BFOB0411 Prepare Operational Budget

Level 3

Credit 4 Credits ( 1 credit = 10 notional hours)

This unit covers the competency to produce

Unit Descriptor operational budgets for non-manufacturing
entities.

Pre-requisite NIL

Co – requisite NIL

ELEMENT PERFOMANCE CRITERIA

1.Prepare budget 1.1 Define cash, expenditure and revenue

items clearly and relevant to identified objectives
of the budget
1.2 Make budget objectives clear and consistent
with organisational aims and projects and with
forecasts
1.3 Conduct discussions and negotiations with
stakeholders in a manner that promotes goodwill
and ongoing co-operation
1.4 Identify milestones and performance and
include in budgets
1.5 Break down annual budgets into seasonal
periods in accordance with operating trends

2 Document budget 2.1 Present data in a format that is easily

understood and appropriate to budget reporting
2.2 Complete reports within timelines and
distribute for specified periods and projects

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KEY COMPETENCIES/EMPLOYABILITY SKILLS AND EXAMPLES OF APPLICATION

Key Competencies are an integral part of all workplace competencies. The table below
describes those applicable to this unit. Trainers and assessors should ensure that they
are addressed in training and assessment.

Communicating ideas and information

to provide a briefing on your draft budget to a more senior Manager
Collecting analysing and organising information
to gather and analyse data to assist in the budget development process

Planning and organising activities

to organise the consultation process before and during the budget development phase

Working with others and in teams

to discuss/negotiate potential budget adjustments with colleagues

Using mathematical ideas and techniques

to develop different budget scenarios

Solving problems
to investigate a significant expenditure deviation and develop a solution to ensure
budget targets are maintained

Using technology
to use the budgetary planning tools within an accounting software package

RANGE STATEMENT
The Range Statement provides advice to interpret the scope and context of this unit of
competency, allowing for differences between enterprises and workplaces. It relates to
the unit as a whole and facilitates holistic assessment. The following variables may be
present for this particular unit:

Expenditure and revenue items may include:

• sales
• revenue producing expenditures
• other expenditures
• client and supplier payments (eg sales and commissions)
• fees and charges
• capital expenditure
• Pay As You Go
Budget objectives may include:
• annual planning
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• rolling forecasts (next period, monthly, next year)

• cost reduction
Stakeholders may include:
• clients
• financial institutions
• suppliers
• directors
• chief executive officers
Milestones and performance indicators may include:
• reports (quarterly, half yearly, annual)
• compliance with scheduled payment dates
• profits and losses
Verifiable evidence may include:
• forecasts
• record of past performance
• invoices/receipts
Data may include:
• cash flow projections
• fixed costs
• variable business costs
• sales records and projections
Organisational procedures and policies may include:
• reporting requirements
• financial analysis assessments (eg growth prospects against prior and current periods)
• electronic and paper based recording
• corporate governance requirements
Presentation methods and formats may include:
• tables
• graphics
• estimates and projections
• calculations
• explanatory notes
Reports may include:
• sales budgets
• purchase budgets
• statement of financial performance
• statement of financial position
• cash budgets

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EVIDENCE GUIDE
The Evidence Guide identifies the
critical aspects, knowledge and
skills to be demonstrated to
confirm competency for this unit.
This is an integral part of the
assessment of competency and
should be read in conjunction with
the Range Statement.
BFOB0411 Prepare Operational Budget
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Prepare Operational Budget
Critical aspects of evidence will include:
• accurate estimation of cash flows and returns
• logical and clear presentation of financial
conclusions
• interpretation of financial data to identify trends
• gathering, reconstruction and recording of data
in appropriate consolidated formats
An employee working at this level should be able
to demonstrate the following underpinning
knowledge and skills.
• principles of budgetary control
• forecasting techniques
• principles of double entry bookkeeping
• principles of statistical analysis and measures of
variance
• organisational procedures and policies
• principles of practices of accrual accounting
• ethical considerations for budgetary forecasting
and projections (eg strength of assumptions,
forecast reliabilities)
• interpersonal skills and communications (eg
liaising, listening, consulting)
• information technology use for the set up and
analysis of spreadsheets
• estimating, forecasting and analysis skills
• reading, interpreting financial statements and
reports
• writing skills for reports and recommendations
• numeracy for financial calculations and analysis
• recording, gathering and classifying financial
information
Context of Assessment and Resource
Implications
• competency is demonstrated in the context of
the work environment and conditions specified in
the range statement either in a relevant
workplace or a closely simulated work
environment
• access to and the use of a range of common
office equipment, technology, software and
consumables
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• hand held calculators

• financial services industry documentation and
specialist software
• access to IT systems and databases.

Assessment Methods
A range of assessment methods should be used to
assess practical skills and knowledge. The
following examples are appropriate for this unit:
direct observation of an integrated activity which
combines the elements of competency for the
unit or a cluster of related units of competency

knowledge and skills which may include formal

examinations
project presentation

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