This unit has application to job functions that have budget responsibility and may include accountants and departmental managers.

ELEMENT

PERFORMANCE CRITERIA

1. Prepare the budget

1.1. Budget objectives are confirmed and consistent with organisational aims, projects and forecasts

1.2. Cash, expenditure and revenue items are clearly defined and relevant to the identified objectives of the budget

1.3. Discussions and negotiations with stakeholders that the budget applies to are conducted in a manner that promotes goodwill and ongoing cooperation

2. Set the budget timeframe

2.1. Milestones and performance indicators are identified and included in the budget

2.2. Annual budgets are broken down into seasonal periods in accordance with operating trends

3. Document the budget

3.1. Data is presented in a format that is easily understood and appropriate to budget reporting

3.2. Reports are completed within timelines and distributed for specified periods and projects

Required skills

communication skills to:

determine and confirm work requirements, using questioning and active listening as required

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

literacy skills to:

read and interpret documentation from a variety of sources

read and interpret financial statements and reports

writing skills for preparing reports and recommendations, recording and classifying financial information

numeracy skills for financial calculations and analysis

information technology skills for setting up and analysing spreadsheets

estimating, forecasting and analysis skills

organisational skills, including the ability to plan and sequence work and meet organisational timelines

Required knowledge

principles of budgetary control

forecasting techniques

principles of double entry bookkeeping

principles of statistical analysis and measures of variance

organisational procedures and policies for financial administration

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 ability to:

apply knowledge of organisational policies and procedures

establish and confirm milestones and performance indicators

prepare budgets for a variety of purposes and organisations

accurately record and document budget reports.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

access to and the use of a range of common office equipment, technology, software and consumables.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

simulated tasks involving preparation of budgets from supplied data

verbal or written questioning on underpinning knowledge and skills which may include formal examinations

evaluating samples of work.

Guidance information for assessment

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.

Budget objectives may include:

annual planning

cost reduction

rolling forecasts:

next period

monthly

next year.

Expenditure and revenue items may include:

capital expenditure

client and supplier payments

sales

commissions

fees and charges

Goods and Services Tax (GST)

Pay As You Go (PAYG) tax

revenue producing expenditures

sales.

Stakeholders may include:

chief executive officers

clients

directors

financial institutions

suppliers.

Milestones and performance indicators may include:

compliance with scheduled payment dates

profits and losses

reports:

quarterly

half yearly

annually.

Data may include:

cash flow projections

fixed costs information

sales records and projections

variable business costs.

Formats and presentation methods may include:

explanations of calculations used

explanatory notes

graphics

highlighted estimates and projections

tables.

Reports may include:

cash budgets

purchase budgets

sales budgets

Statement of financial performance

Statement of financial position.

Unit sector

Accounting

This unit contains employability skills.