20210702 SITXFIN004 Student Assessment Task_ ON KIU LEUNG

docx

School

Australian Institute of Higher Education *

*We aren’t endorsed by this school

Course

COOKERY

Subject

Management

Date

Jan 9, 2024

Type

docx

Pages

Uploaded by CorporalEnergy11260

SITXFIN004 PREPARE AND MONITOR BUDGETS Student Assessment Task Student Name ON KIU LEUNG Student Id SLB2000178 Course Diploma of Hospitality Management . Salisbury College Australia V1.0 Page |16 RTO:45062 | CRICOS:03565E

SITXFIN004 PREPARE AND MONITOR BUDGETS ASSESSMENT TASK 1 Written Questions This assessment task consists of 22 questions. You may use reference material to assist you such as texts and the internet, but you must correctly reference your information. You must answer all questions correctly and in accordance with the instructions given. Answers should between 50 to 100 words for each question: 1. Briefly describe each of the following types of budgets: Cash budgets Cash budgets are an estimation of the cash that comes into and goes out of your business. Its main purpose is to track whether the business has a sustainable cash income to allow them to fulfil regular operations Cash flow budgets A cash flow budget is sued to predict what cash your business will have available for expenses over a nominated period, which is usually 12 months. Departmental budgets A departmental budget is a tool that can project the income and expenses of a department within the organisation in order to achieve its financial goals. Event budgets Event budget will need to cover all aspects of the event, which means everything you will need for the event will need to be covered. Project budgets A project budget is used to estimate and track the costs that a project will require to operate and meet its goal. Purchasing budgets The purchasing budget is used to determine how much stock a business must purchase to be able to supply the amount of stock needed to meet customer orders during the budget period. Sales budgets The sales budget is similar to, and often runs alongside, the purchasing budget. It shows the expected sales that the business will make over a period of time in a monetary value and an estimated quantity of units sold. Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |2

SITXFIN004 PREPARE AND MONITOR BUDGETS Wage budgets The wage budget is created to estimate the cost to the organisation from paying employee wages. This budget is an important one to create as it shows the amount of cash flow that is being placed into wages, and compared to the income of the business, will determine whether wage reductions, increases, or more or less staff are required. Whole of organisation budgets A whole of organisation budget is one where all of the operations and departments’ income and expenditure are budgeted for in a single plan. Reference: Learning Guide P17-20 2. Identify the following specific industry sector and organisation: Budget formats Hospitality and tourism have the flexible budgeting, A flexible budget is prepared to show figures at various levels of the business A line-item budget lists, in vertical columns, each of the city’s revenue sources and each of the types—or classes—of items the city will purchase during the fiscal year. a program budget displays a series of “mini-budgets,” which show the cost of each of the activities that city departments perform Performance budgeting is the same as program budgeting, except that one additional component— performance—is included to tie expenditures for each program to specific goals established for that program. Zero-based budgeting is a system that requires all departments to defend their programs and justify their continuation each year. Budget performance A performance budget is one that reflects both the input of resources and the output of services for each unit of an organization. The goal is to identify and score relative performance based on goal attainment for specified outcomes. The financial reporting cycle is a series of procedures in the collection, processing, and communication of financial information. Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |3

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

SITXFIN004 PREPARE AND MONITOR BUDGETS Financial reports, reporting procedures and cycles The financial reporting cycle is a set of steps that are repeated in the same order every period. The culmination of these steps is the preparation of financial statements Features and functions of accounting software programs used to prepare and monitor budgets There are many types and brands of accounting software out there. Each will have various features and functions that you will need utilise during the operation of the software. Features such as: Reporting & Analysis, Graphics, Automation, Automatic updates, customisation, internet connectivity Reference: Learning Guide P62-77 3. Describe each of the following internal and external factors that impact on budget development Growth or decline in economic conditions Economic growth may allow for hiring new staff, larger spending on products, larger turnover for the company, etc. Economic decline may result in staff cut backs, product price increases, voiding of entire product lines due to expenses, etc. Human resource requirements The human resource requirements of the organisation can and will impact on budget development by increasing or decreasing overall labour expenditure. If the organisation requires more human resources, you will need to ensure that this is accommodated for in the budget. New legislation or regulation New legislations and regulations can impact on budget development. This is an external factor and can change current policies and procedures, pay rates, etc. Organisational and management restructures Organisational and management restructures are internal factors that impact on budget development. With management or organisational restructures come new ideas, changes in procedures, new projects or even expansions. Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |4

SITXFIN004 PREPARE AND MONITOR BUDGETS Organisational objectives Organisational objectives are another internal factor that can impact on the budget development. The objectives impact in a similar way to restructuring, by needing funds allocated to new objectives and goals. Scope of the project Project scope is an internal factor that can impact on the development of the budget. Project scope is the part of project planning that involves determining and documenting a list of specific project goals, deliverables, tasks, costs and deadlines. Shift in market trends A market trend is a perceived tendency of financial markets to move in a particular direction over time. This is an external factor that impacts on budget development by needing a reallocation of funds to or from the organisation. Significant price movement for certain commodities or items A significant price movement is an external factor that is dependent on the organisation and the amount you purchase of that commodity or item. Supplier availability and cost Supplier availability and cost are external factors that affect budget development. This happens in various ways, however the most common is that when a supplier cannot supply a product or if they are not available to supply a product the organisation will have to source the product elsewhere. This often results in a price change, in most cases an increase. Reference: Learning Guide P29 - 31 4. Identify and discuss the following budget preparation and monitoring practices and techniques a) Sources and contents of data required for budget preparation, including: Competitor research Competitor research is a key activity for businesses to enable them to know what their competitors are doing in regards to budgeting and positioning themselves in the market. Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |5

SITXFIN004 PREPARE AND MONITOR BUDGETS Customer or supplier research Researching your customers and suppliers is a great way to gain information that is useful for some of your budgets. Supplier research will give you an insight into what products are becoming more popular and which ones are becoming harder to source, along with other great benefits. Declared commitments in areas of operation When preparing the budget, you will need to look at any declared commitment that your organisation has throughout its areas of operation. This means that you will need to consider any upcoming events or operations that will affect the budget, either through income, expenditure, human resource consumption, etc. Financial information from suppliers Financial information from suppliers might include their knowledge of upcoming fluctuations in prices, potential shortages in products, or even their inability to supply or provide a service at a specific point in time. Financial proposals from key stakeholders Stakeholders within the business will need to be consulted and any financial propositions will need to be taken into account during budget preparations. Stakeholders may have knowledge of future organisational plans, previous decisions on budgets that didn’t work, projects or ideas for growth, marketing ideas, advertisement costs, etc. Income and expenditure for previous time periods An important factor in preparing a budget is your income. When preparing a budget, you will be required to source the net income and the gross income. Departmental, event or project budgets When preparing a budget for an organisation you must consider the already prepared or proposed budgets for each department, event or project. These will help determine the overall budget needs. Grant funding guidelines or limitations When preparing a budget, you will need to take into account any grants or funding that your organisation receives and you will need to have knowledge about and accommodate for any guidelines, limitations, rules and restrictions that are associated with them. Management policies and procedures You will also need to take into account the management policies and procedures that your organisation has in place. These will differ for each company but will be in the organisational policies and procedures manual. Organisational budget preparation guidelines Your organisation will also have in their policies and procedures manual guidelines for the preparation of the budget. In most cases these guidelines will go through the entire budget preparation process, including, but not limited to; what you need to include in your budget, templates you are required to use, Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |6

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

SITXFIN004 PREPARE AND MONITOR BUDGETS formatting and style guides, stakeholders that must be consulted, timelines for budget preparation, and ways to communicate and distribute the budget. Performance information from previous periods Previous budgets can be an invaluable resource to use when preparing a budget. You will be able to see what was included in the last budget period, the amounts that were budgeted for, any grants that were used, any events or projects that happened, other departments in the organisations that were budgeted for, etc. b) Techniques for making budget estimates? c) Common reasons for deviations and budget deviation management? Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |7

SITXFIN004 PREPARE AND MONITOR BUDGETS Assessment Task 2 Practical activity The following task must be demonstrated in an operational tourism, travel, hospitality or events environment where financial transactions are processed with access to customers, this may be an industry workplace with real clients, or a in SCA simulated environment with individuals who participate in role plays or simulated activities. Submission requirement:  prepare a budget for a business that meets the specific business’ needs, and monitor and review the budget against its performance over its life cycle. Required: You will require access to and the use of:  Computers, printers and accounting software packages  Financial and operational data and reports used to prepare budgets  Others with whom you can discuss and negotiate draft and final budget components with; these can be:  Those in an industry workplace who are assisted by the individual during the assessment process  Individuals who participate in role plays or simulated activities, set up for the purpose of assessment, in a simulated industry environment operated within a training organisation Assessment Criteria: For this task you are to prepare a budget for a business that meets the specific business’ needs, and monitor and review the budget against its performance over its life cycle. You will need to perform each of the following steps to prepare the budget information:  Determine the scope and nature of budgets that are required and confirm with relevant personnel. Scope of the budget  An estimate of anticipated revenues from all sources.  An estimate of cash available  An estimate of proposed expenditures necessary for the company  The expenditures necessary for debt service. Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |8

SITXFIN004 PREPARE AND MONITOR BUDGETS  The proposed capital expenditures and methods of financing such expenditures.  An estimate of the amount required to be raised from an ad valorem property tax levy, and  The balance between total estimated expenditures and total anticipated revenues, including surpluses. The nature of a budget is to determine how to spend the money. The aim is to choose the right planning method to accurately distribute resources. A budget also known as a financial plan involves costs and learning for a specific period. A financial plan is a rundown of the costs you will make and the amount of money you will use. Financial Legislati on (Acts and Regulati ons) - Government Sector Finance Act  Identify and document the data and data sources required for the budget preparation. All kinds of sales – cash sale, credit sale all the sales to identify and prove the business.  Access and interpret the data required for the budget preparation. Document the interpretation. You need to document all the sales and figures for the business in order to get the budget preparation running.  Identify and analyse any internal and external factors that may potentially impact on the budget. Document the analysis. Employees are vital to business success. But there are risks associated with them. For an industry, strike action could lead to a lot of problems Employee strength is also an essential internal business factor. We will have to check if the employees are motivated, industrious, and talented. They will produce better results than an unmotivated and less talented workforce. Processes Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |9

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

SITXFIN004 PREPARE AND MONITOR BUDGETS and relationships between and within departments can also improve effectiveness and efficiency. Another factor to consider is innovation. This company needs innovation to keep up with competitors and to increase the number of customers. It is essential to take a step forward. The innovation could come in the form of marketing. It could also be through promotional initiatives in the marketing plan, staff training and wellness. Embracing new technologies is the best way to keep up with technological advances. The economy, politics, competitors, customers, and even the weather are all uncontrollable factors that can influence an organisation’s performance. Although external factors such as changes in government policies are sometimes unexpected, this does not mean that you cannot prepare to deal with them. The most effective way for a company to prepare to be flexible and adaptive is to develop a framework for conducting an environmental scan.  Consult with and provide opportunities for colleagues to contribute to budget planning process. When you create the budgets, you will need to share the information with other colleagues, managers or supervisor to seek for feedback and adapt changes to create the budget for the business. Complete the following steps to prepare and draft the budget within the designated timelines:  Draft the budget based on your analysis of all available information.  Estimate the income and expenditure of the business, and support this estimate with valid, reliable and relevant information. Document the estimation and support.  Ensure to reflect the organisational objectives within the draft budget. Document the reflection.  Assess all relevant options and recommendations, and present them in in a clear format.  Circulate the draft budget to all colleagues and managers for input. Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |10

SITXFIN004 PREPARE AND MONITOR BUDGETS Organise the policy and procedures to maintain the budget How do you communicate with your colleagues to seek for feedback. We need to organise a meeting, send the information to them, discuss with them and get the information from them and reports. Perform each of the following steps to finalise the budget within the designated timelines:  Follow organisational policies and procedures to negotiate the budget with relevant personnel.  Agree on modifications with relevant personnel, and incorporate them into the budget.  Complete the final budget in a clear format and within the designated timelines.  Inform colleagues of the final budget decisions and their applications within all relevant work areas, including informing them of new or changed reporting and financial management responsibilities. Once you have developed your budget, you will need to complete the following steps to monitor and review the budget against performance over its life cycle:  Review the budget on a regular basis to assess the actual performance against the estimated performance. We will review the budget quarterly in a year.  Prepare accurate financial reports. We will prepare the financial report at End of the year  Incorporate all financial commitments into budget and budget reports. When we create the budget, there are commitments to follow, if we meet the budget which means we fulfill the commitments then we create a report base on the commitments.  Investigate and take appropriate action on identified significant deviations. Go through individual section to look at the variances, looking into why we are not meeting the budget, why it is up/ down and we try to change the problem.  Analyse any changes in the internal and external environment, and make any necessary adjustments. Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |11

SITXFIN004 PREPARE AND MONITOR BUDGETS If we need to make any adjustment, we need to aim for the variations and target it from there  Collect and record all relevant information to assist in future budget preparation activities. We create documentation and we keep it in our record and use it in the future. Salisbury College Australia RTO:45062 | CRICOS:03565E V1.0 Page |12

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

20210702 SITXFIN004 Student Assessment Task_ ON KIU LEUNG

Related Documents