- BSBSMB406A - Manage small business finances
Assessor Resource
BSBSMB406A
Manage small business finances
Assessment tool
Version 1.0
Issue Date: April 2024
This work is undertaken by individuals who operate a small business.
The unit is suitable for existing micro and small businesses or a department in a larger organisation.
This unit describes the performance outcomes, skills and knowledge required to implement, monitor and review strategies for the ongoing management of a small business's finances. It also includes day to day financial management of the small business.
Specific legal requirements apply to the management of a small business.
You may want to include more information here about the target group and the purpose of the assessments (eg formative, summative, recognition)
Employability Skills
This unit contains employability skills.
Evidence Required
List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package. | |
Overview of assessment | |
Critical aspects for assessment and evidence required to demonstrate competency in this unit | Evidence of the following is essential: development, implementation and review of strategies for the ongoing management of finance maintenance of day-to-day financial management of the business as well as implementation of broad financial strategies knowledge of purpose of financial reports. |
Context of and specific resources for assessment | Assessment must ensure: access to relevant documentation candidate's individual circumstances and work in the context of establishing or running a small business, are the basis for assessment. |
Method of assessment | A range of assessment methods should be used to assess practical skills and knowledge. The following examples are appropriate for this unit: portfolio of evidence including financial reports preparation and review of financial ratios review of cash flow projections analysis of development, monitoring and maintenance of client credit policies oral or written questioning to assess knowledge of principles for preparation of balance sheets and their interpretation. |
Guidance information for assessment | Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example: BSBSMB402A Plan small business finances BSBSMB405A Monitor and manage small business operations. |
Submission Requirements
List each assessment task's title, type (eg project, observation/demonstration, essay, assingnment, checklist) and due date here
Assessment task 1: [title] Due date:
(add new lines for each of the assessment tasks)
Assessment Tasks
Copy and paste from the following data to produce each assessment task. Write these in plain English and spell out how, when and where the task is to be carried out, under what conditions, and what resources are needed. Include guidelines about how well the candidate has to perform a task for it to be judged satisfactory.
|
Required skills |
analytical skills to interpret financial data communication skills to negotiate capital and to report on performance literacy skills to interpret legal requirements and financial reports numeracy skills to calculate costs, prices, profit and other financial information. |
Required knowledge |
The following knowledge must be assessed as part of this unit: benchmarking financial decision making relevant to the business financial indicators purpose of financial reports preparation and interpretation of budget/actual reports principles for preparation of balance sheets and their interpretation principles for preparation of profit and loss statements and their interpretation stock records/stock control relevant to the business. |
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included. | |
Financial plan may include: | analysis of sales by product/service, identifying where they were sold and to whom cash flow estimates for each forward period current financial state of the enterprise (or owner/operator) estimates of profit and loss projections for each forward period financial performance to date (if applicable) likely return on investment monthly, quarterly or annual returns non-recurrent assets calculations profit, turnover, capital and equity targets projected profit targets, pricing strategies, margins projections of likely financial results (budgeting) projections, which may vary depending on the importance of such information and the stage in the life of the business resources required to implement the proposed marketing and production strategies (staff, materials, plant and equipment) review of financial inputs required (sources and forms of finance) risks and measures to manage or minimise risks working, fixed, debt and equity capital working in conjunction with external consultants e.g. investment analysts, accountants, financiers |
Financial information may include: | accrual of staff leave/entitlements asset management strategies which may include: owning, leasing, sharing, syndicating maintaining and deploying assets asset registers balance sheets bookkeeping/accounting/stock/job costing records business activity statements business capital cash book cash flow forecasts financial budgets financial indicators, which may be short-, medium- and/or long-term payroll records, superannuation entitlements profit and loss statements ratios for profitability, liquidity/efficiency/financial structure risk management statements/forecasts taxation returns including goods and services tax |
Specialist services may include: | accountants business brokers/business consultants government agencies industry/trade associations lawyers and providers of legal advice mentors online gateways providers of training in accounting software |
Cash flow may include: | anticipated payments anticipated receipts customer credit policy/debt recovery taxation provisions |
Relevant people may include: | family members financial backers franchise agency owner/operator partners regulatory bodies trade or industry associations |
Financial backers may include: | financiers/banks/lending institutions leasing and hire purchase financiers providers of venture capital shareholders/partners/owners/family/friends |
Credit policies may include: | collateral credit limits credit references debt collection payment options proof of Indigenous identity trading terms |
Financial ratios may include: | current ratio days debtors outstanding days stock on hand expense percentages gross profit percentage liquid ratio net profit percentage proprietary/debt ratio return on investment/return on total assets staff productivity measures stock turn rates |
Copy and paste from the following performance criteria to create an observation checklist for each task. When you have finished writing your assessment tool every one of these must have been addressed, preferably several times in a variety of contexts. To ensure this occurs download the assessment matrix for the unit; enter each assessment task as a column header and place check marks against each performance criteria that task addresses.
Observation Checklist
| Tasks to be observed according to workplace/college/TAFE policy and procedures, relevant legislation and Codes of Practice | Yes | No | Comments/feedback |
|---|---|---|---|
| Identify financial information requirements and obtain specialist services, as required, to profitably operate and extend the business in accordance with the business plan | |||
| Produce financial budgets/projections, including cash flow estimates, as required for each forward period, and distribute to relevant people in accordance with legal requirements | |||
| Negotiate, secure and manage business capital to best enable implementation of the business plan and to meet the requirements of financial backers | |||
| Develop and maintain strategies to enable adequate financial provision for taxation in accordance with legal requirements | |||
| Develop, monitor and maintain client credit policies, including contingencies for debtors in default, to maximise cash flow | |||
| Select key performance indicators to enable ongoing monitoring of financial performance | |||
| Record and communicate financial procedures to relevant people to facilitate implementation of the business plan | |||
| Regularly monitor and report on financial performance targets and analyse data to establish the extent to which the financial plan has been met | |||
| Monitor marketing and operational strategies for their effects on the financial plan | |||
| Calculate and evaluate financial ratios according to own/industry benchmarks | |||
| Assess financial plan to determine whether variations or alternative plans are needed, and change as required |
Forms
Assessment Cover Sheet
BSBSMB406A - Manage small business finances
Assessment task 1: [title]
Student name:
Student ID:
I declare that the assessment tasks submitted for this unit are my own work.
Student signature:
Result: Competent Not yet competent
Feedback to student
Assessor name:
Signature:
Date:
Assessment Record Sheet
BSBSMB406A - Manage small business finances
Student name:
Student ID:
Assessment task 1: [title] Result: Competent Not yet competent
(add lines for each task)
Feedback to student:
Overall assessment result: Competent Not yet competent
Assessor name:
Signature:
Date:
Student signature:
Date: