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Last Updated on April 8, 2023 by Ozlinks Education
Subject: Manage finances within a budget
This unit code SITXFIN003, describes the performance outcomes, skills and knowledge required to take responsibility for budget management where others may have developed the budget. It requires the ability to interpret budgetary requirements, allocate resources, monitor actual income and expenditure, and report on budgetary deviations.
The skills and knowledge for budget development are covered in SITXFIN004 Prepare and monitor budgets.
This unit applies to all tourism, travel, hospitality, and event sectors. The budget may be for an entire organisation, for a department or for a particular project or activity.
It applies to those who operate independently or with limited guidance from others. This includes supervisors and departmental managers.
Elements and Performance Criteria.
Elements describe the essential outcomes. Performance criteria describe the performance needed to demonstrate achievement of the element.
1. Allocate budget resources.
1.1 Allocate funds according to budget and agreed priorities.
1.2 Discuss changes to income and expenditure priorities with appropriate colleagues prior to implementation.
1.3 Consult with and inform relevant personnel about resource decisions.
1.4 Promote awareness of the importance of budget control.
1.5 Maintain detailed records of resource allocation according to organisational control systems.
2. Monitor financial activities against budget.
2.1 Use financial records to regularly check actual income and expenditure against budgets.
2.2 Include financial commitments in all documentation to ensure accurate monitoring.
2.3 Identify and report deviations according to significance of deviation.
2.4 Investigate appropriate options for more effective management of deviations.
2.5 Advise appropriate colleagues of budget status in relation to targets.
3. Identify and evaluate options for improved budget performance.
3.1 Assess existing costs and resources and proactively identify areas for improvement.
3.2 Discuss desired budget outcomes with relevant colleagues.
3.3 Undertake appropriate research to investigate new approaches to budget management.
3.4 Define and communicate the benefits and disadvantages of new approaches.
3.5 Take account of impacts on customer service levels and colleagues in developing new approaches.
3.6 Present clear and logical recommendations for budget management.
4. Complete financial and statistical reports.
4.1 Complete financial and statistical reports within designated timelines.
4.2 Prepare and present clear and concise information to enable informed decision making.
Assessment Requirements.
Performance Evidence.
Evidence of the ability to complete tasks outlined in elements and performance criteria of this unit in the context of the job role, and:
- manage a budget for a business over a three-month period that meets the specific business’ needs
- undertake at least two of the following to inform management of the above budget:
- discussions with existing suppliers
- evaluation of staffing and rostering requirements
- evaluation of impact of potential roster changes
- review of operating procedures
- sourcing new suppliers
- monitor income and expenditure and evaluate budgetary performance over the above budgetary life cycle
- complete financial reports related to the above budget within designated timelines and using correct budget terminology.
Knowledge Evidence.
Demonstrated knowledge required to complete the tasks outlined in elements and performance criteria of this unit:
- types of financial records:
- bank deposit documentation
- bank statements
- banking summaries
- business activity statements
- cheque books
- credit card transaction statements
- invoices
- journal entries
- labour and wages reports
- merchant statements
- merchant summaries
- transaction reports
- types of budgets:
- cash budgets
- cash flow budgets
- departmental budgets
- event budgets
- project budgets
- purchasing budgets
- sales budgets
- wage budgets
- whole of organisation budgets
- factors for consideration in the preparation of financial and statistical reports:
- cash flow
- commercial account activity
- commission earnings
- covers and financial return
- daily, weekly and monthly transactions
- expenditure
- income
- occupancy rates and financial return
- performance of department, project and/or products and services
- sales performance
- sales returns
- staff costs
- stock levels
- variance in income and/or expenditure
- wastage
- yield
- use, contents of and formats for:
- budgets
- financial reports
- statistical reports
- budget terminology
- specific industry sector and organisation:
- use of budgets to control costs and enhance profitability.
- importance of budget control.
- techniques for maximising budget performance.
- financial reporting procedures and cycles.
- features and functions of accounting software programs used to manage budgets.