QUESTION
SOLUTION
Accessing Teams Budget and Financial Plans
In order to improve the financial planning in the organisation we need to develop a model for strategic financial planning which needs to be met effectively by the organisation (Manage Budgets and Financial plans, n.d.). The first step is accessing the team’s budget and Financial Plans. The teams Budget and financial plans include:
- Long term Budgets/ Plan
- Short term Budgets/ Plans
- Operational plans
- Spreadsheet based financial projections
- Cash flow projections
- Targets or key performance indicators (KPIs) for wastage, production, sales, productivity, income as well as expenditures for the organisation. (BSBFLM513A: Manage budgets and financial plans within the work team, n.d.)
Current budget and financial plans can be accesses by looking at the demand and the spending of the organisation. Finding the cash flows which are received in the organisation and analyse whether the sources for cash flows are changing. Regularly keep an eye on the actual financial performance and prepare a report also regarding the year end position of the organisation. Found out all the relevant accountant or auditors report which might be of some help on organisations development (Hansen, Mowen and Guan, 2009)
Evaluating the Current Budget and Plans and Find whether they are attainable or not
These current budget plans are being clarified with the relevant personnel in the organisation in order to find out whether the budget plans are achievable or not. Size of the company and the type of business it is into are the two major factors which help in finding whether the plan is achievable or not. The current financial plans for the organisation are clearly written, concise and very much accurate. The documented outcomes are very much achievable and all the contingency planning is also in place in the form of risk- control measures (BSBFIM501A Manage budgets and financial plans, n.d.).
Confirm The Current plan
The plan which has been currently developed is according to the organisations layout needs and easily understood too and quite clear in its intent. All the projections, calculations and information are found to be accurate.
Achievable
The capabilities of the area of responsibility assigned and along with the team are capable enough of delivering the goods and services which are required from the organisation within the assigned budget and time.
Comprehensible
The current budget is quite logical and can be understood easily and that is why all the team members are able to understand it in right manner covering all the aspects like the team members should know the various activity areas which have been assigned to them under the budget covered. The budget also has the supporting documents like the spreadsheet projects for the targets to be achieved. All the terminologies and jargons used are clearly explained and all the team members know how the financial goals of the organisations will be achieved.
Personnel with whom negotiation will take place while making changes in the budget and Plans
While making changes in the budget and the financial plans we need to negotiate with the relevant personnel in the organisation which include personnel like supervisors, fellow frontline managers. It also includes the financial controllers or accountants and the financial managers.
Reviewing the Contingency plans
The financial plans or budgets are the frameworks which are being designed for the organisation to work within. But when we find that they are no longer achievable or you can work on them, then we need to adjust then or make some changes in them. Having a contingency plan and performing risk analysis is a good organisational practice. The contingency plans are of various types like:
- Outsourcing or contracting human resource and other functions or tasks related to human resource.
- Strategies for cost reduction, stocks, wastage and consumables.
- Recycling or re-usage of materials used in the organisation
- Seeking other options for financial funding in future.
- Identification of risk, management processes and risk assessment too.
- Alternative means of procurement for the various stocks, raw materials or equipments is needed while hire purchasing or renting them.
- Labour cost reduction is needed which restructuring the organisation.
- Outcomes need to be diversified.
- Looking for cheaper and lower quality raw materials or consumables for cost reduction is desired.
- Sales and production needs to be increased.
- Succession Planning also comes under contingency planning.
| RISK | CONTINGENCY PLANS (RISK CONTROL) | EXAMPLE |
| Failure of Equipments | Leasing the equipments | Maintenance budget increases due to regular breakdowns
|
| Changes in Price and Cost | Storing or catching hold of large amounts of inputs and organising firm and contractual arrangements which should be in place | Cost of input if increased and increase in salary which are unexpected also add to not just labour and production but also increase the cash flow. |
| Security Breaches | Confidentially control, measures and high level and tighter security in organisation | Breaches in the privacy of the clients or the confidentiality leads to reduction in the level of confidence of the company and thus might result in reduction or decrease in the level of demands for the services or the goods made by the company |
| Quality Control | Quality Control Plans and Measures should be enhanced and in place in organisation | Giving wrong advice to the clients or delivering poor quality standard products or services in the market will highly impact the demand of the products and services which will go negative and thus impact the income from sales of the company. |
| Delay in The input supplies | Holding large quantities of goods that too at an increased inventory costs | Materials not coming on time or getting hold up at the customs will either stop the production or impact the cash flows. |
| Shortage of Staff | Increasing the flexibility of casual labour | Labour costs get affected due to sudden illness or departures as the organisation has to pay the other staff overtime in order to meet the production schedules. |
| Financial Losses | #Enhanced measures in security | Frauds, theft or mismanagement of the resources in the organisations lead to increased costs and thus affects the cash flows of the organisation. |
Review of methods of Communication used for conveying information about Budget to the Staff
The information in the planned budget or the financial plans should reach and be communicated to the staff in proper manner for the successful implementation of the planned Budget. The staff should have proper access to the desired resources and systems which are needed, so that the staff can perform their work in an efficient and effective manner.
The staff should be well trained and well qualified, secure record-keeping systems are needed, adequate funds, an effective electronic management system, well maintained machinery and equipment and right amount of time to meet the desired deadline is required form the organisation. It is the task of the manager to make sure that all these resources are made available to the staff on time in order to manage the financial processes of organisation in proper manner.
Support provided to ensure staffs are able to perform their financial roles effectively
The staff in the organisation should be well trained in order to carry out all the tasks for which they are responsible. The task of the manager is to monitor the staff’s performance and progress regularly so that they can find out if there is any slack in the performance of the staff (Brigham and Houston, 2009). Then the manger should identify the skill or knowledge shortage and the plans should be put into place in order to address the issues. Other kinds of support which can be provided to the staff are:
- Proper documentation of the work procedures for the staff
- Help-desk or other experts identified within the organisation
- All the information desired available on intranet
- Access available to the staff to specialist advice time to time
- Information sessions and proper briefings available
There is as such no lack of support being seen in the organisation to the staff the staff gets proper training which covers, coaching, mentoring and teaching newest techniques. However one aspect which can be included is shadowing in the training schedule.
Resources needed to undertake the chosen financial plan
There are several kinds of resources which are needed for executing the financial plan which includes resources and systems like human resources, financial resources or physical resources, specialist advice or support. The other resources which are covered includes hardware and software and various record keeping systems which can be either electronic based or paper based
Human Resources
In order to handle the various financial tasks and responsibilities in the team the organisation needs required number of team members. They are required to handle several tasks like handling the petty cash system, purchasing, debt collection, inventory management, sales, marketing etc. If the team seems to be understaffed then we might need more people. In order to meet the budgetary requirements we need to find out whether we want to outsource the extra team members or contract them (BSBFLM513A: Manage budgets and financial plans within the work team, n.d.).
Physical resources
These covers the physical resources which are needed to execute the plan effectively like the factory or work space, storage, plant equipments or machinery, computer equipment, furniture and all these should be well maintained and in proper working condition.
Time
It is the most valuable resource and managing proper time is very essential so that it is ensured that time management is done and not simply wasted in doing irrelevant tasks. Streamlining the procedures, communicating the expectations and delegation of authority, training the staff and following-up the deliverables needs to be done by the manager for effective time management.
The internal control procedures in the organisation
The internal Control Procedures covers the monitoring and controlling the finances using various processes for reporting the assets, income, expenditure, consumables, stock, wastage an equipments in the organisation (Hightower, 2009). These processes are implemented all across the organisation in order to keep a tab on the cost and to monitor the real-time expenditure done by the company. This is being done on cyclical basis to find out the expenditure overruns and the cost variations. Based upon that the prepared contingency plans are implemented, then monitored and then again modified in order to keep up with the financial objectives of the organisation (Brigham and Ehrhardt, 2010). The processes for reporting which are being used in the organisation are:
- Logs
- Spread-sheet based records
- Bank Statements
- Financial reports
- Petty cash records
- Ledgers and Journals
- Invoices and Receipts
- Credit Card Statements
The monitoring plans for budget and financial plans review
The best approach regarding monitoring and evaluating the expenditure and cost incurred by the organisation is adjudged by the nature and size of the organisation and the management style and the structure of the organisation. The main objective is to earn profit which is calculated by measuring the difference between the revenue earned by selling the goods or services and the incurred expenses by the organisation.
In order to do proper monitoring for the budgets and the financial plans we need to collect all the data information available for the effectiveness of the implementation of financial management processes in the organisational and then we need to collate this data for the work teams for analysis. It includes collecting all the paper based or electronically gathered information which is related to cash flow data, files of paid purchases and all the service invoices, employee timesheets, petty cash receipts, invoices, insurance reports, contracts, income and expenditure, quotations, job costing, credit card statements, wages/ salaries book, bank account records and taxation records. These are very helpful and effective in finding the cost overruns and other problems like generating variance reports regarding the real income and expenditure done against the budget too.
Evaluation and recommendation to improve the overall financial processes in your work team.
In order to improve the overall financial processes in the work team there are few recommendation which can be followed by organisation: (Unsupported source type (Report) for source Sum12.)
- Improve the risk management systems which should be reviewed and new risk and opportunities can be identified regularly.
- Improving the financial business processes which will help in developing and establishing clear and documented business processes and controls in organisation.
- Regular training to the work team staff so that they remain updated about the policies, controls and processes.
- Enhancing the security of the software and the data related to the organisation
- The financial internal controls should also be enhanced for the internal security of the organisation.
Bibliography
Unsupported source type (Report) for source Sum12.
Brigham, F.E. and Ehrhardt, M.C. (2010) Financial Management Theory and Practice, Cengage Learning.
Brigham, E.F. and Houston, J.F. (2009) Fundamentals of Financial Management, 12th edition, Mason ,OH: Cengage Learning.
BSBFIM501A Manage budgets and financial plans, Aspire Training & Consulting.
BSBFLM513A: Manage budgets and financial plans within the work team, [Online], Available: http://www.mintrac.com.au/files/dip_units07/BSBFLM513A%20Manage%20budgets%20and%20financial%20plans%20within%20the%20work%20team.pdf [2 April 2012].
Hansen, D.R., Mowen, M.M. and Guan, I. (2009) Cost management: accounting & control, 6th edition, MAson,OH: Cengage Learning.
Hightower, R. (2009) Internal Controls Policies and Procedures, Hoboken ,New Jersey: Jpohn Wiley & Sons.
Manage Budgets and Financial plans, Cairns: Precision Group ( AUstralaia) Pty Ltd.
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