Certificate IV in Commercial Cookery SIT40516 SITXFIN003 Manage finances in a budget Comprehensive Project Student Instruction Guide Each student must read and adhere to each instruction listed below....

SITXFIN003 MANAGE FINANCES WITHIN A BUDGET
SITXFIN003 MANAGE FINANCES WITHIN A BUDGET
Certificate IV in Commercial Cookery SIT40516
SITXFIN003
Manage finances in a budget
Comprehensive Project
Student Instruction Guide
Each student must read and adhere to each instruction listed below. If you are unsure of any of the items listed, contact your trainer, assessor or student administration for assistance.
The following assessment instructions must be adhered to:
    1. Make sure you have read the Learner Guide and accessed the required text (hard copy or digital) prior to commencing and completing any of the questions and activities in this Comprehensive Project.
2. If you are unsure of the requirements of a question, activity or project – please contact your trainer for clarification. Reasonable adjustment options are available however this must be arranged with the Training Department prior to assessment.
3. You must ensure that you have attempted and completed all assessment tasks; written questions, case studies, activities and projects in the Comprehensive Project prior to submitting this for marking.
4. You are required to submit your completed assessment to the Training Department administration department. Please attach a cover sheet prior to submission.
5. Written responses
Written questions require in-depth responses and one line answers may not be sufficient to be deemed satisfactory. There is no specific word count required for any assessment and the size of the answer boxes in the Comprehensive Project are not indicative of the required length of your answers.
6. A general rule of thumb is to use as many words as you need in order to demonstrate your full understanding of the knowledge and/or skill component. This may differ greatly between candidates in line with varying individual language and literacy skills. Ensure you answer all questions.
7. When conducting online research
You must always provide the website link/s when sourcing information from online sources such as academic journals, industry websites and resource centers.
8. Referencing
Ensure your work is referenced to prevent plagiarism. For more information on plagiarism and referencing, refer to the Student Handbook.
9. Assessment naming protocol
Prior to submission, your Comprehensive Project must comply with the assessment name protocol below. This should be placed as a “footer” in your assessment.
10. The file name must follow this format: your full name_unit code
11. You must not delete or alter any sections or wording in the learner workbook.
12. All of the above items must be adhered to. Failure to do so will result in your work being returned to you, delaying the marking of your assessment.
    Background:
As a finance manager in your company you are responsible for the budget management where others may have developed the budget. Your responsibilities include:
1. Ability to interpret budgetary requirements, allocate resources, monitor actual income and expenditure, and report on budgetary deviations.
2. You will be required to monitor the budget for the organisation over a 3 month period
3. Monitor income and expenditure and evaluate budgetary performance over the above budgetary life cycle.
4. Complete financial reports related to the above budget within designated timelines and using correct budget terminology.
5. Demonstrate knowledge skills required to complete the above listed responsibilities.
SITXFIN005 Manage finances in a budget
PART 1: Introduction into the organisation
You are required to gather information from your company or an organisation familiar to you with regards to their physical asset management procedure and the implementation thereof. You may be required to do further research to answer the questions. Research answers online or using the Leadership and Management books available at Meridian Vocational College.
This assessment is in digital format.
Information about the company:
    a. Name of the company
    Walmart Inc.
    b. Industry in which the company operates
    Retail Business
    c. Address and contact details of the company
    702 S.W. 8th Street
Bentonville, Arkansas
    d. Brief overview of the company and your responsibilities
    
PART 2: Theoretical concepts
    1. List 3 reasons funds are allocated as per budget.
    1
    A Budget envisages the goals of the organization and the allocation of funds for the expenditure as per the estimated revenue. Keeping the broader picture funds is allocated.
    2
    Funds are expensed only for the allocated line of business, as master budget is approved by the management before floating thru the bottom level.
    3
    Allocating the funds as per the budget, allows et monetary target on each financial activity. Funds are allocated only for the approved activities of the business.
    2. What must you do when there are changes to the budget? Answer in 40-50 words.
    1. When there is a change to the budget, refer to the project plan how it looks after the changes and before the changes. Is the change in line with the organizational goals and can it be accommodated within the budget.
2. As the budgets are finalized after considering the cost and benefit analysis, we need to carefully consider the additional cost or any changes in budgeted revenue.
3. There are flexible budgets which can accommodate changes in volume or minor activity which increases the revenue, but major changes are only possible with the approval of Board of members or the highest authority in the organization which takes the budget decisions.
    3. Your budget allows only a limited amount of funding for wages. Who needs to know about these types of resource decisions? Explain in 40-50 words
    1. Finance and the Human Resources are the two departments which need to know about the fund constrain or limited funds for the wages.
2. As the resources are responsible for the performance and profitability of the project or the organization, operations manager should also be informed at the later stage when the resources are being hired about the limited funds of the company.
3. While designing the salary structure Finance and HR should also consider the employee turnover because funding limit on wages paid.
    4. List &explain 3 ways you can promote the importance of budget control within your team?
    1
    Budget is always compared with the actual, there will be continuous comparison to stay within the budget or stay within the monetary limit.
    2
    As Budget is designed keeping in view the organizational goals in mind, budgetary controls acts as a check point for the tasks performed.
    3
    Budgetary controls are needed to perform the tasks more efficiently and effectively.
    4
    Budgetary controls acts as a regulatory mechanism for the performance for the department in particular and organization at large.
    5. Explain in short the information the below for each of the reports used for resource allocation.
    Reports
    Type of information
    Profit and loss (or income) statements
    Considers total business revenue and business expenses for the particular period and arrive at the business profit or loss.
In short it contains Revenue, Cost of Goods Sold, Gross Profit, Operating Expenses, Operating Income , and arrives at the Net Profit.
    Balance sheets
    Balance Sheet depicts the solvency of the company. Also termed as Statement of Financial Position at a particular date. Contains Assets of the business, debts of the business, component of equity – retained earnings and common stock.
    Purchasing documentation
    Document to procure materials and services used by the purchase department. Contains vendor details, materials details like quantity, quality of material, this is part of supply chain management.
    Payroll documentation
    Number of Employees in the organization, date of joining, designation, location of their service, salary structure, deductions from the salary and net pay.
    Bank account records
    A/c number of the company, type of account, operating details, authorising persons signatory, if it is a CC/ OD account monetary limit of operation, collateral if any.
    Business agreements
    Each agreement is differs as its purpose and scope. There are common details which are mandatory. Purpose of the agreement, scope of the agreement , duration of the agreement, monetary details and jurisdiction in case of disputes.
    6. List the financial records you can use to regularly check income
    1
    Sales Invoice – Products Sales & Services
    2
    Interest Certificates - Interest and Dividends earned by the Company
    3
    License Agreements – Product Licensing.
    4
    Rental Agreements – Rent received by the company.
    5
    Credit note – contra revenue
    6
    POS System Direct Sales / Web Sales / Channel or Indirect Sales ( thru agents)
    7
    Consignment Agreement - Consignment sales
    8
    Royalty Agreement – Royalty Income
    9
    Franchisee Agreement – Income from Franchisees
    7. Why are financial commitments shown in a budget? Explain in 40 to 50 words
    Financial commitments in the budget are future business expenses that are due on a definite day like rent, salary, insurance and mortgage. Financial commitments are part of the budget, at times it is small amount but, if we miss business will at stake as these are important commitments for running the business. Funds for these commitments needs to be made on priority basis.
    8. Why is it important to investigate budget deviations? Explain in 40-50 words
    1. Deviations may be because of errors, scope change, or incomplete projects or unfulfilled business commitments/ incomplete work.
2. Deviations may be from the unplanned expenditure / purchase.
3. Deviations may be because of the new entrant or change in the market condition.
    9. How often would you report deviations? Explain in 40-50 words
    There are different ways in which deviations are reported, minor changes in the expenditure/ purchase can be made and will be reported on monthly basis. If there are any major changes in the guidelines, first approval is taken then changes are carried on.
    10. List 3 options you can use to investigate appropriate options for effective management of deviations in the budget.
    1
    Effectively use/ pull the data from all the departments and needs to be well prepared.
    2
    Efficiently plan the potential deviations and take the guidance and knowledge from the experts in the field.
    3
    Today’s market is volatile, identify the threats and risk more quickly and adopt them in the plan.
    4
    Consider the econometric factors such as GDP, inflation and political unrest.
    11. Why is it important to advise your colleagues of the budget status? Answer in 30 words.
    Colleagues might not have the access to the budget data, so to stay within the budget and adhere to the budgetary goals needs to be communicated in the right channel.
    12. Why is it important to identify the existing costs and resources you use in the process of stock control? Answer in 30-40 words.
    Existing cost and resources are the baseline on which planning is done and if there is any modification needs to be done and any improvements or deletions to the existing resources will be done.
    13. List 5 examples of stock you can identify where you can reduce wastage
    1
    Fruits and vegetables are wasted.
    2
    Breakage of serving utensils
    3
    Kitchen – waste management should be handled properly
    4
    Cleaning products.
    5
    Effective utilization of contract labour
    14. Why is it important to advise your colleagues of the budget outcomes? Explain in 25-30 words.
     In order to achieve the budgetary goals, greater accountability and to be transparent in actions.
The amount of funding available for each department and activities needs to be performed as a team. Budgetary plan needs to be communicated to all levels in the organization.
    15. Explain how the below listed approaches can assist with budget management.
    Factors
    Type of information
    Increasing par stock levels
    Increasing the par stock level, will increase the allocation of funds and reduces the risk as par levels will consider the safety stock.
    Decreasing par stock levels
    Decreasing the par stock level, will decrease the allocation of funds and increases the risk as safety stock levels are not considered.
    Sourcing new suppliers
    Sourcing the new supplier if planned properly or dealt with the new supplier will reduce the cost, as new offers and deals will be there for the new customers.
    Reviewing stock
    By Stock review we will come to conclusion that, which are fast moving stocks and which are slow moving stocks, fund allocation can be based on this analysis.
    Conducting spot checks
    Spot checks or surprise checks will help in analysing the stock , how the inventory has been utilized and any leakages can be corrected and funds can accordingly been utilized.
    16. You monitor the performance of your staff and notice one of your staff members’s not using the available resources for his job appropriately. You are looking for ways to minimise wastage. What method can you use to assist in managing the budget and to improve performance? Explain in 50 words how this method will help you.
    For various reasons resources in the organization will not be utilized properly, below are some of the ways to use resources in the best possible way.
1. List down all the available resources in the organization, by department wise.
2. There will be some resources which are in built, include those resources as well.
3. When a particular task needs to be performed, align the tasks with the available resources.
4. If there are any modifications which are required for the existing resources, please do so, to get the desired results.
    17. Explain how the below listed approaches can assist with budget management.
    Factors
    Type of information
    Increasing par stock levels
    
    Decreasing par stock levels
    
    Sourcing new suppliers
    
    Reviewing stock
    
    Conducting spot checks
    
    18. Why is it important to consider the impact of any changes on others when developing new approaches or changes to budget management?
    1
    One of the main objectives of the budgeting is to create a focus for the direction of the business.
When planning, all the departments in the organizations are considered and are part of the business. In order to keep everyone in the process on the same page, changes, modifications in the budget should be communicated effectively. As changes needs to be implemented at the department level gross root level, they should know whether changed plan has the resources available or needs to obtained or internally developed.
    19. List one potential benefit or disadvantage that may occur when implementing changes in the following areas.
    1
    Customer Service: Changes in customer service will result in enhanced experience to the customer which might be added advantage over the competitors.
    2
    Staff morale: Increasing the staff morale will boost in motivation and it will result in increased performance.
    20. How would you present recommendations to the management? What information would you include in the report?
    It is one the challenging task to present the recommendation to the management:
1. Jolt down the unique idea / process that has not been implemented in the organization.
2. Talk with the management about presenting the recommendation.
3. Analyze the impact of revenue on the recommendation, for a month for a quarter and for the year.
4. Talk how the recommendation will impact employees and ease in which tasks can be completed.
5. Recommendation impact on the end users and talk about how customer experience will be improved.
    21. When do you prepare a report? What factor heavily influences when it has to be prepared. Answer in 40-50 words
    Normally among all, the reports to the management will be critical and important.
1. There are some compulsory reports and there are some reports which needed to take decisions.
2. Monthly / quarterly/ yearly reports to the management.
3. Report needs to be prepared keeping in mind the target audience and the target area.
4. Period of the report is very important, starting and the end period.
5. Reports are gross level or the deep dive reports, normally based on the need of the report.
6. When presented to the management , report should contain additional information like analysis, comparison with the industry standards, market standards.
    22. List 4 members of your team you would present your recommendations to?
    1
    The general manager
    2
    Finance Manager
    3
    The purchasing manager
    4
    The marketing manager
    5
    The management team
    23. List 5 recommendations you can present to the answer above.
    1
    The Management team – Management should place internal control and effective follow-up of the same.
    2
    The General Manager – When the internal controls are in place, same needs to be supervised , and faults needs to be discussed with the management for the suggestions and recommendation.
    3
    Finance Manager – Finance Manager should approve and release the funds as per the budget, if there is any major deviation, needs to be checked with the higher manager and the management accordingly.
    4
    Purchase Manager – Vendor needs to be selected economically, should bargain for the deals, offers and discounts and above all for the lesser price.
    5
    Marketing Manager – After the all the systems in place, Marketing manager should promote the manage and is responsible for the customer experience.
PART 3: Theoretical knowledge
    1. Explain the purpose of the below mentioned financial documents.
    Documents
    Purpose
    Bank deposit slip
    The main purpose is this document is a reference for the amount deposited with the Bank on the particular date, to the right account.
    Bank statements
    This document acts as a checklist for all the activities of the bank. Summary of the transactions on a particular period.
    Banking summaries
    Bank Summaries shows the upto date summaries of the financial position in that particular bank of the business. ( for a particular account )
    Business activity statements
    Business Activity Statement is the form submitted to the tax authorities, to report their tax obligations, payments made and details for which tax payments have been made.
    Cheque books
    Issued by the respective Bank, and acts as a tool for making the payments from account holder account.
    Credit card transaction statements
    Confirmation of the payments made in card, changes levied for the particular period, refunds if...