Ambition in Action

Ambition in Action HEAD TEACHER DEVELOPMENT PROGRAM – FINANCIAL MANAGEMENT Additional Information

Ambition in Action Today's Outcomes  Basic Bookkeeping  Financial Section  Budgeting and Control  Monitoring Progress  Questions???

Ambition in Action Basic Bookkeeping  The bookkeeping system is a tool that enables management to analyse how the section is performing.

Ambition in Action Basic Bookkeeping /Is the business making a profit? /What is the level of expenditure? /Are some courses doing better then others? /Are expenses being kept under control? /Are there any areas which require urgent attention?

Ambition in Action Financial Statements /The financial statements prepared for most businesses are the Balance Sheet and the Income Statement.

Ambition in Action Balance sheet /The Balance Sheet lists your Assets and your Liabilities. The difference between the two equals your owner's equity. /OE = A - L

Ambition in Action Balance sheet /The items in your Balance Sheet are arranged under the following classifications. /Current Assets /Non-Current Assets /Current Liabilities /Non-Current Liabilities /Owner's Equity

Ambition in Action Income Statement /The Income Statement is a list of all your business income less all business expenses, to arrive at a net profit or loss for the period.

Ambition in Action Profit and loss statements

Ambition in Action The financial section /Source of finance /Liquidity

Ambition in Action The Financial Section /Finance is the lifeblood of a business. A good understanding of how money flows into and out TAFE is the key to success.

Ambition in Action Sources of Finance /What is the major source of finance at TAFE?

Ambition in Action Liquidity /Cash is the freest flowing asset of all. It flows like liquid - that’s why cash is used as a measure of liquidity. All businesses need access to cash.

Ambition in Action Liquidity

Ambition in Action Liquidity /Why is it important to know if there might be a cash deficit in any particular month?

Ambition in Action Liquidity

Ambition in Action Budgeting and Control /Operational plans are developed as a framework for running your section. A budget is one of the operational plans in your area.

Ambition in Action Budgeting and Control /Budgets are often used as performance standards or targets for head teachers and management to work towards. Budgets can be very effective planning and control mechanisms, provided they are prepared prior to the period to which they relate and are regularly monitored.

Ambition in Action Operating budgets /Budgeting in TAFE must satisfy a number of objectivise: /1. The Annual Budget /2. The Authorised Budget /3. The Forecast /4. To provide means of projecting the likely financial year and update these when required.

Ambition in Action Types of Operating budgets /The sales budget. /The purchasing budget. / The human resources budget.

Ambition in Action Operating budgets /In large organisations like TAFE, these budgets would most probably be prepared on a departmental basis.

Ambition in Action The sales budget /These estimates are based on sales forecasting which is concerned with identifying sales demand and any likely impacts such as seasonality, etc.

Ambition in Action The sales budget /The sales budget would include estimates of: /sales volume /prices /selling & marketing expenses

Ambition in Action The human resources budget /In this budget you would estimate the costs associated with employing and maintaining staff.

Ambition in Action The purchasing budget /The purchasing budget includes all types of purchases within TAFE. Most expenses here would be classified as administration expenses.

Ambition in Action The purchasing budget /What is a purchasing agreement ?

Ambition in Action Monitoring progress /There are some simple ways to check the progress of your section. Cost activity, profitability, liquidity and debt levels are easy to calculate and good business managers do this on a regular basis. Through TAFE this is done through the Buddy system.

Ambition in Action Monitoring progress /In practice, a business plan refers to the types of measures expected to be used and may quote previous figures as evidence of past performance.

Ambition in Action Monitoring progress /One simple tip: KEEP YOUR RECORDS UP-TO-DATE! Accurate, easy to read records of business income and expenses are necessary for measurements that can be used to monitor progress.

Ambition in Action Monitoring progress /An income statement and a balance sheet are the records from which these measurements are made.

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