Reference no: EM133845372 , Length: word count:7800

Prepare and monitor budgets

Assessment Task 1: Knowledge questions

Questions
Provide answers to all of the questions below.

Question 1: Describe the purpose of each of the following budgets:

Budget type Purpose

• Cash budget
• Cash flow budget
• Departmental budget
• Project budget
• Purchasing budget
• Sales budget
• Wages budget
• Organisation wide budget.

Question 2: Define each of the following budget terminology.

Budget type terminology Definition

• Budget variance
• Balanced scorecard
• Financial forecast

Question 3: Describe why companies may choose to develop budgets.

Question 4: Explain the use of electronic spreadsheets in developing budgets and give two of their key features.

Question 5: List five ways to improve cash inflow and give examples.

Ways to improve cash inflows Example

Question 6: Identify and explain three types of financial statements and their purpose.

Question 7: Describe the type of entity that is required to have financial reports audited.

Question 8: Explain three key principles relating to the management of a chart of accounts.

Question 9: Explain the purpose of a profit and loss statement and give two of its key features.

Question 10: Explain the purpose of financial reporting procedures.

Question 11: List two common reporting cycle periods for financial reporting.

Question 12: For the listed accounting software, describe two key features and two functions of the accounting software.

Accounting software Features Functions

• Xero
• MYOB

Question 13: Explain how each of the factors below impact on budget development.

Factors Impact

• 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

Question 14: Explain how each of the data below can assist in preparing a budget

Data How the data is useful for preparing a budget.

• 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
• performance information from previous periods

Question 15: Explain the importance of each of the following budget preparation practices

Practice Importance

• management policies and procedures
• organisational budget preparation guidelines

Question 16: Describe two techniques for making budget estimates.

Question 17: Explain the concept of budget deviation management.

Question 18: Give three common reasons for deviations from budgets.

Assessment Task 2: Budget planning project

Activities
Complete the following activities.
Carefully read the following information.

Blue Healer is a health resort and convention centre based in the Blue Mountains near Sydney which has been operating for 5 years. The resort, Blue Healer, is made up of five areas: catering, spa, meeting rooms accommodation, and administration.
Blue Healer is very popular due to its competitive pricing structure, quality service and state of the art facilities.
The resort was set up by Paul Byrnes, a burnt out consultant who wanted to provide a service for corporate executives to retreat from their business for at least a short time. Paul had a lot of networks and to date most of the business has been from Paul's existing networks and word of mouth referrals. The business has a functional web site.
Sales continue to increase but Paul wants to retire completely and step back from the business. Thus, he has hired a Resort Manager to oversee the business (you). An important aspect of the business that he wants the Resort Manager to focus on is preparing and monitoring budgets. Get top-rated assignment assistance now!
Current staff include: an Accounts and Administration Manager, Resort Supervisor, Housekeeping staff, receptionist and contract therapists.
Profit and loss reports show the status of the business' financial health.
What do I need to demonstrate?
During your practical assessments you will be required to demonstrate a range of the skills and knowledge that you have developed during your course. These include:
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 relevant personnel to contribute to budget planning process.
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.
Finalise budget
Negotiate budget according to organisational policies 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.
How will I provide evidence?
Your assessor will provide you with templates to complete each task. You will find some detailed information about providing evidence; this will include;
an email to CEO regarding budgets
a Marketing Budget Briefing Report
an email with Draft Marketing Budget attached
a Final Marketing Budget.
You will need to complete each activity and submit the required task at the end of each step completed.
Tips for completing your activities
Read through this assessment and each task before you get started and make sure you understand what you need to do. If you are unsure, speak to your assessor and/or supervisor.
Stay up to date!
Stay in touch with your assessor. Ask questions, raise issues, check in, communicate.
Most importantly, ask for help if you are having trouble!

1. Determine and confirm scope and nature of the budgets.

In your new role, the first step you need to take is to determine the scope and nature of all of the budgets that need to be prepared for Blue Healer.
Draft an email to send to Paul to find out this information. Ensure your email includes questions that will provide all of the information you need to know, as well as identifies internal data sources that you need to access.
Paul Byrnes (your assessor) will answer your email so that you are able to move ahead with developing the required budgets.

2. Develop a Marketing Budget Briefing Report.

As per the response provided to you, you are to focus on developing a Marketing Budget Briefing Report.
Use Marketing Budget Briefing Report Template to develop your report.
Review profit and loss for previous financial years to identify amounts spent on marketing for the previous two financial years, as well as the information provided to you by Paul
Identify at least two sources of information on recommended marketing expenditure that could be used to inform the marketing budget.
In addition, identify external factors that could impact on the marketing budget. This means that you should conduct market research on trends within the industry in terms of growth and opportunities and the types of marketing that similar businesses are conducting.

3. Send an email to the CEO and Accounts and Administration Manager (your assessor)

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
It should introduce and summarise the contents of the attachment.
Attach your Marketing Budget Briefing Report to the email.
Ask for input on your Marketing Budget Briefing Report. The CEO and Accounts and Administration Manager (your assessor) will provide you with feedback for input into your budget.

4. Draft Marketing Budget.

You are required to draft a Marketing Budget based on your Marketing Briefing Report and the input provided from the CEO and Accounts and Administration Manager (your assessor).
To develop the Marketing Budget, you should use the accounting software used by your COLLEGE.
Save this document as draft Marketing Budget and send it via email to the CEO and Accounts and Administration Manager (your assessor). Your email should clearly outline the options for marketing expenditure as per your marketing budget, as well as your recommendations for the budget.
You will discuss your draft budget at a meeting with the CEO and Senior Managers. Your assessor will advise you of the date of the meeting.

5. Participate in a budget meeting.

The next part of the assessment requires you to participate in a meeting with the CEO (role-played by your assessor) and the Accounts and Administration Manager (role-played by another student to discuss the marketing budget. At the meeting, the CEO will attempt to negotiate another option for the budget. You are required to demonstrate your negotiation skills to persuade the meeting participants that your budget is the best option.
At the meeting, you will need to:
Explain the marketing budget you have developed and the various options.
Seek input on the budget.
Negotiate for your budget as presented.
During the meeting, you will need to demonstrate effective communication skills including:
Speaking clearly and concisely
Using non-verbal communication to assist with understanding
Asking questions to identify required information
Responding to questions as required.

6. Revise the marketing budget.

Following the meeting, revise your marketing budget to incorporate feedback from the CEO and Accounts and Administration Manager.
You are to revise your marketing budget and send it out as Final Marketing Budget within 2 days of holding the meeting. You will be assessed on meeting this timeline.
Save this document as Final Marketing Budget and send it out via email to the CEO and Senior Managers.
The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
It should introduce and summarise the contents of the attachment.

7. Meet with colleagues to discuss the marketing budget.

The final part of the assessment requires you to meet with colleagues to confirm the Marketing Budget for the year.
You are also required to introduce the team to the company's Finance Policies and Procedures. This is to ensure that they understand financial management responsibilities and reporting arrangements so that the marketing budget can be accurately implemented and monitored.
These requirements form part of the company's requirements for finalising budgets.
At the meeting, you will need to:
Discuss the overall budget allocation for marketing
Discuss the amounts allocated to each marketing activity
Provide an outline of the Finance Policies and Procedures.
During the meeting, you will need to demonstrate effective communication skills including:
Speaking clearly and concisely
Using non-verbal communication to assist with understanding
Asking questions to identify required information
Responding to questions as required.
Using active listening techniques to confirm understanding.

Assessment Task 3: Budget monitoring and review project

Activities
Complete the following activities.
Carefully read the following information.

Assume it is twelve months later and you are reviewing the marketing budget against actual amounts using the Marketing Expenditure Report.
Note: that the company deems a standard variance in budgets of up to 5% acceptable.
You have also been recently informed that a competitor has set up a resort in the nearby area and you are required to assess how this will impact the marketing budget for the following year.
What do I need to demonstrate?
During your practical assessments you will be required to demonstrate a range of the skills and knowledge that you have developed during your course. These include:
Monitor and review budget
Regularly review budget to assess actual performance against estimated performance
Prepare accurate financial reports.
Incorporate all financial commitments into budget and budget reports.
Investigate and take appropriate action on deviations.
Analyse changes in internal and external environment and make any required adjustments.
Collect and record relevant information to assist in future budget preparation.
How will I provide evidence?
Your assessor will provide you with templates to complete each task. You will find some detailed information about providing evidence; this will include;
a Marketing Budget Performance Report
a Marketing Budget Analysis and Recommendations Report.
You will need to complete each activity and submit the required task at the end of each step completed.
Tips for completing your activities
Read through this assessment and each task before you get started and make sure you understand what you need to do. If you are unsure, speak to your assessor and/or supervisor.
Stay up to date!
Stay in touch with your assessor. Ask questions, raise issues, check in, communicate.
Most importantly, ask for help if you are having trouble!

1. Develop a Marketing Budget Analysis and Recommendations Report.

Review the marketing budget expenditure to assess actual performance against estimated performance.
Based on your review and using the accounting software, prepare a report that shows actual expenditure against budgeted expenditure. Include graphs to make your report clear.
Save this report as Marketing Performance Budget Report.
Prepare an accompanying report, Marketing Budget Analysis and Recommendations Report, that analyses:
Projected budget and actual budget
Deviations from the budget
Reasons for deviations
Recommendations for next year's budget based on marketing performance and new competitor.
Use the Marketing Budget Analysis and Recommendations Template to guide your work.

2. Send an email to management.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
It should introduce and summarise the contents of the attachments.
Attach the following to your email:
Marketing Budget Performance Report
Marketing Budget Report Analysis and Recommendations