Activity 3.2: Prepare and circulate budgets.

This activity requires you to prepare and circulate the following budgets.

• Profit and loss budget 

• Cash flow budget 

• Ageing summaries.

Guidelines for the preparation of budgets. 

• Monthly budgets must be prepared for a period of three months. 

• The budgets prepared must: 

 aligns with the business plan

 is based on research and analysis of previous financial data and cash flow trends

 meet compliance, statutory and organisational requirements

• The budgets must be prepared using the financial management software used by the workplace. 

To do so, you are required to follow the steps given in Checklist 2 and complete the templates associated with each step. 

The Supervisor or trainer/assessor will: 

• Supervise and observe the student performing this activity. 

• Place a tick mark against each step given in the checklist after the student performs/implements the step. 

• Sign off the checklist and ask the student for the submission of templates associated with each step. 

Checklist 2: Prepare and circulate budgets

Step 1: Develop profit and loss budget and cash flow budget that:

• aligns with the business plan

• is based on research and analysis of previous financial data and cash flow trends

• meet compliance, statutory and organisational requirements

During the development of the budgets, you must contribute to financial bids and estimates. 

Further, document the following using Template 3. 

• How did you ensure that the budget aligns with the business plan of the workplace? 

• How did you contribute to financial bids and estimates? 

• Compliance, statutory and organisational requirements followed during the preparation of the budget. 

Step 2: Determine the following and document using Template 4.  

• Reporting requirements 

• Financial delegations of managers and supervisors

Step 3: Circulate budgets and confirm managers and supervisors understand budgets, reporting requirements and financial delegations

• Arrange a meeting with the workplace managers and supervisor. 

• Conduct the meeting based on the meeting process provided. 

Meeting process: 

Before the meeting

1. Create a meeting agenda.

• Confirm the meeting time and place with the trainer/assessor. 

• Use the meeting agenda template provided to prepare the meeting agenda. 

2. E-mail the meeting agenda to the meeting participants and request confirmation for the meeting. 

3. Print out the budgets prepared, reporting requirements and financial delegations (Outcomes of Step 1 and Step 2). 

During the meeting

1. Welcome the participants 

2. Distribute budgets prepared, reporting requirements and financial delegations to the participants of the meeting.

3. Discuss the following with the managers and supervisors: 

• Budgets

• reporting requirements

• financial delegations 

4. Clarify the understanding of the participants.

5. Confirm managers and supervisors understand budgets, reporting requirements and financial delegations.

After the meeting

1. Summarise the agreed outcomes using the meeting minutes template provided.

Template 3: Procedures followed during the preparation of profit and loss budget and cash flow budget

Procedures followed during the preparation of profit and loss budget and cash flow budget

How did you ensure that the budget aligns with the business plan of the workplace?

How did you contribute to financial bids and estimates?

Compliance, statutory and organisational requirements followed during the preparation of the budget.

Template 4: Reporting requirements and financial delegations 

Reporting requirements and financial delegations

Reporting requirements

Financial delegations of managers and supervisors