Application
This unit describes the skills and knowledge required to implement and review financial management strategies on a regular basis.
It applies to individuals who operate a small business that stands alone, or is part of a department within a larger organisation. Individuals in this role interpret financial reports and other numerical data to develop financial management strategies.
No licensing, legislative or certification requirements apply to this unit at the time of publication.
Elements and Performance Criteria
ELEMENT | PERFORMANCE CRITERIA |
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. |
1. Implement financial plan | 1.1 Identify financial information requirements and obtain specialist services, as required, to profitably operate the business in accordance with the business plan 1.2 Produce financial budgets or projections, including cash flow estimates, as required for each forward period, and distribute to relevant people in accordance with legal requirements 1.3 Negotiate, secure and manage business capital to best enable implementation of the business plan and to meet requirements of financial backers 1.4 Develop and maintain strategies to enable adequate financial provision for taxation in accordance with legal requirements 1.5 Develop, monitor and maintain client credit policies, including contingencies for debtors in default, to maximise cash flow 1.6 Select key performance indicators to enable ongoing monitoring of financial performance 1.7 Record and communicate financial procedures to relevant people to facilitate implementation of the business plan |
2. Monitor financial performance | 2.1 Regularly monitor and report on financial performance targets, and analyse data to establish extent to which the financial plan has been met 2.2 Monitor marketing and operational strategies for their effects on the financial plan 2.3 Calculate and evaluate financial ratios according to own or industry benchmarks 2.4 Assess financial plan to determine whether variations or alternative plans are needed, and change as required |
Evidence of Performance
Evidence of the ability to:
operate the business according to the business plan, including:
adhering to legal requirements
meeting requirements of financial backers
defining strategies for debt collection and contingencies for debtors
managing cash flow
defining key performance indicators
communicating with relevant people
monitor the business against financial plan and make changes as required.
Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.
Evidence of Knowledge
To complete the unit requirements safely and effectively, the individual must:
discuss benchmarking
explain financial decision-making relevant to the business
summarise significant financial indicators
outline purposes of financial reports
clarify preparation and interpretation of budget/actual reports
identify principles for preparing balance sheets and their interpretation
outline debt collection procedures or strategies
characterise principles for preparing profit and loss statements and their interpretation
discuss stock records and stock control relevant to the business.
Assessment Conditions
Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the Management and Leadership – Small and Micro Business field of work and include access to:
business equipment and resources
relevant legislation, regulations, standards and codes
relevant workplace documentation and resources
case studies or where possible, real situations
interaction with others.
Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.
Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the performance criteria that are required for competent performance.
Skill | Performance Criteria | Description |
Reading | 1.1-1.4, 2.1, 2.4 | Evaluates complex text to determine legislative, regulatory and workplace documentation |
Writing | 1.2-1.5, 1.7, 2.1 | Prepares written reports and workplace documentation that communicate complex information clearly and effectively |
Oral Communication | 1.3, 1.7, 2.1 | Articulates clearly using specific and relevant language suitable to audience to convey requirements, and employs listening and questioning techniques to confirm understanding Participates in verbal negotiations using tone and language suitable to audience |
Numeracy | 1.1-1.5, 2.1, 2.3, 2.4 | Interprets numerical information to calculate all relevant financial information |
Navigate the world of work | 1.2, 1.4 | Appreciates implications of legal and regulatory responsibilities related to own work |
Interact with others | 1.7, 2.1 | Selects appropriate form, channel and mode of communication for a specific purpose relevant to own role |
Get the work done | 1.1, 1.2, 1.4-1.6, 2.2, 2.4 | Develops plans to manage relatively complex, non-routine tasks with an awareness of how they may contribute to longer-term operational and strategic goals Makes a range of critical and non-critical decisions in relatively complex situations, taking a range of constraints into account Uses formal and informal processes to monitor implementation of ideas and reflect on outcomes |
Sectors
Management and Leadership – Small and Micro Business