This unit applies to any manager responsible for overseeing the financial operations of a small business, a department within a larger organisation or a complex project. It requires the application of highly developed planning and management skills underpinned by significant knowledge of financial management concepts.

Nil

ELEMENT

PERFORMANCE CRITERIA

1

Develop approaches to financial management.

1.1

Assess scope of financial management requirements for a given organisation or project.

1.2

Identify need for and organise specialist accounting assistance where appropriate.

1.3

Develop approaches to financial management based on overall direction and goals of the organisation or project.

1.4

Develop financial management systems and procedures according to organisation needs.

2

Develop and monitor financial procedures and systems.

2.1

Develop financial procedures and systems to meet relevant statutory and internal control requirements.

2.2

Communicate importance of financial objectives, management controls and systems to all staff.

2.3

Develop practical procedures and systems for monitoring income and ensuring payment of accounts.

2.4

Research and integrate the use of current industry practices and technology into systems where appropriate.

2.5

Check compliance with procedures and systems on a regular basis.

2.6

Monitor the flow of financial information within the organisation in terms of currency, accuracy, level of detail and relevance.

2.7

Review financial management systems regularly and make adjustments according to organisation needs.

3

Make pricing decisions.

3.1

Make pricing decisions based on current, sufficient, accurate and relevant financial and marketplace data.

3.2

Identify fixed, variable and semi-variable costs.

3.3

Perform and interpret simple cost-volume-profit analysis.

3.4

Set appropriate profit margins according to organisation policy and calculate prices correctly.

4

Monitor financial performance.

4.1

Monitor budgets against performance targets on a regular basis.

4.2

Negotiate corrective budgets to maximise business performance.

4.3

Take remedial action to address financial performance problems where appropriate.

4.4

Prepare and interpret profit and loss statements accurately with appropriate level of detail.

4.5

Conduct financial ratio analysis and apply the findings to financial management and reporting as appropriate.

4.6

Communicate feedback on positive and negative performance to appropriate colleagues in an appropriate manner.

5

Prepare financial reports.

5.1

Prepare accurate, concise, relevant and sufficiently detailed financial reports to schedule, in a format appropriate to the audience and according to organisation and statutory requirements.

5.2

Identify the need for and access specialist advice on reporting requirements where appropriate.

This section describes the essential skills and knowledge and their level, required for this unit.

The following skills must be assessed as part of this unit:

critical thinking and analytical skills to evaluate complex financial and other business information and develop appropriate management initiatives

planning and organisational skills to develop and implement systems and procedures for sound financial management within an organisation or project

literacy skills to interpret and develop information and documentation dealing with complex ideas, concepts and data

numeracy skills to interrogate and develop financial data, work with complex mathematical ideas and develop approaches to strategic issues such as pricing.

The following knowledge must be assessed as part of this unit:

different financial management roles for given industry sectors or types of business, including operational managers, owner-operators, financial controllers and external accountants or auditors

aspects of financial management to be considered for a given organisation or industry sector

ways in which financial management interrelates with all other areas of business activity

major steps in the total accounting process and relationship of each with business operations and reporting requirements

typical financial management systems and technology relevant to the organisation or industry sector, including features and capabilities of one or more computerised accounting packages

key features of and how to prepare the main financial reports used to monitor business performance, including:

profit and loss statements

balance sheets

sales and receivables reports

techniques for calculating profit margins relevant to a given industry sector

overview of specific financial and taxation regulations and requirements relevant to the industry sector, including how GST applies to different business operations and reporting requirements

overview of economic issues that affect financial performance in specific industry contexts.

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, the range statement and the Assessment Guidelines for this Training Package.

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the following is essential:

understanding of the total financial management process within a business

ability to integrate the financial management activities of a business into overall business operations

knowledge of financial control, reporting and monitoring systems

establishment and management of financial systems over a period of time so that the monitoring and implementation aspects of the unit can be assessed.

Context of and specific resources for assessment

Assessment must ensure:

project or work activities that include the use of figures and data that reflect the financial operating conditions of industry

use of industry-current technology for financial management.

Methods of assessment

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

evaluation of financial reports detailing financial performance of projects or activities conducted by the candidate

evaluation of financial management strategies produced by the candidate detailing systems and procedures for the management of given business operations or situations

case studies and problem-solving to assess application of financial management strategies to particular situations

review of portfolios of evidence and third-party workplace reports of on-the-job performance by the candidate.

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

Assessing employability skills

Employability skills are integral to effective performance in the workplace and are broadly consistent across industry sectors. How these skills are applied varies between occupations and qualifications due to the different work functions and contexts.

Employability skills embedded in this unit should be assessed holistically with other relevant units that make up the skill set or qualification and in the context of the job role.

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 in the performance criteria is detailed below.

Scope of financial management requirements for different projects or organisations will vary and may relate to differing requirements for:

budgeting and forecasting

reporting, including depth, regularity and nature of reports

control mechanisms

specialist financial skills.

Financial procedures and systems:

must address:

transaction recording

checking and reconciliation processes

banking procedures

invoicing

accounts payable and receivable

cash management and security measures

cash flow management

budget management

reporting requirements

GST and other taxation requirements

statutory requirements that apply to the specific business structure

sector specific requirements, such as the Travel Compensation Fund in retail travel

may cover:

stock control

financial responsibilities within an organisation or department.

Financial reports must include:

GST reports and business activity statements

cash flow statements

profit and loss statements

balance sheets

reconciliations.

Sector

Cross-Sector

Finance

The required outcomes described in this unit of competency contain applicable facets of employability skills. The Employability Skills Summary of the qualification in which this unit is packaged will assist in identifying employability skills requirements.