Manage finances within a budget

2017
SITXFIN003
V1.0 2019

Learner Guide

Student Name:
Student ID:
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Table of Contents

Unit of Competency .......................................................................................................................... 4

Application ........................................................................................................................................... 4
Performance Criteria............................................................................................................................ 5
Foundation Skills .................................................................................................................................. 6
Assessment Requirements ................................................................................................................... 7
1. Allocate budget resources ............................................................................................................. 9
1.1 – Allocate funds according to budget and agreed priorities ........................................................... 10
Budgets .............................................................................................................................................. 10
Allocating funds based on organisational priorities .......................................................................... 10
Activity 1A .......................................................................................................................................... 12
1.2 – Discuss changes to income and expenditure priorities with appropriate colleagues prior to
implementation ..................................................................................................................................... 13
Discussing changes to income and expenditure ................................................................................ 13
Activity 1B .......................................................................................................................................... 16
1.3 – Consult with and inform relevant personnel about resource decisions ....................................... 17
Consulting personnel about resource decisions ................................................................................ 17
Informing personnel about resource decisions ................................................................................. 18
Activity 1C .......................................................................................................................................... 19
1.4 – Promote awareness of the importance of budget control ........................................................... 20
Promoting awareness of budget control ........................................................................................... 20
Activity 1D .......................................................................................................................................... 22
1.5 – Maintain detailed records of resource allocation according to organisational control systems . 23
Recording resource allocation ........................................................................................................... 23
Budgetary terms ................................................................................................................................ 24
Activity 1E........................................................................................................................................... 25
2. Monitor financial activities against budget ................................................................................... 26
2.1 – Use financial records to regularly check actual income and expenditure against budgets.......... 27
Monitoring financial records.............................................................................................................. 27
Checking expenditure against budgets .............................................................................................. 29
Checking income against budgets...................................................................................................... 30
Activity 2A .......................................................................................................................................... 31
2.2 – Include financial commitments in all documentation to ensure accurate monitoring ................ 32
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Including financial commitments in all documentation .................................................................... 32

Activity 2B .......................................................................................................................................... 33
2.3 – Identify and report deviations according to significance of deviation ......................................... 34
Identifying deviations......................................................................................................................... 34
Variances ............................................................................................................................................ 34
Significance of deviations................................................................................................................... 35
Reporting deviations .......................................................................................................................... 35
Activity 2C .......................................................................................................................................... 36
2.4 – Investigate appropriate options for more effective management of deviations ......................... 37
Managing deviations .......................................................................................................................... 37
Activity 2D .......................................................................................................................................... 38
2.5 – Advise appropriate colleagues of budget status in relation to targets......................................... 39
Advising colleagues of budget status ................................................................................................. 39
Circulating budget status reports ...................................................................................................... 39
Activity 2E........................................................................................................................................... 40
3. Identify and evaluate options for improved budget performance ................................................. 41
3.1 – Assess existing costs and resources and proactively identify areas for improvement ................. 42
Assessing existing costs and resources .............................................................................................. 42
Identifying areas for improvement .................................................................................................... 43
Activity 3A .......................................................................................................................................... 44
3.2 – Discuss desired budget outcomes with relevant colleagues ........................................................ 45
Holding useful discussions ................................................................................................................. 45
Discussing budget outcomes ............................................................................................................. 46
Activity 3B .......................................................................................................................................... 47
3.3 – Undertake appropriate research to investigate new approaches to budget management ......... 48
Researching new approaches ............................................................................................................ 48
Activity 3C .......................................................................................................................................... 49
3.4 – Define and communicate the benefits and disadvantages of new approaches ........................... 50
Defining and communicating the benefits of new approaches ......................................................... 50
Defining and communicating the disadvantages of approaches ....................................................... 50
Activity 3D .......................................................................................................................................... 51
3.5 – Take account of impacts on customer service levels and colleagues in developing new
approaches............................................................................................................................................. 52
Impact on customer service ............................................................................................................... 52
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Impact on colleagues ......................................................................................................................... 53

Activity 3E........................................................................................................................................... 54
3.6 – Present clear and logical recommendations for budget management ........................................ 55
Presenting recommendations for budget management ................................................................... 55
Presenting evidence ........................................................................................................................... 56
Activity 3F........................................................................................................................................... 57
4. Complete financial and statistical reports .................................................................................... 58
4.1 – Complete financial and statistical reports within designated timelines ....................................... 59
Completing financial and statistical reports ...................................................................................... 59
The financial report ............................................................................................................................ 59
The statistical report .......................................................................................................................... 60
Activity 4A .......................................................................................................................................... 61
4.2 – Prepare and present clear and concise information to enable informed decision making.......... 62
Using information to inform decision-making ................................................................................... 62
Preparation and presentation............................................................................................................ 62
Activity 4B .......................................................................................................................................... 63
Summative Assessments........................................................................................................................ 64
Appendices ..................................................................................................................................... 65
Accounting software .......................................................................................................................... 65
References ............................................................................................................................................. 66
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Unit of Competency
Application

This unit describes the performance outcomes, skills and knowledge required to take responsibility for
budget management where others may have developed the budget. It requires the ability to interpret
budgetary requirements, allocate resources, monitor actual income and expenditure, and report on
budgetary deviations.

The skills and knowledge for budget development are covered in SITXFIN004 Prepare and monitor
budgets.

This unit applies to all tourism, travel, hospitality and event sectors. The budget may be for an entire
organisation, for a department or for a particular project or activity.

It applies to those who operate independently or with limited guidance from others. This includes
supervisors and departmental managers.

No occupational licensing, certification or specific legislative requirements apply to this unit at the time
of publication.

Unit Sector

Cross-Sector
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Performance Criteria
Element Performance Criteria
Elements describe the Performance criteria describe the performance needed to
essential outcomes. demonstrate achievement of the element.

1. Allocate budget 1.1 Allocate funds according to budget and agreed priorities
resources 1.2 Discuss changes to income and expenditure priorities with
appropriate colleagues prior to implementation
1.3 Consult with and inform relevant personnel about resource
decisions
1.4 Promote awareness of the importance of budget control
1.5 Maintain detailed records of resource allocation according
to organisational control systems

2. Monitor financial 2.1 Use financial records to regularly check actual income and
activities against expenditure against budgets
budget 2.2 Include financial commitments in all documentation to
ensure accurate monitoring
2.3 Identify and report deviations according to significance of
deviation
2.4 Investigate appropriate options for more effective
management of deviations
2.5 Advise appropriate colleagues of budget status in relation to
targets

3. Identify and evaluate 3.1 Assess existing costs and resources and proactively identify
options for improved areas for improvement
budget performance 3.2 Discuss desired budget outcomes with relevant colleagues
3.3 Undertake appropriate research to investigate new
approaches to budget management
3.4 Define and communicate the benefits and disadvantages of
new approaches
3.5 Take account of impacts on customer service levels and
colleagues in developing new approaches
3.6 Present clear and logical recommendations for budget
management

4. Complete financial 4.1 Complete financial and statistical reports within designated
and statistical reports timelines
4.2 Prepare and present clear and concise information to enable
informed decision making
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Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the
performance criteria that are required for competent performance.

➢ Reading skills to:

o interpret business and financial documents
➢ Writing skills to:
o document clear recommendations based on budget information and reports
➢ Oral communication skills to:
o discuss budget requirements and seek and provide feedback
➢ Numeracy skills to:
o interpret and use budget figures in day-to-day work operations
o calculate budget estimates and scenarios for performance improvement
➢ Problem-solving skills to:
o identify budget deviations and deficiencies and develop options for improved budgetary
performance
➢ Teamwork skills to:
o discuss desired budget outcomes with team members and provide direction on resource use
➢ Technology skills to:
o use accounting software packages
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Assessment Requirements
Performance Evidence

Evidence of the ability to complete tasks outlined in elements and performance criteria of this unit in
the context of the job role, and:

➢ Manage a budget for a business over a three-month period that meets the specific business’ needs
➢ Undertake at least two of the following to inform management of the above budget:
o discussions with existing suppliers
o evaluation of staffing and rostering requirements
o evaluation of impact of potential roster changes
o review of operating procedures
o sourcing new suppliers
➢ Monitor income and expenditure and evaluate budgetary performance over the above budgetary
life cycle
➢ Complete financial reports related to the above budget within designated timelines and using
correct budget terminology

Knowledge Evidence

Demonstrated knowledge required to complete the tasks outlined in elements and performance criteria
of this unit:

➢ Types of financial records:

o bank deposit documentation
o bank statements
o banking summaries
o business activity statements
o cheque books
o credit card transaction statements
o invoices
o journal entries
o labour and wages reports
o merchant statements
o merchant summaries
o transaction reports
➢ Types of budgets:
o cash budgets
o cash flow budgets
o departmental budgets
o event budgets
o project budgets
o purchasing budgets
o sales budgets
o wage budgets
o whole of organisation budgets
➢ Factors for consideration in the preparation of financial and statistical reports:
o cash flow
o commercial account activity
o commission earnings
o covers and financial return
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o daily, weekly and monthly transactions

o expenditure
o income
o occupancy rates and financial return
o performance of department, project and/or products and services
o sales performance
o sales returns
o staff costs
o stock levels
o variance in income and/or expenditure
o wastage
o yield
➢ Use, contents of and formats for:
o budgets
o financial reports
o statistical reports
➢ Budget terminology
➢ Specific industry sector and organisation:
o use of budgets to control costs and enhance profitability
o importance of budget control
o techniques for maximising budget performance
o financial reporting procedures and cycles
o features and functions of accounting software programs used to manage budgets

Assessment Conditions

Skills must be demonstrated in an operational tourism, travel, hospitality or events business operation
for which budgets are managed. This can be:

➢ An industry workplace
➢ A simulated industry environment.

Assessment must ensure access to:

➢ Computers, printers and accounting software packages

➢ Budgets for specific projects, events or operational activities
➢ Others with whom the individual can discuss budget components; these can be:
o those in an industry workplace who are assisted by the individual during the assessment
process; or
o individuals who participate in role plays or simulated activities, set up for the purpose of
assessment, in a simulated industry environment operated within a training organisation.

Assessors must satisfy the Standards for Registered Training Organisations’ requirements for assessors.

Links

Companion Volume Implementation Guide: - http://www.serviceskills.com.au/resources

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1. Allocate budget resources

1.1. Allocate funds according to budget and agreed priorities

1.2. Discuss changes to income and expenditure priorities with appropriate colleagues prior to
implementation

1.3. Consult with and inform relevant personnel about resource decisions

1.4. Promote awareness of the importance of budget control

1.5. Maintain detailed records of resource allocation according to organisational control systems
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1.1 – Allocate funds according to budget and agreed priorities

Budgets
In simplified terms, a budget is a spending plan which is created by estimating revenue, income, and
resources over a specified period of time.

Budgets are usually created to help manage expenditure in specific areas/departments of a business.
They will also help managers to prioritise and allocate funding for projects, events, or organisational
goals.

As a general rule, a budget will contain the following information:

➢ Known costs, e.g., for facilities or administrative costs

➢ Estimated costs for the elements that are not fixed or known, e.g., staff work hours

➢ Income that is received which offsets the costs.

As a departmental manager or supervisor, much of your work will involve creating, monitoring, and
managing budgets, as well as making managerial decisions based on budgetary allowances. As you will
already be aware, budgets affect nearly every decision you make as a manager.

You may be responsible for managing a number of different budgets across your organisation – some of
these may be listed below.

Types of budgets include:

➢ Departmental budgets

➢ Event budgets

➢ Project budgets

➢ Purchasing budgets

➢ Labour and wage budgets

➢ Sales budgets

➢ Whole of organisation budgets.

Allocating funds based on organisational priorities

An important part of your job will involve allocating budgetary funds to specific areas of your
organisation. Before you can consider allocating any funds, however, you will need to discuss, negotiate,
and decide on organisational priorities with key stakeholders.

What are your organisation’s priorities?

You will need to have a clear understanding of what your organisation’s strategic priorities are, as this
will determine how much funding you provide different areas of the business.
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Your organisation’s priorities will usually be summarised in mission statements, vision statements, and
work plans, but if you are still unsure you may need to organise a meeting with other financial decision-
makers to discuss and clarify your strategic direction.

Your organisation’s priorities will depend on what kind of business entity it is, your organisation’s
position within its market/industry, and its vision for the future. The priorities you decide on will not
only allow your company to remain operational, but it will also allow it to flourish in a niche market
area, maximising profitability in the long run.

For example, your organisation’s priorities may include:

➢ Promoting a new product or service (marketing)

➢ Expanding your department through increasing

staff numbers (human resources)

➢ Developing a new product

➢ Improving product/service quality

➢ Improving customer communications

➢ Increasing staff retention

➢ Improving reputation among target audiences.

Allocating funds
How much funding you direct to any part of your organisation will depend on how much is needed to
meet goals and remain operational.

Estimating expenditure in different departments and across different projects can usually be done by
looking at historic expenditure patterns to identify the level of funding needed to achieve goals and
reach desired outcomes.
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Activity 1A
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1.2 – Discuss changes to income and expenditure priorities with appropriate

colleagues prior to implementation

Discussing changes to income and expenditure

In most organisations, you will not be responsible for setting priorities and allocating funding alone;
usually, you will be part of a team which discusses and negotiates a range of options, in order to
establish the best route forward for the organisation.

Who do you need to discuss priorities with?

The colleagues that you need to hold discussions with will vary depending on the size of your
organisation and how it operates (this should be clear in organisational protocols and procedural
documents).

In most cases, you will need to involve all key stakeholders and financial decision makers, holding group
meetings where appropriate. At the same time, you should be careful to only involve those who stand
to be affected by decisions, or who hold specific skills, knowledge, or experience in the areas being
discussed.

Having a discussion group which is too large can cause confusion, and decision-making can become a
much more difficult process.

Normally, you will need to discuss priorities with:

➢ Managers from relevant departments

➢ Accounting professionals (internal and external)

➢ Supervisors from relevant departments

➢ Owners and directors

➢ Stakeholders

➢ Purchasing staff

➢ Marketing staff

➢ Specialists (internal and external)

➢ A spokesperson for employees.

Discussions
Usually, the best format for holding discussions is a formal, face-to-face meeting, which involves all
decision makers and key stakeholders.

A formal meeting allows all parties to field ideas and raise concerns/disagree when necessary, as well as
allowing those attending to ask questions and clarify points. Organised meetings generally improve
chances of reaching decisions quickly and efficiently, and will ensure that all parties are aware of
changes to income and expenditure priorities prior to their implementation.
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Expenditure changes
If your organisation is going to control its financial situation and stay within budget, it is vital that all
managers and financial decision-makers are clear about expenditure requirements – Including how it
requires them to change their practices and overall approach. All spending must contribute to the
organisation’s goals and strategic direction in some way; any spending outside these goals is usually
classified as waste.

Expenditure can be broken down into departmental spending – such as labour and wages, stock
purchasing, general overheads, marketing and advertising, training, and wastage.

Other than general overheads, which will usually remain constant in order to keep the business running,
the organisation’s other costs can change as priorities change. For example, priorities for one month
may include training new staff; the month after may be more focussed on developing new products or
improving customer services.

Remember: you won’t be able to spend on every area at once (if you are to stay within budget), which is
why it is important to prioritise carefully.

All personnel will need to know:

➢ How to make expenditure choices that contribute to the organisation’s overall goals

➢ Which areas of the organisation require

reduced spending and cutbacks

➢ Which priorities will require extra funding and

why

➢ Time periods for priority funding and

expenditure

➢ Any budgetary changes made to support priorities

➢ Exact monitoring methods to finances are controlled

➢ How financial records need to be kept

➢ How financial information needs to be reported.

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Income
Although controlling expenditure will be your main priority, you should not forget about monitoring and
managing sources of income. Colleagues will also have to be informed about expected revenues and
sources of income during budgetary periods, so that they can work towards ensuring these areas are
monitored and focused on.

You should communicate:

➢ Expected sales figures

o make sure colleagues receive a breakdown of expected sales figures for key
services and products

➢ Expected investment

➢ Expected commission earning figures

➢ Expected donations

➢ Occupancy and gross income.

Note: the term yield is used to define the income return on an investment.
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Activity 1B
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1.3 – Consult with and inform relevant personnel about resource decisions

Consulting personnel about resource decisions

You must consult with all parties who were listed in chapter 1.2 about the exact uses of your
organisation’s financial resources – Including departmental managers, supervisors, owners, accountants
and other key stakeholders.

You will need to discuss how finances are currently allocated and how they need to be allocated in the
future, in order to meet organisational goals without running over budget.

Consulting with other financial decision-making personnel will allow you to increase your knowledge of
your organisation, including how money is currently spent and what extra needs and requirements
there are. For example, a manager from a different department may identify that more staff are needed
in a certain operational area, and may be able to provide details about the funding needed to achieve
this. Another manager may be able to identify ways of reducing overheads, which in turn will free up
funding to be used elsewhere.

You will only be able to find out about requirements in different areas of your organisation by
consulting with a range of personnel.

Spending on resources
You may decide to invest more or less in any of the following areas.

Resource decisions may involve:

➢ Human resources
o expenditure includes:
▪ wages
▪ number of personnel at each level of the hierarchy
▪ recruitment
➢ Physical resources
o expenditure includes:
▪ the buying of products
▪ the building and maintenance of infrastructure
▪ the buying and maintenance of equipment and technology
➢ Non-physical assets
o intellectual property
➢ Marketing and advertising
o expenditure may include:
▪ TV advertising
▪ magazine and newspaper space
▪ Billboards.
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Informing personnel about resource decisions

You will need to inform all personnel about resource decisions, so
that they can make appropriate financial decisions in their own
departments, and so that all parties can work toward the same
organisational goals.

You may communicate resource decisions to employees in a number

of different ways. If decisions affect personnel company-wide, then it
is best to call a group meeting to announce decisions. If, however,
information concerns specific personnel, then you may choose to
arrange smaller meetings, send emails, make telephone calls, or send memos.
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Activity 1C
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1.4 – Promote awareness of the importance of budget control

Promoting awareness of budget control

It is essential to explain and promote the importance of budget control to all personnel that you
manage, mentor, or supervise. Educating personnel and pushing the importance of budget control can
be the key to staying within budget, while also achieving agreed objectives.

Ensuring all personnel know why a budget is in place, and are aware of the goals and priorities that have
been agreed upon, will allow employees to feel involved at all levels of the organisation. This feeling of
involvement can motivate employees to adhere to the organisation’s strategy and make decisions that
support any budget in place.

The overall efficiency of the organisation – including how well it controls expenditure and maximises all
forms of income – relies on the involvement of all employees, at all levels of the organisational
hierarchy. Just because managers and supervisors make the decisions, it doesn’t mean they can
guarantee the delivery of work objectives within budget on their own. All staff need to be involved.

You will need to stress the importance of:

➢ Expected income in the budgetary period

o you may need to cover any strategies that will maximise income

➢ Expected overheads

o you may need to cover strategies that will minimise overheads

➢ Funding allocation

o how much funding each department will get

o specific funding for events

o specific funding for development

o funding for recruitment and staff training

o funding for marketing and advertising

➢ Recording and reporting

o all personnel should be clear and confident about how financial data is recorded

o all personnel should be clear and confident about how to report financial
information to managers and supervisors.
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Explaining budgets
You may need to explain and promote the importance of a wide range of different budgets, depending
on the employee’s position within the company, and their involvement with tasks that could affect any
budgets. You will need to make it clear why each budget exists and how their actions can help to
manage, monitor and support it.

Depending on the personnel you promoting awareness to, you may need to explain:
➢ Cash budgets

o an estimation of cash inflows and outflows for a specific period

➢ Departmental budgets

o estimates income and expenses for a single department within an organisation

➢ Wage budgets

o an estimation of the cost of

employees’ wages

➢ Project specific budgets

o an estimation of the costs

associated specifically with one
project

➢ Purchasing budgets

o an estimation of the costs associated with buying stock and other physical assets

➢ Sales and revenue budgets (which may incorporate debtors)

o an estimation of sales revenue and expenditure

o it is important that you know you have the financial means to carry out planned
activities

➢ Cash flow budgets

o an estimation of all cash receipts and cash expenditures that are expected to
occur in a certain period.
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Activity 1D
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1.5 – Maintain detailed records of resource allocation according to

organisational control systems

Recording resource allocation

It is vitally important to record all resources allocated, if you want to manage finances within a budget.

You will need to be sure about how funding has been allocated – for example, which departments have
received how much funding? You will also need to be sure about this funding is being used, and this will
require good record keeping practices by all personnel.

Expenses records
You must keep certain records when resources and funding are allocated in your organisation.

The expenses records that need to be kept include:

➢ Purchase orders

o proof that a valid purchase was authorised and as an initial indication as to which
department and perhaps budget line/code the purchase was intended for

➢ Delivery docket/invoice/statement

o these documents demonstrate that the goods which were ordered were in fact
received and provide the evidence about how much was spent.

➢ Internal requisitions

o these will prove that stock was issued

from a central store to a specified
department; the quantity and quality
of each item will be listed on the
requisition, thereby enabling the
appropriate amounts to be charged
against relevant departments

➢ Interdepartmental transfers

o similar to internal requisitions, these documents prove that stock that has been
issued to a certain department has been ‘on–sold’ to another department and
must now be charged against them

➢ Creditors ledger

o a detailed explanation of who your organisation owe money to, and how much.
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Tracking physical resources

Every item of equipment bought should be given an identifying number or code. When the item is
issued to a department, its whereabouts should be recorded in a dedicated assets register.

The assets register may also record the date of purchase, the supplier, when warranties run out, the
price paid, date issued to the department, as well as details about when the item requires
maintenance/service and/or replacement.

Items covered by this register may include cars, in–room

facilities (such as beds, televisions and fridges), technology, and
office equipment. Some registers record all items of equipment,
including what may be regarded as ‘small equipment’; some
registers record only ‘large equipment’ or items over a certain
cost price.

Asset registers can also be used to allocate expenses against departments when a purchase has been
made and for purposes of calculating depreciation.

Budgetary terms
When dealing with budgets, knowing the right terminology will help you to navigate through and
understand the different parts that make up your organisation’s budgets.

Terms used in budgets (this list is not exhaustive) include:

➢ Allotment – amounts of money which are allocated within the budget

➢ Budget code – a numeric code that can be used to differentiate between different
budget areas

➢ Fixed costs – costs which do not change

➢ Variable costs – costs which are subject to fluctuation

➢ Semi-variable costs – costs which must occur but which have a variable or option (e.g.,
rental equipment may be rented for a short or long period of time)

➢ Direct costs – costs which are specific to an element involved

➢ Indirect costs – costs which must be incurred but are unspecific

➢ Budget variance – any difference found between budgeted and real amounts

➢ Balanced budget – where the expenditure correctly equals the income

➢ Pro forma balance sheet (or income statement) – a budgeted balance sheet (or income
sheet).
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Activity 1E
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2. Monitor financial activities against budget

2.1. Use financial records to regularly check actual income and expenditure against budgets

2.2. Include financial commitments in all documentation to ensure accurate monitoring

2.3. Identify and report deviations according to significance of deviation

2.4. Investigate appropriate options for more effective management of deviations

2.5. Advise appropriate colleagues of budget status in relation to targets

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2.1 – Use financial records to regularly check actual income and expenditure
against budgets

Monitoring financial records

The monitoring of budgets will form a large part of your role as a manager, and to do this you will have
to regularly check financial records to be aware of actual income and expenditure.

Studying documents such as balance sheets, revenue reports, and overall expenditure reports will give
you a good overview of actual income and expenditure, but you may have to investigate further to
understand the exact status of current finances against budgets.

Types of financial records

You will need to check a range of financial records to understand your organisation’s financial status,
and to confirm that funds are being spent in the correct areas.

Types of financial records you may have to check include:

➢ Trial balances

o a list of closing balances in ledger accounts

➢ Receivable reports

o these reports show how much is owed to your organisation

▪ this should not be ignored, as it can represent a large proportion of

incoming cash flow

➢ Purchase summary reports

o includes all orders you have placed with suppliers

▪ this can represent a large proportion of expenses

➢ Stock reports

o signifies the overall health of the company

o provides investment information

➢ Variance reports

o shows differences between planned

financial outcomes and actual outcomes

▪ this can be a vital tool when comparing income and expenditure

against budgets

➢ Wastage reports

o indicates resource wastage, including financial wastage

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➢ Sales reports

o shows the number of products sold during a specified time period

➢ Supporting reports, such as covers, occupancy rates, staff costs and units sold

➢ Business activity statements

o used for reporting and paying goods and services tax

➢ Labour and wages reports

o clearly shows wage costs at different levels of the organisation’s hierarchy

➢ Cash flow statement

o records the amount of cash and cash equivalents entering and leaving the
company

o does not include the amount of future income and outgoing cash

➢ Bank statements

o shows amounts actually paid in and

withdrawn

➢ Bank deposit documentation

o proves that money has been deposited

into bank accounts

➢ Credit card transaction statements

o shows items that have been bought on

credit

➢ Banking summaries

o similar to bank statements, where amounts paid and taken out are seen, and
may also contain summary information on money activities for a period of time

➢ Cheque books

o Your organisation’s cheque books for payments made; you may need to make an
additional record of all cheques paid out (and those received) to document
payees, amounts paid and the date these were generated

➢ Invoices

o used to evidence sales and money activities with customers and own
suppliers/contacts; these will be invoices sent out to customers/clients for goods
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or sales made and where money is owed, or invoices received for services or
goods bought which your financial department will need to make payment for

➢ Journal entries

o a record of financial activities documented in a financial

journal; these are made in chronological order, whereas
accounts documented in a ledger are recorded by accounts

➢ Merchant statements

o shows the banking activities of the organisation, i.e., the

financial trading activities

➢ Merchant summaries

o shows the summary of the organisation’s trading financial activities

➢ Covers

o Details a transaction which offsets a liability or obligation

➢ Expenditure

o shows where and how much money has been spent in organisational activities

➢ Occupancy rates

o shows the costs involved in use and maintenance of business premises

➢ Transactions

o reports detailing where, when and to whom organisational transactions have

been made, these may be made daily, weekly and monthly.

Checking expenditure against budgets

It is important to make thorough checks of the above financial records in order to understand what
funds have been spent on, and in what areas of your organisation. Your main priority should be to check
that spending has not exceeded forecasted predictions, and that all allocated funding has been focussed
on agreed priorities and overall business goals.

You will need to pay particular attention to the primary areas of expenditure, including labour costs, the
purchasing of stock, rent, technology, and maintenance, in order to ensure that these areas are
controlled as much as possible. It will also be important to account for any debts that have not yet been
settled, as this can greatly affect overall expenditure figures.

If you identify any areas of overspending, unfocussed spending, or wastage, you should look to take
action to tighten control of finances. Taking early action in these cases will often give you a better
chance of sticking to the budget.
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Checking income against budgets

It is equally important to make checks on all money coming
into the organisation – including money yet to be paid – to
ensure that overall income is meeting forecasted levels, as
specified in the budget. This must be done to make sure that
enough money is coming in to the organisation to fund
planned business activities.

Important income statistics include overall sales volumes,

revenue, investment levels, donations, and money yet to be
paid by debtors.

If you recognise that income has fallen below expected levels then you may be forced to adjust the
budget to reduce spending in the same period.
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Activity 2A
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2.2 – Include financial commitments in all documentation to ensure accurate

monitoring

Including financial commitments in all documentation

It is important to include all financial commitments in documents and records, in order to provide a real
and accurate budget status which shows income and expenditure.

Most costs, such as staffing costs, are paid out regularly, remaining much the same from month to
month; other costs, however, may be one offs, with payment expected at a specified date in the future.
You must take steps to ensure the latter type of cost is included in documents, in order to receive a true
impression of expenditure.

Financial commitments
A financial commitment is made when an order is placed or a contract is signed for goods/services, with
payment agreed to be paid at a later date. These payments may cause a spike in cash flowing out of the
organisation, and this can have implications for the budget if it is not accounted for properly in
documents as early as possible.

You must include all financial commitments into finance documents, so that spikes and troughs in cash
flow are foreseen and accounted for. A failure to include commitments into documents can make it
extremely difficult to control a budget, as you may well find yourself overspending in months where
large payments are due.

Examples of commitments include:

➢ Billed services from external professionals

o for example, you may hire an external

electrician to fix technology on a one-off
basis

➢ Stock orders made

o you may order a large stock order,

agreeing to make payments at a later date

➢ Anything bought on credit

➢ Rental agreements

o rental payments for shop or office space may be due at different points in the
year

➢ Purchasing of intellectual property rights

o you may owe commission payments if you use other intellectual property.
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Activity 2B
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2.3 – Identify and report deviations according to significance of deviation

Identifying deviations
Your organisation may choose, or be forced, to deviate from a budget for a wide range of different
reasons. Usually, these reasons are called variances, and refer to any number of variables which can
cause estimations for expenditure and income to be significantly inaccurate.

Variances
Sales volume changes
One of the main variances which can cause your organisation to deviate from an original budget is sales
volume figures. The sales of products and services will greatly influence income statistics in any
organisation, and if income falls or rises then you may need to adapt the budget.

Changes to sales volumes may be caused by changes in the economy, with people having more or less
spending power depending on economic fluctuations. Advertising, competition, and changes to prices
can also have a big impact on sales figures.

Materials and supply changes

Materials and supplies can also trigger deviations from
planned budgets. You may be forced to deviate from a
budget if market prices drop or rise and the price of materials
changes significantly.

You may also be forced to deviate because of the quality of

materials purchased, which may affect the price you can
charge due to the quality of products and services.

Labour
Changes in market labour rates, wage rates, and staff sickness rates can also cause expenditure and
income variances, which may cause deviations from the budget. The quality of the people you employ –
their skill level, knowledge level, and experience – can also affect income and expenditure statistics.

Disaster/emergency
Disasters and emergencies which result in the loss or damage of assets, or that require spending to fix,
can also hit budgets in a negative way. For example, if a flood damages your organisation’s computer
technology, you may have to use funds to buy new technology in the short-term, while insurance claims
are organised.
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Significance of deviations
It is important to identify the significance of any deviations, and classify them according to the action
you need to take. You may choose to categorise deviations as minor or insignificant, in which case no
action will need to be taken. However, you will need to take action in the event of mid-level deviations,
which require close monitoring and small budget adjustments, and large deviations, which require
immediate action and budget re-writing.

You will need to:

➢ Identify the size of the variances to understand the likely impact on budgets

o small variances often have little consequence, and therefore do not require
extensive action or reporting

➢ Establish whether you are dealing with variances that have positive or negative effects
on the budget

o for example, do the variances cause an increase or decrease in profits?

➢ Establish whether variances can be controlled and whether any action you take is likely
to make a positive difference.

Reporting deviations
If you identify significant variances that are likely to affect the budget in a positive or negative way, then
you must report this information to your superiors, including business owners and directors.

You should aim to deliver regular reports on budget control, but you should also communicate any
potential budget deviations immediately. Proper reporting will allow finances to be controlled, and
budgets to be amended if necessary.

You may:
➢ Organise face-to-face meetings to report budget
deviations

➢ Send reports by email

➢ Highlight deviations on computer systems

➢ Report details by phone

➢ Send graphs, charts, and updated financial documents.

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Activity 2C
 P a g e | 37

2.4 – Investigate appropriate options for more effective management of

deviations

Managing deviations
The options you have for managing deviations will largely depend on whether variances are favourable
or unfavourable, and the significance of deviations.

It is vital to take appropriate action as soon as you notice the emergence of a significant deviation;
otherwise the deviation is likely to grow larger.

The specific action you take will vary according to the area of work concerned and the detail of the
statistics themselves, but in most cases you will have to adjust your budget for the next quarter
immediately, usually by altering the estimates for expenditure.

Small to mid-size deviations

You will have more options available to you if deviations are only small or mid-sized, as budgets can
usually be easily adapted in these circumstances.

Options for managing small to mid-size deviations include:

➢ Reducing funding from specific resources, areas and departments

➢ Increasing funding in resources, areas, and departments

➢ Switching to different budgeting systems, if you are sure that deviations are a one off

o for example, a cash flow budget may be more appropriate

➢ Increasing/decreasing expenditure and income estimations

➢ Reducing wastage

➢ Reducing/increasing number of goals/priorities for the budget.

Large deviations
Large deviations will generally leave you with fewer options, as budgets become more difficult to adapt
when estimations are significantly inaccurate.

You may need to:

➢ Make significant changes to the budget

o this may mean :

▪ reducing or increasing funding

▪ accepting overspending in a time period

▪ scrapping or rethinking priorities

▪ scrapping projects

▪ rethinking purchasing levels, wage increases, and new staff.

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Activity 2D
 P a g e | 39

2.5 – Advise appropriate colleagues of budget status in relation to targets

Advising colleagues of budget status

Just as it is important to inform your colleagues about budgetary forecast and agreed priorities, it is also
important to update them on a budget’s status in relation to agreed targets.

Regularly updating key stakeholders about a budget’s status will ensure that all key decision makers
remain aware of current activity, and will often help to keep them focussed on targets. Regular updates
can also allow decision-makers to raise concerns, ask questions, and offer their own ideas concerning
the budget.

Circulating budget status reports

You should look to create regular reports which clearly show overall expenditure and income levels, as
well as a breakdown of the main areas of expenditure and income. This should be sent to all those who
have any financial decision-making power at organisational or departmental level.

Ensuring that all appropriate parties receive reports will help your colleagues make responsible and
informed decisions to control spending, maximise and monitor income, and contribute towards targets.
This then gives every relevant party a chance to express their thoughts on the proposal and to make
suggestions regarding what to change and what to keep.

You may need to inform:

➢ Senior management
o it is likely that senior managers will have been involved in most budget
discussions, so it is vital that they are kept updated as much as possible
➢ Mid-level management
o e.g. heads of department
o these employees often have control over income
and expenditure, so it is important that they know
the budget’s status
➢ The accounts department
o the accounts department may be involved in
creating reports, but they should also be kept up-to-date with organisational
targets
o although accountants’ jobs are focussed on numbers, they must feel involved in
the wider context of the organisation, and this requires you to inform them of
progress towards goals
➢ A budget committee
o such committees are responsible for the ongoing monitoring of income and
overseeing revenue against projections
➢ Any other relevant staff members
o for instance, those who have worked on creating or monitoring the budget at
any stage.
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Activity 2E
 P a g e | 41

3. Identify and evaluate options for improved budget

performance
3.1. Assess existing costs and resources and proactively identify areas for improvement

3.2. Discuss desired budget outcomes with relevant colleagues

3.3. Undertake appropriate research to investigate new approaches to budget management

3.4. Define and communicate the benefits and disadvantages of new approaches

3.5. Take account of impacts on customer service levels and colleagues in developing new
approaches

3.6. Present clear and logical recommendations for budget management

 P a g e | 42

3.1 – Assess existing costs and resources and proactively identify areas for
improvement

Assessing existing costs and resources

Before you can begin to suggest improvements to a budget, you must first evaluate its current status by
assessing existing costs and resources.

You should aim to evaluate all areas of expenditure to get an overview of money and resources leaving
your organisation. Each area of spending should be reviewed to make sure there is no avoidable
wastage occurring. For example, you may identify that your organisation is consistently ordering stock
that does not sell well, or that is not popular with customers. In this case, you could make immediate
changes to cut the quantity of certain items in upcoming stock orders.

Next, you should check all areas of expenditure to make sure that all funds are being used to work
toward agreed organisational priorities; any expenditure that falls outside these priorities should be
refocussed so that is used as efficiently as possible. For example, you may identify that one department
has focussed its marketing activities on an aging product, when agreed priorities called for the
promotion of a new product.

Remember: all funding in each of the following expenditure areas should contribute towards
organisational goals and objectives.

You may need to assess expenditure areas such as:

➢ Labour costs

o consider wages, recruitment, and training costs

➢ Marketing and advertising costs

o consider costs for advertising space and time across all

platforms

o consider how much it costs to design adverts

➢ General overheads, such as lighting and heating

➢ Administration costs

o consider how much it costs to keep the organisation running, including all
paperwork requirements

➢ Customer communications

o how much does it cost to run a customer hotline, for example?

➢ Returns and refurbishment

o how much does it cost to run a dedicated returns and refurb department?

➢ Technology

o how much does it cost to replace, maintain, and upgrade technology?

 P a g e | 43

Identifying areas for improvement

It is vital that you can critically evaluate financial decision-making and current financial activity to make
the necessary improvements.

Cutting wastage
You should look to consult other managers to discuss areas
where waste is occurring, and then implement strategies to
try and reduce that waste. Think about the products and
materials you are buying, the suppliers you are buying
them from, the technology you are using, the standard
procedures used by your organisation’s employees,
customer service, and human resource spending. You are
likely to find a multitude of areas which are inefficient and
in need of re-thinking.

Organisational goals
As has already been covered, all funding should contribute towards organisational goals. You may be
able to identify areas of spending that need to be refocussed on organisational goals, in order to
improve overall efficiency.

Internal communication
Methods of internal communication should be considered, as positive methods can allow all parties to
be updated on budgets, spending goals, and overall organisational goals. In short, this can help improve
efficiency and focus spending where it is needed more.

Organisational structure
Structure is the way your organisation is organised; the departments and teams at various levels of the
hierarchy must be able to communicate and work together to cut wastage and focus organisational
funding on the appropriate goals.

Human resources
Human resource requirements refer to your organisation’s personnel. The numbers and quality of
employees, the skills and experience they have, and the way they work together will have a huge impact
on performance and, therefore, budgets.

You should also note that any staff working on a commission basis will have variable wage amounts.
Commission may be paid to staff as a percentage, such as a percentage of a sale, or as a flat dollar rate.
This makes staff wages a variable costing to the organisation.
 P a g e | 44

Activity 3A
 P a g e | 45

3.2 – Discuss desired budget outcomes with relevant colleagues

Holding useful discussions

Holding focussed discussions can be extremely useful when making decisions about budgetary
improvements. To improve a budget’s performance, you should aim to discuss the budget’s outcomes
with the same personnel that you discussed budget priorities with. Holding discussions with these
personnel will help to inform all major financial decision makers, reach decisions, make the most of
people’s knowledge and experience, and develop ideas.

Effective discussions require you to:

➢ Value everyone’s opinions

o you may not agree with your colleagues, but you should learn to encourage and
accept all views despite this

➢ Involve the correct people

o based on position within the organisation, knowledge, and experience

➢ Communicate clearly

o using both verbal and non-verbal

communication

➢ Compromise when necessary

➢ Use active listening techniques

o listen, clarify, and confirm

➢ Be open-minded to new ideas and points of view

➢ Trust your colleagues.

 P a g e | 46

Discussing budget outcomes

You should look to discuss the following questions with the appropriate members of your team.

What is the budget supposed to achieve?

You will have already discussed budget priorities with your colleagues, so all personnel should be clear
about why specific budgets exist. For example, you may have created a budget to help improve financial
control within a specific department.

All budget goals and objectives should be reiterated to make sure everyone is clear what they are.

Is the budget achieving what it is meant to?

You should discuss whether the budget you have in place is helping to control finances. If it is not and
you conclude that estimated income and expenditure figures are incorrect, you will need to discuss why
that is. For example, it may because of a one-off unforeseen event – such as a natural disaster – or it
may be because of continued wastage in certain departments.

What action needs to be taken if budgets are not achieving what they are supposed to?
You will need to discuss and establish reactive protocols for adjusting and improving budgets when they
are not helping to control finances. For example, you should clarify when a reassessment of costs needs
to be carried out, and when income and expenditure estimates need to be adjusted.
 P a g e | 47

Activity 3B
 P a g e | 48

3.3 – Undertake appropriate research to investigate new approaches to budget

management

Researching new approaches

Researching new approaches to budget management is an essential step when working to improve
budgets.

Research can take many forms, which may include some of the following.

What do competitors do?

Often, a useful research method is to look at how your
competitors approach budget management. If this is not possible,
look at publically available examples of how successful companies
in your industry control their finances.

Pay close attention to how they prepare, discuss, monitor, and

adapt their budgets, according to what type of budget it is and
what its purpose is (e.g. to control finances while developing a new
product).

Consulting experts and colleagues with more experience

Research can also be carried out by consulting financial experts – such as accountants – or colleagues
that have more experience of managing finances and budgets. These parties may be able to tell you
where you are making mistakes, or offer useful insights about how to control budgets.

Researching accepted theories

Another option for undertaking research is to read/watch/listen to learning materials which examine
proven financial management theories and approaches, and why they work. You should make sure you
get your information from a variety of trusted sources, and critically evaluate whether any approaches
or strategies are likely to work for your organisation before implementing them.
 P a g e | 49

Activity 3C
 P a g e | 50

3.4 – Define and communicate the benefits and disadvantages of new

approaches

Defining and communicating the benefits of new approaches

It is vital that you define the benefits of any new approaches to budgetary management that you adopt,
before communicating them to your team.

Defining approaches will require you to meet with other relevant personnel to discuss why it is worth
adopting new approaches, and why they will help the organisation to control finances more effectively.
All employees who deal with any aspect of organisational finances should be involved in this meeting, as
it is these staff that will ensure the new approaches are implemented correctly.

A lack of information may lead to a lack of financial control, potentially leading to the failure of new
strategies and approaches.

Defining the benefits of new approaches will require you to:

➢ Express why they are better than old approaches

➢ Point out why new approaches are more accurate in estimating

income and expenditure

➢ Communicate why new approaches will increase efficiency and

decrease wastage

➢ Explain how new approaches will help to prioritise organisational goals and objectives

➢ Determine how monitoring, reviewing, and reporting will improve with the adoption of
the new approach.

Defining and communicating the disadvantages of approaches

While it is important to emphasise why a particular approach will work, it is also important to point out
the drawbacks.

Defining and communicating the disadvantages of approaches that you are planning to adopt will
ensure that all staff know what pitfalls to watch out for, and how to minimise the effect of
disadvantages. Again, communication is vital, so make sure you organise a dedicated meeting to cover
all areas.

You may need to communicate:

➢ Why new approaches/strategies can lead to lack of control or incorrect budget
estimations

➢ When disadvantages are likely to occur

➢ What areas of the organisation or budget the disadvantages are likely to occur in

➢ How staff can act to minimise the impact of disadvantages

➢ Key monitoring and reporting protocols which will help to minimise the impact of
disadvantages.
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Activity 3D
 P a g e | 52

3.5 – Take account of impacts on customer service levels and colleagues in

developing new approaches

Impact on customer service

You must be aware of the effect that adopting new financial approaches is likely to have on your
organisation’s customers.

Trying to re-direct, cut, and control expenditure within your organisation will have an effect on
customers’ experiences – whether they are positive or negative.

You must be extremely careful that your organisation’s actions when controlling expenditure do not
negatively impact on the customer experience. Ideally, you should make small adjustments to financial
management approaches, so that you can easily monitor the effect they have on customers. If you are
making fundamental changes to approaches, you must regularly review the effect this has on customers
and be prepared to make changes if new approaches are not working.

A key part of monitoring will be to ask customers for feedback, and this can be done through interviews,
questionnaires, social media, feedback forms, email, and phone calls.

Be aware, new approaches can lead to:

➢ More/less funds for human resources

o this may lead to less customer service staff, or lower

quality staff

➢ More/less funds for communications

o customer hotlines may be understaffed

o response times may rise

➢ More/less funds for purchasing materials

o products and services may suffer because of this, which will directly impact the
customer experience

➢ More/less funds on customer areas – such as shop floors, eating areas, and payment
areas

o negative experiences can lead customers to think twice before doing business
with you again

➢ More/less funds for technology.

 P a g e | 53

Impact on colleagues
When new financial management approaches are introduced, there is often an adjustment process, in
which employees have to learn, accept and feel comfortable with new methods and strategies. This may
take some time, and you will need to account for this and for the impact that this is likely to have on the
organisation.

To improve the transition process, you should focus on clear and regular
communication with your employees. Communicating what changes are
expected and why those changes are happening, will improve their
chances of understanding and supporting any new approaches.

Often, it can be beneficial to publicise financial information within the

organisation to improve the engagement of employees – even if they have
no financial decision-making power. Doing this can make employees feel
involved with the organisation’s goals and overall activity, and show them
how their actions affect income and expenditure.
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Activity 3E
 P a g e | 55

3.6 – Present clear and logical recommendations for budget management

Presenting recommendations for budget management

It is important that you can present clear and logical recommendations for budget management, based
on review and analysis of current financial controls, and on research carried out.

To persuasively make a case for a particular approach or strategy, you will need to have clear evidence
to suggest why it will work.

Evidence can be broken down into the two categories outlined below.

Evidence of clear failures or weaknesses

Firstly, you must make a case for why change needs to happen, and this should focus on current
strategies and approaches which have proven to be inadequate.

Focus on any financial data (contained in financial documents) which shows:

➢ Poor estimations of costs and income

➢ Examples of overspending

➢ Examples of significant variances and deviations

➢ Examples of wastage

➢ Examples of poor funding allocation

➢ Examples of objectives and goals that have not been met because of poor control of
finances.

Evidence of the benefits associated with proposed changes

After making a case for change, you should look to supply evidence that certain strategies and
approaches are fit for adoption.

You should focus on backing up your recommendations by:

➢ Focussing on why proposed changes will work for your
organisation

➢ Using examples of how approaches and strategies have

worked in other organisations

➢ Presenting experts’ views as to why your

recommendations will work

➢ Showing how new approaches will benefit both customers and employees.
 P a g e | 56

Presenting evidence
The way you make recommendations and present evidence will depend on your organisation’s policies
and procedures, the company’s hierarchy, and who you have to persuade to make changes a reality.

You may need to present evidence to numerous other managers and key stakeholders, in order to
secure agreement for change; or you may just need to make your recommendations to one person
(usually a director or owner) who has overall decision-making power over any financial changes that are
made. It is important that you know who you need to persuade, so that you can tailor your evidence to
appeal to those parties.
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Activity 3F
 P a g e | 58

4. Complete financial and statistical reports

4.1. Complete financial and statistical reports within designated timelines

4.2. Prepare and present clear and concise information to enable informed decision making
 P a g e | 59

4.1 – Complete financial and statistical reports within designated timelines

Completing financial and statistical reports

It is important that you can create financial reports quickly and accurately when required.

Reports may be expected at regular intervals by owners, other managers, supervisors, and other key
stakeholders. The timely deliverance of reports will allow these parties to make decisions, based on the
most accurate and up-to-date information available.

You should be comfortable with creating:

➢ Trial balance

➢ Receivable reports

➢ Purchase summary reports

➢ Stock reports

➢ Variance reports

➢ Wastage reports

➢ Sales reports

➢ Supporting reports, such as covers, occupancy rates, staff costs and units sold

➢ Business activity statements

➢ Labour and wages reports

➢ Cash flow statements.

The financial report

A financial report contains all the relevant account documentation and reports that make up an
organisation’s financial records. This usually contains information from one financial year so the report
can be submitted at the end of the financial year for legal reporting requirements. An organisation also
needs to keep financial reports to evidence the organisation’s financial activities and for any obligations
to report financial activities to a board of directors or to shareholders.

An organisation may also choose to create a financial report more frequently, such as each quarter
period, for compiling financial information more frequently and for performing financial analysis, for
example, to track income and profit or losses.

Essentially a financial report will contain the following information:

➢ The income statement – to show revenues, expenses, profit and losses, this shows the
operational results of an organisation

➢ The balance sheet – to show the assets, liabilities and equity as it stands at the
reporting date, this provides information on the liquidity and capital of an organisation
 P a g e | 60

➢ The statement of cash flows – to show the cash inflows and outflows that occurred
during the reporting period

➢ Statement of retained earnings – to show any changes in equity, for example, sale of
stocks, dividend payments and changes caused by profit or loss.

The above is usual for the audited or reported financial statement; for internal purposes and use, a
financial statement may only contain the income statement and balance sheet. All submitted financial
reports will usually contain disclosure information as relevant to the business.

Information that is included in a financial report has been sourced from, ‘The four basic financial
statements’ at Accounting Tools: http://www.accountingtools.com/questions-and-answers/the-four-
basic-financial-statements.html (access date: 08.03.2017).

The statistical report

This type of report is compiled to assess particular areas of business so the organisation can become
informed and gain knowledge and understanding. Information is gathered together from applicable
sources so that things such as common factors or general outcomes can be analysed. This is about
assessing if activities have a positive or negative result for an organisation, or to identify potential
changes or risks in business.

In accounting, statistics help an organisation to make forecasts and to understand how financial
activities affect the overall financial position of the business.

Information in an accounting statistical report will include the relevant data that is gathered from a
particular area, for example, sales over the last quarter-period, and the variations in the information
that need to be understood. Variations will be the different manipulations made from the information,
such as identifying repeated customer sales, items over and under a certain amount, and sales on
different days of the week. These enable analysis to be made on specific elements.

The report will outlay the information for analysis, the analysis and results of this, conclusions of the
analysis and any recommendations that may be in the financial interest of the organisation.
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Activity 4A
 P a g e | 62

4.2 – Prepare and present clear and concise information to enable informed
decision making

Using information to inform decision-making

All financial decision-making relies on accurate and up-to-date information and data, so you must be
adept at preparing and presenting that data to ensure that it is clear, easy to understand, and available
when it is needed.

Information may include:

➢ Overall expenditure

➢ Expenditure in various departments

➢ Focus of expenditure

➢ Income from a range of sources

➢ Overall income.

Preparation and presentation

You should always look to present information so that is clear as possible, and so that conclusions can
be drawn easily. You may choose from a number of different formats to achieve this.

You may choose to present information and data in:

➢ Written summary reports

➢ Charts

o such as pie charts

➢ Graphs

o such as bar graphs

➢ Digital tables, where data is sortable.

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Activity 4B
 P a g e | 64

Summative Assessments
At the end of your Learner Workbook, you will find the Summative Assessments.

This includes:

➢ Skills assessment

➢ Knowledge assessment

➢ Performance assessment.

This holistically assesses your understanding and application of the skills, knowledge and performance
requirements for this unit. Once this is completed, you will have finished this unit and be ready to move
onto the next one – well done!
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Appendices
Accounting software
Software used in accountancy will depend upon the organisation that you work for. Dedicated software
packages are used to help capture financial data and display these in ways that are easy to view and
interpret, such as through the use of graphs and charts. They enable data manipulation and analysis to
be made in simple steps and with accuracy (avoiding potential situations of human error in making
handwritten reports and analysis).

Software available includes:

➢ MYOB

➢ QuickBooks

➢ Sage

➢ Xero.

Standard Business Reporting

The Australian Securities and Investments Commission (ASIC) use software known as the ‘Standard
Business Reporting’ (SBR) program. Organisations that use accounting/payroll software which s SBR-
enabled, can lodge their financial reports to ASIC in this way. This software program has been produced
by the Government and is administered by the Treasury. It uses pre-fill forms, removes unnecessary
duplication across its forms, and uses a single reporting language based on international standards and
best practice (XBRL format and also iXBRL for reading XHTML).

There is a secure online log-in known as AUSkey which enables designated users to report electronically
to all applicable agencies. In using this software, you will receive confirmation of your activities through
validation and receipt of reports.
 P a g e | 66

References

These suggested references are for further reading and do not necessarily represent the contents of
this unit.

Websites
Information that is included in a financial report has been sourced from, ‘The four basic financial
statements’ at Accounting Tools: http://www.accountingtools.com/questions-and-answers/the-four-
basic-financial-statements.html

All references accessed on and correct as of 08.03.2017, unless other otherwise stated.