BSBFIM601A
Manage finances

This unit describes the performance outcomes, skills and knowledge required to undertake budgeting, financial forecasting and reporting requirements, and to allocate and manage resources to achieve the required outputs for the business unit. It includes contributing to financial bids and estimates, allocating funds, managing budgets and reporting on financial activity.No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement.

Application

This unit applies to people who have managerial responsibilities which include overseeing the management of financial and other resources across a business unit, a series of business units or teams, or an organisation.

It covers all areas of broad financial management. In a larger organisation this work would be supported by specialists in financial management.


Elements and Performance Criteria

ELEMENT

PERFORMANCE CRITERIA

1. Plan for financial management

1.1. Review and analyse previous financial data to establish areas which have generated a profit or loss

1.2. Undertake research to review reasons for previous profit and loss

1.3. Review business plan to establish critical dates and initiatives that will require or generate resources in next financial cycle

1.4. Analyse cash flow trends

1.5. Review statutory requirements for compliance and liabilities for tax

1.6. Review existing software and its suitability for financial management

2. Establish budgets and allocate funds

2.1. Use previous financial data to determine allocations for resources

2.2. Make informed estimates of new items for inclusion in budget

2.3. Prepare budgets in accordance with organisational requirements and statutory requirements

3. Implement budgets

3.1. Circulate budgets and ensure managers and supervisors are clear about budgets, reporting requirements and financial delegations

3.2. Manage risks by checking there are no opportunities for misappropriation of funds and that systems are in place to properly record all financial transactions

3.3. Review profit and loss statements, cash flows and ageing summaries

3.4. Revise budgets, as required, to deal with contingencies

3.5. Maintain audit trails to ensure accurate tracking and to identify discrepancies between agreed and actual allocations

3.6. Ensure compliance with due diligence

4. Report on finances

4.1. Ensure structure and format of reports are clear and conform to organisational and statutory requirements

4.2. Identify and prioritise significant issues in statements, including comparative financial performances for review and decision making

4.3. Prepare recommendations to ensure financial viability of the organisation

4.4. Evaluate the effectiveness of financial management processes

Required Skills

Required skills

communication skills to explain budgets and reporting requirements, and to deal with questions

mathematical skills to read and interpret budgets

technology skills to work with financial software.

Required knowledge

financial probity

principles of accounting and financial systems

relevant Australian, international and local legislation and conventions, such as:

bilateral or regional trade agreements

International Commercial Terms (INCOTERMS)

Trade Practices Act

Warsaw Convention

World Trade Organization determinations

requirements of the Australian Tax Office, including Goods and Services Tax, Company Tax, PAYG.

Evidence Required

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:

preparation of budgets which align with the business plan, use previous financial data and meet all compliance requirements

analysis of the effectiveness of existing financial management approaches

knowledge of the requirements of the Australian Tax Office.

Context of and specific resources for assessment

Assessment must ensure:

access to appropriate documentation and resources normally used in the workplace.

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:

assessment of written reports on financial systems and financial management

direct questioning combined with review of portfolios of evidence and third party workplace reports of on-the-job performance by the candidate

review of budgets prepared

oral or written questioning to assess knowledge of legislative requirements or the tax system

evaluation of documentation reviewing profit and loss statements, cash flows and ageing summaries

analysis of maintenance of audit trails

review of recommendations prepared to ensure the financial viability of the organisation.

Guidance information for assessment

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:

other units from the BSB60407 Advanced Diploma of Management.


Range Statement

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 data may include:

budgets, forecasts and variations

cash flow/profit reports

financial/operational statements and reports (e.g. expenditures and receipts, profit and loss statements)

market valuations

Organisational requirements may include:

financial analysis assessments

financial management manuals

legal and organisational policies, guidelines and requirements

occupational health and safety policies, procedures and programs

price and exchange parameters

quality assurance and/or procedures manuals

recording and filing systems

reporting requirements

standard financial analysis techniques

Statutory requirements may include:

delegated authorities

internal control procedures

limits on volumes and types of financial transactions

reporting of duty, excise and other overseas government charges

reporting periods

taxation and payment timings

Discrepancies may include:

absence of auditable trail

expenditure report mismatches

inappropriate authorisations

incorrect payments

incorrect report formats

unreconciled cash flows and operating statements

variances from budget and phasings

Format may include:

audits

balance sheets

cash flow statements

electronic forms

financial year reports

operating statements

spreadsheets

statutory forms

Issues may include:

cost structures

internal controls

losses and returns

profitability

statutory obligations

suppliers and markets

Recommendations may refer to:

cash flow

changes in business activity including markets, goods or services traded

consolidation

expenses and overheads

labour costs including decisions to move production to other locations or sites

loss

profit

write-offs


Sectors

Unit sector


Competency Field

Finance - Financial Management


Employability Skills

This unit contains employability skills.


Licensing Information

Not applicable.