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Elements and Performance Criteria

1. Prepare budget information.
   • Determine and confirm scope and nature of required budgets.
   • Identify, access and interpret data and data sources required for budget preparation.
   • Analyse internal and external factors for potential impact on budget.
   • Provide opportunities for colleagues to contribute to budget planning process.
2. Prepare budget.
   • Draft budget based on analysis of all available information.
   • Estimate income and expenditure and support with valid, reliable and relevant information.
   • Reflect organisational objectives within draft budget.
   • Assess and present options and recommendations in a clear format.
   • Circulate draft budget to colleagues and managers for input.
3. Finalise budget.
   • Negotiate budget according to organisational policy and procedures.
   • Agree on and incorporate modifications.
   • Complete final budget in a clear format within designated timelines.
   • Inform colleagues of final budget decisions and application within relevant work area, including reporting and financial management responsibilities.
4. Monitor and review budget.
   • Regularly review budget to assess actual performance against estimated performance and prepare accurate financial reports.
   • Incorporate all financial commitments into budget and budget reports.
   • Investigate and take appropriate action on significant deviations.
   • Analyse changes in internal and external environment and make necessary adjustments.
   • Collect and record relevant information to assist in future budget preparation.

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:

prepare a budget for a business that meets the specific business’ needs

demonstrate the following when preparing the above budget:

consultation on components

analysis of factors that impact on the budget

completion of draft and final versions of budget within designated timelines

monitor and review the above budget against performance over its life cycle.

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Knowledge Evidence

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

types of budgets:

cash budgets

cash flow budgets

departmental budgets

event budgets

project budgets

purchasing budgets

sales budgets

wage budgets

whole of organisation budgets

budget terminology

specific industry sector and organisation:

role and nature of budgets

budget formats, budget performance and financial reports

financial reporting procedures and cycles

features and functions of accounting software programs used to prepare and monitor budgets

internal and external factors that impact on budget development:

growth or decline in economic conditions

human resource requirements

new legislation or regulation

organisational and management restructures

organisational objectives

scope of the project

shift in market trends

significant price movement for certain commodities or items

supplier availability and cost

budget preparation and monitoring practices and techniques:

sources and contents of data required for budget preparation:

competitor research

customer or supplier research

declared commitments in areas of operation

financial information from suppliers

financial proposals from key stakeholders

income and expenditure for previous time periods

departmental, event or project budgets

grant funding guidelines or limitations

management policies and procedures

organisational budget preparation guidelines

performance information from previous periods

techniques for making budget estimates

common reasons for deviations and budget deviation management.

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