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Implementation and Monitoring of Financial Plan for Small Businesses

Identifying Financial Information Requirements

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
3. Required knowledge to be assessed    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.
4. Foundation skills    â–ª    Evaluates complex text to determine legislative, regulatory and workplace documentation
â–ª    Prepares written reports and workplace documentation that communicate complex information clearly and effectively
â–ª    Articulates clearly using specific and relevant language suitable to audience to convey requirements, and employs listening and questioning techniques to confirm understanding
â–ª    Participates in verbal negotiations using tone and language suitable to audience
â–ª    Interprets numerical information to calculate all relevant financial information
â–ª    Appreciates implications of legal and regulatory responsibilities related to own work
â–ª    Selects appropriate form, channel and mode of communication for a specific purpose relevant to own role
â–ª    Develops plans to manage relatively complex, non-routine tasks with an awareness of how they may contribute to longer-term operational and strategic goals
â–ª    Makes a range of critical and non-critical decisions in relatively complex situations, taking a range of constraints into account
â–ª    Uses formal and informal processes to monitor implementation of ideas and reflect on outcomes
5. Performance evidence    Evidence of the ability to:
•    operate the business according to the business plan, including:
o    adhering to legal requirements
o    meeting requirements of financial backers
o    defining strategies for debt collection and contingencies for debtors
o    managing cash flow
o    defining key performance indicators
o    communicating with relevant people
•    monitor the business against financial plan and make changes as required.


Identifying Financial Information Requirements

In this module, the key focus is to understand practices, systems and methods of managing finance unit of a small business. The several aspects related to the implementation of financial plan and to monitor financial performance of a small business is discussed. Budgets, source of capital, legal requirements related to the taxation, credit policies, key performance indicators and recording and communicating financial plan are some key aspects discussed in this report to ensure effective implementation and management of financial plan of a small business.     

The five financial information which are required in order to profitably operate the agency in accordance with business plan are as follows-

Personnel Numbers: It is important to consider overall objectives and numbers required to achieve the goals as stated in the business plan.

Overhead expenses: Once all the planning’s done according to the business plans, then it becomes quite necessary to make an estimation of all the expenses that are associated with the profitably operation of agency. These expenses can be termed as overhead expenses. All non labor expenses required to operate the business are categorized in this category (Business Queensland, 2017).

Capital requirement: In addition to the expenses, there is also a need of information which depicts the requirement of capital in order to purchase the essentials of business and to carry out the operations of business smoothly.

Revenue: The forecast of sales or revenue are based upon the market conditions and competitor analysis. This financial information is required to find out the profits that can be generated through agency in accordance with its business plan (NAB, 2017).

Cost of Goods: The last information which is required for the profitably operations of business is the cost of goods in order to measure the profitability of agency for the cash flow and income statement.

The five specialist services which are required to profitably operate the agency are as follows-

Financial advisers: The services of financial adviser will help the agency in deriving information about the financial situation of their business and also provide various information regarding investment, succession planning, management of risk and superannuation.

Legal experts: The services of legal experts will help the agency in solving a range of issues that arises at different stages in the cycle of business. The services of legal experts will help the agency in choosing business structure according to business plan, licensing and complying with all regulations, protection of rights on intellectual property, drafting of legal documents and resolving in disputes (Barth et. al., 2013). Legal experts also help the agency in decisions regarding insurance and finance. 

Business bankers


Insurance brokers

Budget: Budget can be defined as the estimation of possible costs or revenue and expenditure that will be incurred for performing the activities of business for the particular period of time.

Budget depends on two factors that are first, accurate estimation of figures according to goals and objectives and second, variations between the actual budget and projected budget. Overall planning to start a business is depends on the budget estimation, so budget should be based on

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