Elements and Performance Criteria

RANGE STATEMENT
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
Financial plan may include:
analysis of sales by product/service, identifying where they were sold and to whom
cash flow estimates for each forward period
current financial state of the enterprise (or owner/operator)
estimates of profit and loss projections for each forward period
financial performance to date (if applicable)
likely return on investment
monthly, quarterly or annual returns
non-recurrent assets calculations
profit, turnover, capital and equity targets
projected profit targets, pricing strategies, margins
projections of likely financial results (budgeting)
projections, which may vary depending on the importance of such information and the stage in the life of the business
resources required to implement the proposed marketing and production strategies (staff, materials, plant and equipment)
review of financial inputs required (sources and forms of finance)
risks and measures to manage or minimise risks
working, fixed, debt and equity capital
working in conjunction with external consultants e.g. investment analysts, accountants, financiers
Financial information may include:
accrual of staff leave/entitlements
asset management strategies which may include:
owning, leasing, sharing, syndicating
maintaining and deploying assets
asset registers
balance sheets
bookkeeping/accounting/stock/job costing records
business activity statements
business capital
cash book
cash flow forecasts
financial budgets
financial indicators, which may be short-, medium- and/or long-term
payroll records, superannuation entitlements
profit and loss statements
ratios for profitability, liquidity/efficiency/financial structure
risk management
statements/forecasts
taxation returns including goods and services tax
Specialist services may include:
accountants
business brokers/business consultants
government agencies
industry/trade associations
lawyers and providers of legal advice
mentors
online gateways
providers of training in accounting software
Cash flow may include:
anticipated payments
anticipated receipts
customer credit policy/debt recovery
taxation provisions
Relevant people may include:
family members
financial backers
franchise agency
owner/operator
partners
regulatory bodies
trade or industry associations
Financial backers may include:
financiers/banks/lending institutions
leasing and hire purchase financiers
providers of venture capital
shareholders/partners/owners/family/friends
Credit policies may include:
collateral
credit limits
credit references
debt collection
payment options
proof of Indigenous identity
trading terms
Financial ratios may include:
current ratio
days debtors outstanding
days stock on hand
expense percentages
gross profit percentage
liquid ratio
net profit percentage
proprietary/debt ratio
return on investment/return on total assets
staff productivity measures
stock turn rates

EVIDENCE GUIDE
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the following is essential:
development, implementation and review of strategies for the ongoing management of finance
maintenance of day-to-day financial management of the business as well as implementation of broad financial strategies
knowledge of purpose of financial reports.
Context of and specific resources for assessment
Assessment must ensure:
access to relevant documentation
candidate's individual circumstances and work in the context of establishing or running a small business, are the basis for assessment.
Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples are appropriate for this unit:
portfolio of evidence including financial reports
preparation and review of financial ratios
review of cash flow projections
analysis of development, monitoring and maintenance of client credit policies
oral or written questioning to assess knowledge of principles for preparation of balance sheets and their interpretation.
Guidance information for assessment
Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:
BSBSMB402A Plan small business finances
BSBSMB405A Monitor and manage small business operations.