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BSBSMB406 Manage Small Business Finances Assessment Task 2

Assessment Task 2

BSBSMB406 Manage small business finances

Performance objective

You must develop a financial operations manual, and implement and review the manual over a reasonable timeframe.

Assessment description

It is essential that relevant people understand how to carry out the financial operations of the business correctly and consistently.

A finance operations manual provides a place where procedures can be documented, providing an easily accessible point of reference. The manual must be easy to navigate and clearly written so that everyone involved can understand and apply the procedures.

Procedure

1. Access your business’s financial policies and procedures.

Alternatively, download the sample policies and procedures at:

<http://www.mtnonprofit.org/uploadedFiles/Files/Org/Dev/Principles_and_Practices/MNA_Sample_Docs/Financial-Management-Sample-Policies.pdf>

OR

The financial policy and procedures manual template at:

<http://www.business.vic.gov.au/money-profit-and-accounting/financial/processes-and-procedures/accounting-and-financial-policies-and-procedures>.

2. Familiarise yourself with procedures for sourcing financial information, negotiating and securing capital, managing capital, credit management, provision for tax, debt collection procedures, monitoring business performance using key performance indicators, communication of policies and procedures, monitoring of marketing and operational strategies and monitoring of performance targets.

3. Develop a structure for your finance operations manual including a title page, an order for your procedures, and relevant sections or groupings of procedures.

4. Insert the procedures into the manual in the appropriate order and within the sections, you have decided on.

5. Develop a Table of Contents for the manual.

6. Implement each of the procedures over a three month period and write a report on each of them indicating:

  1. the method of implementation
  2. the people involved
  3. the success and limitations of the procedures, and
  4. suggested amendments to the procedure.

7. Document the methods used to obtain specialist financial services and the level of helpfulness of these services.

8. Calculate the financial performance measures from your business plan and the KPIs and financial ratios were chosen in this unit for each of the three months and assess the change in the health of business over each of the three months by comparing with financial performance targets and industry averages for financial ratios. Note any changes to KPIs or financial ratios that you decide to make because of this review period or give reasons why no changes are necessary.

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 financial operations manual.

Your assessor will be looking for:

  • practical procedures that focus on their rationale
  • well-written procedures according to the guidelines given in Session 1
  • a clear title page with the business name, author, and date of compilation
  • a table of contents and section headings
  • a clear and easily understood structure for procedures, including a name, rationale and date of development
  • procedures for each of the following topics:
    • sourcing financial information
    • negotiating and securing capital
    • managing capital
    • credit management
    • provision for tax
    • debt collection procedures
    • monitoring business performance using key performance indicators
    • communication of policies and procedures
    • monitoring of marketing and operational strategies
    • monitoring of performance targets
  • clear records of implementation of each of the procedures, including the method of implementation, the people involved, the success and limitations of the procedures, and suggested amendments to the procedure
  • clear explanation of the methods used to obtain specialist financial services and the use of these services
  • correct calculation of KPIs, financial performance measures, and financial ratios for each month of the three month period
  • correct comparison with financial performance targets and industry benchmarks giving a clear picture of the changes in the health of the business over the three months
  • clear suggestions for any changes to the KPIs or financial ratios or a clear description why changes to these are unnecessary after this three-month review period.
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