rather than allocating equally.
2. The projected sales of Q2 shall be $1,000,000 and the remaining sales of 2,000,000
shall be allocated equally to Q1, Q3 and Q4.
3. The commission on sales shall be provided @2.5%.
4. The presentation of items shall be properly made for calculation of gross profit.
Revenues shall be presented at beginning from which cost of goods sold commission
and direct expenses shall be deducted to arrive at the gross profit.
If you agree with the above changes required to be made in the budgets the proposal
could be made to the CEO for approval.
Task B
Contingency Plan
Name: Tom Copeland Position: Managing Director
Risk identified:
● Sales volume is likely to be 20% less than the target for the financial year
● 10% variation in projected profit for the year
● Adverse effect on liquidity resulting in difficulty to pay obligations and invest

in the business operations
By the Operations
end of Q1 general
Effective marketing and advertising to increase manager/
the product demand Marketing

Manager
Customise the products in accordance with At the Production

customer needs and requirements to increase beginning Manager
sales volume through increased customer base of
productio
n
processe
s
By the Production
end of Q1 Manager/H
Increase in productivity of workers to reduce R Manager
wage expenses and increase the profits
At the Operations
beginning General
Effective management of working capital to of Q1 Manager/
manage funds within the business operations and Finance
pay short term obligations. manager
By the Senior
end of 1 Accountant/
Develop effective financial management plan on month Finance
the basis of cash budget to make arrangements Manager/
for procurement of funds for business. CFO
Notes:-
 Effective marketing
 Customization of products
 Increase in productivity
 Effective management
 Budgeting


Facilitator Guide BSBFIM501 _Marking Guide_Task 1
Marking Guide
Assessment Task 1: Plan financial management approaches
Candidate’s name Phone no.
Assessor’s name Phone no.
Assessment site
Assessment date/s Time/s
Outcomes
Satisfactory
Did the candidate: Yes No
Meet to clarify budget and negotiate changes?
Submit a contingency plan?
Submit notes?
Complete assessment within agreed deadline?
Choice Business College

RTO 41297 | CRICOS 03444C Page 12 of 42
Performance indicators
Satisfactory
Clarify budget/financial plans with relevant personnel within the

organisation to ensure that documented outcomes are achievable,
accurate and comprehensible?
Candidate should discuss at least two of the following:
● discrepancy between profit company profit goals and budget
projections (income and expenditure)
● discrepancy between commissions negotiated and in budget
● sales spread too evenly over the year to be accurate
● budget for repairs and maintenance not realistic
considering need.
Discussions are in line with basic accounting principles.

Discussions refer to techniques, such as profit and loss statements.
Describe basic accounting principles?

For example:
● while discussion budget projections
● while coaching in role-play.
Refer to relevant legislation and ATO requirements, such as Business

Activity Statements (BAS)?
Identify and explain the relevant legislation and current requirements

of the ATO, including GST?
For example:
● in discussion with assessor
● while coaching in role-play.
Explain the key requirements for financial recordkeeping and auditing?
Describe the principles and techniques involved in managing:

budgeting, cash flows, electronic spreadsheets, GST, ledgers and
financial statements, profit and loss statements?

Satisfactory
Negotiate any changes required to be made to budget/financial plans

with relevant personnel within the organisation?
Candidate should negotiate at least two of the following:
● more commission allotted to Sales Centre A
● more wages allotted to Sales Centre A
● more telephone expense, etc. allotted to Sales Centre A.
Prepare contingency plans in the event that initial plans need to

be varied?
Candidate should develop contingency plan with at least two of the
following:
● restructuring or renegotiating wages
● diversification of product range
● exploring overseas options for manufacturing and new markets
unaffected by domestic downturn
● increasing sales through marketing
● reducing wastage
● seeking funding to finance investment put at risk by poor profits.
Contingency plan should include completion of tasks required for

implementation by Q2.
Contingency plan should include person accountable.

Comments/feedback to candidate
Outcome: Successful Unsuccessful
Assessor name:
Assessor signature:

Implement financial management approaches

Submission details
Submit this document with any required evidence attached. See specifications below
for details.
The candidate will demonstrate the ability to implement financial management approaches.
In response to the scenario provided, you will access and communicate details of budget to a team
member (assessor). You will then support the team member to perform their required role with
respect to software resources and systems.
This assessment adds to the assessment one and introduces the use of spread sheets and excel.
Procedure
1. Read the scenario provided in Appendix 1 to this assessment task and tasks A
and B.
2. Prepare to meet with your team member(assessor) to communicate budget and then coach
and train them in new role:
a. access required budget information from assessor
b. determine organisational needs. Consider describing how a budget is used to monitor
work performance, variation and team/division outputs.
c. identify coaching/training needs of team member.
d. plan coaching/training session:
i. outcome: team member produces spreadsheet to meet management
requirements. Consider why organisations need accurate and timely financial
information.
ii. include activities/elements to instruct, practice, test, motivation techniques to
help aid the team understand the importance of change and new measurement
for the budget.

iii. keep notes of your conversation with your assessor and write a summary of them
on one page.
e. Set up a time with your team member to have a coaching/training session.
3. Meet with your team member (assessor) to coach them in role:
a. Explain budget and relevance to team member’s accountabilities
b. Use appropriate coaching techniques or models such as GROW
c. Use appropriate motivational theory
d. Train learner in required spreadsheet techniques, include elements of instruction,
practice and testing/feedback
e. Include recordkeeping requirements for Australian Taxation Office (ATO) and auditing
purposes, for items such as petty cash, and GST.
4. Submit all documents required in the specifications below to your assessor. Ensure you keep a
copy of all work submitted for your records.
Specifications
You must:
● meet with your assessor to role-play support of team memberapprox tens
● submit coaching/training plan for the team of the organisation.

● numeracy skills to read and understand a budget and to communicate a budget
● technology skills to use software associated with financial recordkeeping
● knowledge of basic accounting principles to identify and use account balances in

communication and training
● knowledge of organisational requirements related to financial management, such as those
contained in organisational policies and procedures
● requirements for organisational recordkeeping and auditing with respect to petty cash
● knowledge of principles and techniques involved in budgeting and electronic spreadsheets.
Appendix 1 – Scenario
Big Red Bicycle Pty Ltd is a bicycle manufacturer based in Bendigo, Victoria. The company produces
bicycles which it sells to retailers for on-sale in the domestic Australian market.
The senior management structure of the company appears below:

Person Position
According to company strategic plans, the company aims to achieve a net profit before tax of
$1,000,000. The chief risks to this goal are:
In addition to Australian operations, the company is considering manufacturing overseas to take

advantage of reduced costs. The company is also considering diversifying its product range to reduce
exposure to poor sales of one product.
Role
You are the manager of Sales Team A. You manage a small team of sales team members. Your
duties include accessing budget information for your team, explaining relevant aspects of budgets
and features of budget documents to your team, and supporting team members to achieve
performance goals.
Task A
You have determined that you will need to access budget information from the Senior Accountant to
explain to your team. You will explain the overall financial objective of the business, provide an
overview of the budget and explain how the budget translates to expense allocations for the team.
Task B
You have determined that one team member, Bill Goodale, will be responsible for tracking expenses
and petty cash throughout the financial year. To meet organisational needs, this duty will need to be
performed in accordance with policies and procedures.

You have determined that expenses will need to be divided equally and tracked by quarter. Bill will
need to develop a spreadsheet to keep track of actual expenditure by account. To help control
expenses, the spreadsheet will need to provide an ongoing tally of expense by account.
Bill’s skills include basic accounting. Bill needs to be informed of Big Red Bicycle policies and
procedures for petty cash. Bill is familiar with Microsoft Excel but does not know how to use formula
and functions to sum columns or rows of figures.
Consider part of this process is the way organisations maintain business records.
Think about computer based systems like excel that can be used effectively instead of the manual
system
The spreadsheet used is important and what sort of training is required to help the team members
as if not used correctly there may be underlying errors that affect the accuracy of the accounts.
Think why organisations need correct and timely information.

Appendix 2 – Financial policies and procedures
Expense reimbursement
Purpose of the policy
To detail procedures to be followed in relation to expense reimbursement of expenses that have
been incurred on behalf of the organisation.
The policy
Big Red Bicycle will reimburse staff for reasonable and authorised expenses that have been incurred
by them on behalf of the organisation or in the course of conducting Big Red Bicycle business.
Procedure
1. Staff will not be reimbursed in the following circumstances:
a. any late payment penalties, e.g. overdue interest on credit cards
b. expenses that are usually recovered from a third party
c. penalties and fines, e.g. parking, traffic
d. those claims that should have been made using the purchase order system
e. those expense claims made by staff as a tax deduction
f. those expenses that were not made for business purposes.
2. Travel expenses claims:
a. insurance for trip cancellation will be reimbursed
b. mileage allowance will be given for the use of a staff member’s vehicle when used for
work-related travel
c. personal stopovers or indirect routes will not be reimbursed
d. travel reimbursement is provided for the most direct and economical mode of travel
available; circumstances will be considered on a ‘case-by-case’ basis.
3. Accommodation expenses:
a. reimbursement will cover moderate accommodation expenses; circumstances will be
considered on a ‘case-by-case’ basis
b. items of a personal nature that are charged to a hotel account will not be reimbursed.

4. Employee’s own meals:

a. employees on Big Red Bicycle business will be reimbursed for any reasonable and
appropriate meal expenses.
5. All relevant and original source documents must be attached to the Expense Reimbursement
Form. A statutory declaration may be required where these original documents are not
provided.
6. Appropriate advance payments may be authorised.
7. Employees have authority to approve expenses up to the amount detailed in their individual
job description. Any expenditure claims above the level prescribed must be forwarded to
supervisors for approval.
8. Employees incurring authorised expenditure must submit their reimbursement requests on a
signed Expense Reimbursement Form.
9. Source documents (including tickets, receipts, vouchers, invoices) must be kept for all
purchases and expenses claims.
10. The CFO will use discretion to reimburse reasonable but unauthorised expenses.
11. Those claims that have not been adequately prepared, have not been duly authorised, or are
lacking in original documentation, will be returned to the employee with reasons that outline
why the claim has not been processed.
Petty cash
Purpose of the policy
To detail procedures to be followed in relation to tracking petty cash expenditure.
The policy
Big Red Bicycle maintains a petty cash system to allow authorised personnel to pay for small
expenditures in connection with business activity.
Procedure
1. One team member is authorised to disburse petty cash with one alternate in case of sickness
or emergency.
2. Petty cash is to be kept secure, locked in safe.
3. Receipts for cash must be issued.
4. Receipts must be reconciled at the close of each business day.
5. Amounts over $800 must be banked.
6. Petty cash expense will be recorded as miscellaneous expense.

Your answers for task2
Answersfor task 2:
Assessment Task 2: Implement financial management approaches
Task A
Explanation of budget information
The budget is being prepared for the company in accordance with the business plan
which relates to establishing major parameters for all the financial requirements (Kung
et al, 2013). The benchmarks for the budgets will be determined on the basis of
comparison of results of previous periods with current profit level of cost centres and
using financial statistics to identify the correlations.
Functional objectives of business – The functional objectives of the budget will

include preparation of CAPEX budget on the basis of strategic plan of business. His
sales budget will be prepared before the profit budget. After the profit budget is
prepared the cash flow budget will be prepared for the first three months. After this the
master budget will be prepared including the projection of profit and on this basis the
allocation of expenses to the cost centres will be made. The overheads are to be
apportioned equally unless exceptions are negotiated and approved. The expenses and
incomes are divided equally unless the business situations require otherwise. The
financial cycle will be one year which ends on 30 June.
Budget overview – The budget is prepared for the financial year ending 30 June 2012
and the bifurcation of incomes and expenses has been for all the four quarters equally.
The expenses are classified as general and administration expenses, marketing
expenses, employment expenses and occupancy costs. The sakes cost centre expense
budget has also been prepared which includes bifurcation of commission, wages, and
telephone and office supplies equally to all the cost centres (Ferry et al, 2014).
Expenses allocation
Expense reimbursement policy – This policy relates to reimbursement of expenses

which are reasonable and authorised for conducting the Red Cycle business incurred by
employees, The expenses for which staff will not be reimbursed are specifically
provided. The details of clams to be made for travel expenses, accommodation
expenses and employee’s own meals have also been provided. A signed Expense
Reimbursement Form has to be submitted with the relevant documents attached.
Petty Cash Policy – This policy relates to procedures for tracking the petty cash
expenses under which the authorisedbusiness persons could make small business
payments. The disbursement of petty cash is made by one team member with one
alternate for emergency. The cash is locked in safe and secured. All the receipts are
issued for cash and are reconciled at the end of the day. The amounts of cash receipts
exceeding 800 are deposited into bank. The expenses are recorded as miscellaneous
expenses.

Your answers for task2
Task B
Training needs
Bill Good ale who is one of the team members is required to keep tracking of petty cash
and expenses throughout the financial year. In order to keep the track record of actual
expenditure incurred for different accounts he will help to develop the spread sheet. Bill
possesses good accounting skills but he needs to learn about the policies and
procedures of company for petty cash. Apart from this he will also be required to learn
how to use formulas ad functions in Microsoft Excel.
Procedures to be followed
In order to update and improve his skills Bill shall adopt the GROW model of training.
This model includes four components which are as follows:
1. Goal
2. Current Reality
3. Options or obstacles
4. Will or way forward
The goals to be achieved shall be determined first which include learning the formulas
and functions in excel and understand organizational policies of expense
reimbursement and tracking of petty cash. After this the goals are to be compared with
the current situation of reality. The options shall be explored to achieve the goals and at
last stage the ways shall be adopted to learn the processes (Pascanu et al, 2013).
Spread sheet techniques
The spread sheet techniques will include the formulas of calculating sum of many
columns or rows, using variance function and statistical functions to calculate the
deviations of petty cash expenses and tracking actual expenses by each account.
Record keeping requirements
The organizational policies require keeping records for all the budget variation and
deviations of expenses reimbursements with the actual expenses. The tracking of petty
cash shall be recorded properly and regularly. Bill will have to maintain proper records
of petty cash in the petty cash register. The documents required by ATO and for GST
compliance will have to be kept with tax returns.

Facilitator Guide BSBFIM
Marking Guide
Assessment Task 2: Implement financial management
approaches
Assessment site
Outcomes
Satisfactory
Role-play support of team member?
Submit copy of coaching/training plan?
Satisfactory
Access budget/financial plans for the work team?

Candidate must:
● access budget spreadsheet from assessor.
Disseminate relevant details of the agreed budget/financial plans to

team members?
Candidate must:
explain budget and explain relevance to team member’s (assessor’s)
accountabilities.

Satisfactory
Provide support to ensure that team members can competently

perform required roles associated with the management of finances?
Candidate must:
● develop a plan for explaining petty cash duties to team member
and training team member to develop an appropriate
spreadsheet to track expense; plan should contain activities to
motivate team member
● deliver coaching/training to team member:
○ training must include elements of instruction, practise

and feedback
○ coaching should be positive and motivational
○ coaching should be collaborative (candidate should allow
input from learner)
● explain budgeting elements and activities
● explain modifications to a financial contingency plan
● demonstrate how to monitor expenditure and control costs
● describe basic accounting principles, ATO legislation and GST
● explain key requirements of financial recordkeeping
describe principles and techniques of managing a budget and

electronic spreadsheet.
Determine and access resources and systems to manage financial

management processes within the work team?
Candidate must:
● set and communicate accountabilities
assist team member to develop spreadsheet to meet management

requirements
(see BSBFIM501_AT2_Budget_for_Team_sample for
possible outcome).

Assessor name:
Assessor signature:

Monitor and control finances

Submission details
Submit this document with any required evidence attached. See specifications below for details.
The candidate will demonstrate the ability to monitor and control finances.
In response to the scenario provided, you will create a simple spreadsheet budget to capture
monitoring information. Using information provided to you by your assessor, you will then use the
budget spreadsheet to produce a report on expenditure in accordance with organisational policies
and procedures. You will also modify a contingency plan.
Procedure
1. Read through the scenario provided in Appendix 1 to this assessment task and tasks A and B.
2. Design and develop a spreadsheet to capture budgeted and actual figures to produce a
variance report.
3. Access actual budget figures from relevant managers and accounting systems (assessor).
4. Monitor and record actual figures.
5. Consider feedback from team members.
6. Produce a variance report as per organisational requirements.
7. Consider the scenario information and contingency plan provided and analyse the variance
report.
8. Modify the contingency and implementation plans provided in the scenario to improve
effectiveness.
9. Submit all documents required in the specifications below to your assessor. Ensure you keep a
copy of all work submitted for your records.

Specifications
You must provide:
● a budget variance report
● a modified contingency plan and modified implementation plan
● your notes on procedures.

● numeracy skills to read and understand a budget and to produce a variance report
● technology skills to use software associated with financial recordkeeping
● knowledge of basic accounting principles to identify and use account balances
● knowledge of organisational requirements related to financial management
● knowledge of organisational requirements for records and reports
● knowledge of principles and techniques involved in budgeting, profit and loss statements,
electronic spreadsheets.
Appendix 1 – Scenario
Big Red Bicycle Pty Ltd is a bicycle manufacturer based in Bendigo, Victoria. The company produces
bicycles which it sells to retailers in the domestic Australian market.
The senior management structure of the company appears below.
Person Position

According to company strategic plans, the company aims to achieve a net profit before tax of
$1,000,000. The chief risks to this goal are:
In addition to Australian operations, the company is considering manufacturing overseas to take

advantage of reduced costs. The company is also considering diversifying its product range to reduce
exposure to poor sales of one product.
Role
You are the Senior Accountant at Big Red Bicycle. A major component of your role is setting budgets
and monitoring budgetary performance for the organisation.
Task A
The Managing Director, Tom Copeland, has asked you to implement a process to monitor
expenditure and income. He has asked you to prepare a spreadsheet to capture and compare actual
income and expenditure to budgeted figures. Your spreadsheet must contain columns for each of
the four quarters of the financial year. You are required to gather data from the relevant managers
(your assessor) to complete a budget variance report.
The report should conform to organisational requirements in policies and procedures
and contain:
● columns to show actual account values
● absolute variance
● percentage variance.
Task B
It has come to the attention of the Managing Director, Tom Copeland, that due to the current
economic climate, sales volume may be 20% below target this financial year. Tom is worried that this
may severely impact profit projections. The company can accept as much as a 10% variance in profit
projections; however, more than this could severely affect the company’s ability to pay obligations
and invest. Reliable data to determine whether the risk has eventuated should be available by
midway through the second quarter (Q2), when sales data for the company’s product are in.
Consider the contingency plan and the implementation plan for the contingency below. You have
already implemented a portion of the contingency plan, namely the monitoring of budget
performance in the variance report you have prepared. You should now analyse the report to
determine the effectiveness of the contingency plan and its implementation.
You have received the following feedback from team members:
● Full-time workers and sales people are resentful of time wasting and distracting contract
employees.
● Overtime not used but employees resentful of suggestion it might not be approved if needed.

● Training suited the needs of many sales team members but was not relevant to about half the
team members.
● Sales team members were happy with the incentives program and tried hard to make sales in
the third quarter (Q3); however, they were also resentful at the threatening tone of emails and
soon lost enthusiasm.
● Effect of one-day training wearing off.
● Fifty percent of direct wages costs are attributable to short-term contract employees whose
contracts have expired and who are no longer needed.
● Employees concerned about lack of attention paid to wastage: water; electricity: paper; raw
materials.
● Employees feel left out of budgetary decision-making in general.
The Managing Director would like you to submit a revised contingency plan and contingency
implementation plan to bring income and expenses under more effective control.

Contingency plan for Task B
Contingency Plan
Name:Tom Copeland Position: Managing Director
Risk identified: Profit for FY more than 10% less than budgeted
Produce quarterly variance reports to identify income/ Q2 PR

expenditure and profit shortfalls over 10%.
Implement sales training/coaching. Q2 PR
Implement incentives program. Q2 PR
Reduce overtime. Q2 PR
Contingency implementation plan for Task B
Activity Monitoring activity and date Person/s
Monitor variance. Completion of variance PR

report: Q2.
Analysis of report to identify issues. Management report: Q2. PR
Email to warn employees of risk to jobs. Monitoring of variance report PR

results: Q4.
Email to announce rise of commission from Monitoring of variance report PR

2% to 2.5%. results: Q3.
Email to inform employees that overtime Monitoring of variance report PR

will no longer be approved. results: Q3.
Email to inform employees of mandatory Monitoring of variance report PR

sales skills training: set program. results: Q3.
Mandatory training conducted. Monitoring of variance report PR

results: Q3.
Appendix 2 – Budgeting and finance policy
Budget preparations
● The business plan will set the key parameters for all financial budgeting.
● Variations to the business plan must be approved by the CEO and senior management
strategic committee.
● Prior period results are to be analysed to identify the profit level of cost centres, identify
correlations between financial statistics and to set key performance indicators and
benchmarks for future budgets.
● The budget planning committee will meet prior to budgets being developed and agree on
budget parameters. The committee will consist of all department managers plus the CEO and
Chief Financial Officer.
● A CAPEX budget will be developed from the approved business plan.
● A detailed sales budget must be completed before completing the profit budget for the year.
● A cash-flow budget covering the first three months will be prepared after the profit budget is
completed.
● A master budget including profit projections will be completed from which cost centre
allocations will be made.
● Budget notes that contain all the assumptions used in the budgets should accompany the
master budget or be made available on a separate document. Where possible, the notes
should justify the basis on which the estimates were made.
● Overheads (non-direct expenses) will be apportioned across the cost centres equally.
Exceptions need to be negotiated with relevant authorities.
● All expenses and income will be spread equally throughout the year unless otherwise required
by business needs or business environment.
● The financial cycle for budgeting purposes will be yearly ending 30 June.
Reporting requirements
Software applications to be used in reporting:
● Environment – MS Windows.
● Accounting information system – MYOB AccountRight.
● Data analysis – Microsoft Excel 2007.

Actual results will be produced monthly by the MYOB accounting system. Actual variances to budget
will be produced using Excel with a report prepared for senior management for significant variances.
Financial delegations
● Each manager is responsible for achieving the revenue budgets agreed to in the budget
committee.
● Each manager is responsible to approve, by signing the necessary paperwork, all expenditures
that fall within their area of responsibility.
● Expenditures must be within the budget guidelines for the individual departments.
Format for budgets and reports

All budgets must include the:
● name of the person who prepared it
● cost centre (if applicable)
● name of the budget/report, i.e. sales, expenses, CAPEX, cash flow, budget
variance report
● period of the budget.

Your answers for task3 BSBFIM501 Manage budgets and financial plans
Answers for task 3:
BIG RED BICYCLE PTY LTD BUDGET VARIANCE REPORT
BUDGET VALUE ACTUAL VALUE VARIANCE $ VARIANCE %

FY2018-2019 FY2018-2019
INCOME
commission 77500 77500 - 0
Direct wages 220000 200000 -20000 -9
sales 3100000 310000 - 0
Total income 3397500 3377500 -20000 -0.5
EXPENSES
Accounting fee 24000 20000 -4000 -16
Legal fee 6000 5000 -1000 -16
Bank charges 2000 600 -1400 -23
Office supplies 5000 5000 - 0
Postage and 4000 400 -3600 -90
printing
Dues and 500 500 - 0
subscription
Telephone 20000 10000 -10000 -50
Repair and 38750 38750 - 0
maintenance
Payroll tax 40000 25000 -15000 -37
Advertising 400000 200000 -200000 -50
Super annuation 45000 45000 - 0
Wages and 500000 500000 - 0
salaries
Staff amenities 20000 20000 - 0
Electricity 40000 40000 - 0
Insurance 100000 100000 - 0
Rates 100000 100000 - 0
Rent 200000 200000 - 0
Water 30000 30000 - 0
Waste removal 50000 50000 - 0
TOTAL EXPENSE 1625250 1390250 -235000 -14
CLOSING 1772250 1987250 215000 12

BALANCE

Variance Report
The sales variance is adverse due to changes in economic climate. This resulted in
decline in sales of business during the year by 20%. The change in sales volume also
resulted inn decline in direct cost of sales by 20%. The commission on sales was
negotiated with the sales team members to be 2. % on sales instead of 2% which
resulted in no decline even after decrease in sales. The direct wages reduced by 50%
resulting in favourable variance since the 50% direct labour was short term contractors
which were no longer needed for the business. Due to decrease in sales by 20% the
gross profit also declined but the rate of decline was less which is 17.95%. The general
and administration expenses reduced by 50% which is an advantage for the business.
The employee expenses increased substantially since the full time workers and sales
personnel were involved in time wasting and also distracted other contracted
employees. The objectives of training and incentive program were not achieved.
There were no variations in the marketing cost since the advertisement expense is the
fixed cost. The occupancy costs increased since less attention was paid by the
employees towards the reduction in cost of wastage, raw material, water, electricity and
paper. He employees feel dissatisfied due to lack of participation in decision making for
budget. The net profit declined substantially by 45% however the projected profits could
be reduced only up to 10%. Thus managers will have to adopt effective measures to
improve efficiency and reduce costs.
Task B
Revised contingency plan
Contingency Plan
Name : Tom Copeland Position: Managing Director
Strategies/activities to minimize the risk By when By

whom
Produce quarterly variance reports to identify Q2 PR
income/ expenditure and profit shortfalls over 10%.

Implement sales training/coaching. Q2 PR
Introduce customer reward program to increase Q2 PR

sales
Participation of employees in budgetary decision Q2 PR

making
Increase attention towards wastage, water and Q2 PR

electricity, paper and raw materials
Modified contingency implementation plan
Activity Monitoring activity and Person/

date s
Monitor variance. Completion of P

variance report: R
Q2.
Analysis of report to identify Management P

issues. report: Q2. R
Email to warn employees of Monitoring of P

risk to jobs. variance report R
results: Q4.
Email to announce rise of Monitoring of P

commission from 2% to 2.5%. variance report R
results: Q3.
Email to inform employees Monitoring of P

that overtime will no longer be variance report R
approved. results: Q3.
Email to inform employees of Monitoring of P

mandatory sales skills variance report R
training: set program. results: Q3.
Emails to customers and Monitoring of P

employees about the variance report R
consumer reward program results: Q4.

Voluntary training conducted. Monitoring of P

variance report R
results: Q3.
Modifying procedures to Monitoring of P

reduce occupancy costs variance report R
results: Q3.

Facilitator Guide BSBFIM501_Marking Guide_Task 3
Marking Guide
Assessment Task 3: Monitor and control finances
Assessment site
Outcomes
Satisfactory
Submit a budget spreadsheet?
Clarify budget/financial plans and negotiate changes?
Consider feedback from team members?
Describe the effects of a 10% variance in profit projections, and

techniques to manage the variance?
Submit a budget variation report?
Submit a modified contingency plan and implementation plan?

Satisfactory
Implement processes to monitor actual expenditure and to control

costs across the work team?
● Candidate should develop a budget spreadsheet to capture
information as per scenario. To view sample of columns required
and formulae, see BSBFIM501_AT3_VarR_assessor_sample.
Monitor expenditure and costs on an agreed cyclical basis to identify

cost variations and expenditure overruns?
● Spreadsheet must contain columns for each of four quarters of
the financial year as per scenario requirements.
Implement, monitor and modify contingency plans as required to

maintain financial objectives?
Candidate produces modified contingency plan and implementation
plan to include most of (or similar):
● reduce contract employees by 50%
● remove unnecessary changes to overtime policy
● make training or coaching a regular activity
● make training or coaching consultative to receive views before

implementation
● make training/coaching relevant to actual need
● ensure communication is positive and stresses incentives;

reduce use of email for negative messages
● introduce consultative program to gather employee views on
reducing waste and increasing efficiency
● ensure communication includes opportunity for feedback and
underscores team member’s role in the strategic aims of
company.

Satisfactory
Report on budget and expenditure in accordance with organisational

protocols?
● Candidate should produce a variance report to satisfy scenario
and organisational needs. See
BSBFIM501_AT3_VarR_assessor_sample for example report.
● Report must conform to organisational requirements in policies
and procedures:
○ title
○ name
○ time period.

Assessor name:
Assessor signature:

Unit Feedback BSBFIM501 Manage budgets and financial plans
Please help us to improve our services to you. We would appreciate your honest feedback on
the training provided for this unit.
Thinking about your experience while participating in the training for this unit, please read the
following statements and tick one response only.
Trainer
name
Date Site
started
Learner name
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classes.
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participate during class.
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If you ticked “Disagree” for any questions above, could you please provide an explanation?
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Thank you for your feedback


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ASSESSMENT SUMMARY / COVER SHEET

Student ID No: Completion Date:

Unit Code: BSBFIM501

Unit Title: Manage budgets and financial plans

 Monitor and control

Final Assessment Result for this unit C / NYC

Assessor Comments and Feedback to student:

I am also aware of my appeal rights.

Name: ____________________________ Name: ____________________________

Administrative use only

Entered onto Student Management Database ________________

Choice Business College Page 1 of 42

Plan financial management approaches

● provide a contingency plan

● submit your notes.

Your assessor will be looking for:

● knowledge organisational requirements related to financial management such as

Michelle Yeo Chief Executive Officer (CEO)

Tom Copeland Managing Director

John Black Chief Financial Officer (CFO)

Stuart LaRoux Operations General Manager

Pat Roberts Senior Accountant

Sam Gellar Sales General Manager

Charles Pierce Production Manager

Holly Burke HR Manager

● increases in expenses such as wage expenses.

Choice Business College Page 3 of 42

In addition to Australian operations, the company is considering manufacturing overseas

● Sales for Q2 have been estimated to be $1,000,000.

● Commission negotiated with members of the sales team is now at 2.5%.

Choice Business College Page 4 of 42

Appendix 2 – Budgeting and finance policy

Format for budgets and reports

Choice Business College Page 5 of 42

Appendix 3 – Budgets and templates

Master budget with profit projections

Income Tax Expense (25%Net) 234,625 58,656 58,656 58,656 58,656

Choice Business College Page 6 of 42

Sales cost centre expense budget

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

Contingency plan template

Strategies/activities to minimise the risk By when By whom

Choice Business College Page 7 of 42

Answers for task 1:

Assessment Task 1: Financial Management approaches

Meeting with manager

Dear Sam Gellar

Issues for clarification:-

4. The format of presentation of elements of gross profit is not proper.

Choice Business College Page 8 of 42

Changes required to be negotiated

3. The commission on sales shall be provided @2.5%.

● 10% variation in projected profit for the year

● Adverse effect on liquidity resulting in difficulty to pay obligations and invest

Strategies/activities to minimise the risk By when By whom

Choice Business College Page 9 of 42

Customise the products in accordance with At the Production

Choice Business College Page 10 of 42

Choice Business College Page 11 of 42

Candidate’s name Phone no.

Name: Name: