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BSBSMB406 Manage Small Business Finances Assessment Task 1

Assessment Task 1

BSBSMB406 Manage small business finances

Performance objective

The candidate must develop a cash flow estimate to inform business planning.

Assessment description

A cash flow estimate gives a clear picture of the amount of cash the business is likely to have available during the coming year, taking into account tax provisions and credit sales.

A cash flow estimate is useful for planning and also enables you to respond to issues promptly.

For this assessment task, you must develop a cash flow estimate that identifies income, expenses, estimated credit sales, and tax provisions for the coming 12 months.

This assessment will require the following file, which your assessor will provide:

  • ‘Assessment-Task-1-Cash-Flow-Template’.

Note: The file is a spreadsheet with three worksheets (Sophy, Bob sample, and Your business). Use the ‘Your business’ worksheet to complete this assessment task. 

Procedure

  1. Read your business plan to clarify the products/services offered.
  2. Group the products/services into eight categories for the purposes of this Assessment Task.
  3. Note the product/service categories in the relevant section at the top of the ‘Your business’ worksheet in the ‘Assessment-Task-1-Cash-Flow-Template’ file.
  4. Identify the applicable tax rate and note this on the worksheet.
  5. Calculate projected sales of the eight products/service categories for each month of the following year and enter these in the grey sections of the ‘Stock sales’ section of the worksheet.
  6. Calculate projected credit sales and repayments and enter these in the grey sections of the ‘Credit’ section of the worksheet.
  7. Identify and estimate other income sources for each month and enter these into the relevant section of the worksheet.
  8. Identify and estimate expenses for each month and enter these into the relevant section of the worksheet.

Adjustment for distance-based learners

  • No variation to the procedure is required.
  • Documentation can be submitted electronically or posted in the mail.
  • A follow-up interview may be required (at the discretion of the assessor).

Specifications

You must provide:

  • a spreadsheet with a cash flow estimate, including tax provisions and credit sales, for the coming 12 months for the business.

Your assessor will be looking for:

  • accurate and complete product/service categorization and pricing
  • accurate and complete income identification and estimates
  • accurate and complete expense identification and estimates
  • an accurate tax margin expressed as a percentage
  • a realistic projection of sales for each month
  • a realistic projection of credit sales and repayment for each month.
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