Subject Code : BSBFIM601
Assignment Task
BSBFIM601 - Manage Finances - Houzit Pty Ltd Case Study - Prepare Budgets - Monitor and Review Budget - Financial Management Processes Assessment Help

1.    Read and analyse the case study information (including business plan summary and previous financial data) and complete the following.

a.    Develop a sales budget, profit budget, cash flow budget and debtor ageing summary using electronic spreadsheets (as separate worksheets) making sure each budget is divided into quarterly periods and that you use previous financial data to determine allocations for resources.
i.    Ensure each budget you prepare complies with the organisational and policies and procedures as provided.

b.    Develop budget notes that include:
i.    identification of reasons for previous profits and losses
ii.    your comment on the effectiveness of existing financial management approaches
iii.    all assumptions and bases that have been made or used to form budgets
iv.    any relevant notes regarding implementation and monitoring of budget expenditure.

Part 2

The CEO of Houzit Pty Ltd, Jim Schnieder explained that he prefers to discuss the budgets with all senior managers prior to their distribution in order to ensure a corporate view of the strategic plans. He then meets with each group separately to answer questions and concerns about their particular area. Eventually the budgets will be printed in hard copy and bound as well distributed as an electronic spreadsheet.

Upon completion of the budgets you meet with Jim to provide an overview of the information contained within the budgets, the budget notes and recommendations regarding the internal controls to prepare him for the meetings with the senior managers. To clarify his understanding of the information, Jim asks you a series of questions (listed below, which you will complete written or orally as agreed with your assessor).

1.    Identify the current statutory requirements for tax compliance and list and calculate the tax liabilities for Houzit Pty Ltd under taxation legislation.
2.    Identify the current compliance requirements and liabilities for this organisation under the Corporations Act 2001.
3.    Review commercially available financial management software to select the most suitable software for Houzit Pty Ltd.
Ensure you diagnose software options by comparing two commercially available software titles against the capabilities of the existing technology for the organisation and against the prioritised requirements, and outline the reasons that lead you to this recommendation.
4.    Explain how you can apply the following principles of accounting in developing the budgets required for this task:
a.    matching principle
b.    account groups
c.    time periods.
5.    Explain and discuss the implications of probity when preparing and revising budgets.
6.    List the critical dates and initiatives that will require or generate resources for Houzit Pty Ltd in the next financial cycle.
7.    List the items you would recommend for inclusion in the budgets for Houzit Pty Ltd.
8.    List the new or modified internal controls that could improve risk management for Houzit Pty Ltd including the maintenance of audit trails.

Task 2: Monitor and review the budget
Assessment description

You will need to review the provided current case study information and compare it to the budget you established in Assessment Task 1. After evaluating these you will need to report on the following:

•    significant issues
•    variances from budget
•    comparative performances
•    recommendations for ongoing financial viability
•    evaluation of financial management processes.

Procedure

1.    Read the case study.
2.    Develop a variance report based on the format and template provided by Houzit.
3.    Complete a cash flow analysis on the average length of time it takes Houzit to collect funds from its debtors to determine the trend based on the financial reports in Assessment Task 1.
4.    Examine the sales budget, profit budget, cash flow budget and debtor ageing summary to identify the following in a report:
a.    Issues:
i.    Identify, describe and prioritise significant issues that are evidenced in the provided case study information and describe reasons or causes of these issues. Include in this issues of financial probity that you have identified or considered when monitoring these budgets.
b.    Variances:
i.    Complete an actual-to-budget variance report, using the template provided in the case study.
ii.    Identify variances by comparing actual results with the established budget, and provide reasons why these variances may have occurred.


c.    Performance:
i.    Compare the financial performance of the organization (according to financial information provided) to industry benchmarks for this organization in line with the retail trade sector.
ii.    Respond to the performance questions provided by the CEO, as provided by the board of Houzit,
iii.    Determine a trend of the average debtor days and the impact to the cash flow of Houzit.
d.    Recommendations:
i.    Outline your recommendations for ongoing financial viability for the organisation, based on your assessment of the issues, reasons for variances and organisational performance you have identified (Steps 1–3).
ii.    Include in this section your plans for a revised budget, effectively managing contingencies and issues that have been identified in feedback and monitoring of the budgets.
e.    Evaluation:
i.    Provide a summary review of the financial management processes in place for the organisation, in light of your assessment of the issues, reasons for variances and organisational performance you have identified. Include in this section any recommendations you have for modifying management processes.
5.    Prepare for and undertake the role-play presentation:
a.    Arrange a time with Jim Schnieder, CEO of Houzit Pty Ltd (your assessor), to present an oral explanation of your variance report. Ensure that your assessor has copies of or access to documents you will be referring to.
b.    Deliver the presentation of your variance report
i.    Summarise your findings (issues, variances, financial performance)
ii.    Prioritise and present your recommendations.
c.    Ask for questions, either during or at the end of the presentation, to:
i.    demonstrate your oral communication skills
ii.    use questioning and listening techniques
iii.    demonstrate competent exchange of information
iv.    use appropriate conventions and protocols
v.    ensure the manager/CEO is clear about budgets
6.    Seek approval (or discuss as required) of your recommendations in the report.

Specifications
You must submit:
•    a complete actual-to-budget variance report
•    a completed report detailing the issues, variances, performance, recommendations and evaluations identified from the financial information for Houzit Pty Ltd.

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  • Posted on : December 05th, 2018

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