Monitor and Control Finances
Management Process
BSBFIM501 Manage budgets and financial plans
Session 3
1
Purpose of this presentation
At the end of this session you should be able to:
• implement processes to monitor actual expenditure and to control
costs
• monitor expenditure and costs
• implement, monitor and modify contingency plans
• report on budget and expenditure in accordance with
organisational protocols.
• collect and collate data and information for analysis
• analyse data and information and recommend any improvements
to existing processes
• implement and monitor agreed improvements.
2
Budgetary control
Management
functions
Use budgets to:
PLANNING CONTROL
• coordinate business
decisions
• provide motivation for Budget set with goals
Accounting system
measures performance
staff
• control resource Budget compared
to actual
allocation
• set an awareness of Investigate variances
business expectations.
Take action if
necessary
3
Cash controls
Three fundamental control processes employed by most
organisations are:
• paperwork
• secondary control
• proper authority.
4
Audit trail
The critical aspects required to maintain an audit trail
include:
• authorisation
• traceability
• reconciliation.
5
Monitor variations
6
Contingency implementation action plans
Activity Monitoring activity and date Person/s
Senior management: Managerial report to evidence implementation; EB, JH,
workgroup management must also include feedback from management MW,
meeting to explain team and recommendations for improvement :
implications so that work Quarter 1.
group managers may
explain implications for
team.
Manager: team meeting Individual managerial reports to evidence DB, MM,
to explain new budget implementation; must also include feedback PM, JH
and implications for work from work group and recommendations or
group. improvement of implementation: Quarter 1,
week1 .
Quarterly budget variation reports by cost
centre: Quarter 1.
7
Reporting: Sources
Management reports may include data from:
• bank statements
• credit card statements
• financial reports
• invoices and receipts
• ledgers and journals
• logs
• petty cash records
• spreadsheet‑based records.
8
Reporting: standard format
A standard management report consists
of five key sections:
• title page
• executive summary
• body
• conclusion
• recommendations.
9
ATO reporting: Budgeting for GST
June July August
Budgeted cash receipts incurring GST:
Cash sales: 12,000 13,000 13,900
Cash revenue(besides sales) 800 600 490
Cash receipts from sale of assets (not stock) 6,000
Total receipts for GST 18,800 13,600 14,390
Budgeted non-cash receipts incurring GST:
Debtors sales: 5,300 3,900 5,000
Total non-cash receipts: 5,300 3,900 5,000
Total budgeted receipts incurring GST 24,100 17,500 19,390
10
Sources of data for analysis
• bank account records • consumables records
• receipts • purchasing records and
• tax invoices materials used
• depreciation • payroll and labour utilisation
reports
• GST calculations and any
• service charge-out rates
credits
• credit card statements
• petty cash receipts and
balances • financial reports
• job costing • sales information
• inventory, materials, finished • wages/salaries books (including
goods records PAYG, superannuation, etc.).
Prioritise analysis
1
• ‘High priority’ company policy
2
• Largest unfavourable $ var.
3
• Greatest unfavourable % var.
4
• Unfavourable trend
5
• Favourable high $ and % var.
Analyse cash flow
Completing a ratio
analysis will determine: Trade
debtors
Account
sales
365
Debtor
days
• the length of time to
receive payments
from debtors Trade
creditors
Purchases 365
Creditor
days
• the length of time to
pay creditors
Cost of Average
• the length of time
Stock turn
goods sold stock
that stock takes
to sell.
Implement corrections and
improvements Communication
Activity Monitoring activity/date
of plans Completion of
Person/s
EB, MM
to manufacturing staff communication forum/Q1
There are five types explaining needs,
benefits to organisation
week 1
Completion and analysis
of corrective action and staff and request for of feedback/Q1 week 1
that can be used: feedback
Training needs analysis Training need analysis MM
• interim action performed conducted and submitted
• adaptive action to operation manager /Q1
week 1
• corrective action Kaizen workgroups Management report MM
• preventative formed to brainstorm completed containing
innovative suggestions generated
action fro process improvement recommendations
• contingency and wast reduction submitted to operations
action. manager/Q1/ week 2
Regularly scheduled Analysis of wastage actual JH
budget monitoring as against new budget
part of quarterly
reporting cycle
