BSBFIN501 Simulation Pack

Attachment 2-Simulation Pack
BSBFIN501 MANAGE BUDGETS AND FINANCIAL PLANS
Case Study – KING EDWARD VII COLLEGE
King Edward VII College has been operating for 5 years. The College is based in Sydney CBD and
has an additional campus in Melbourne. The College offers a range of courses in management,
marketing, human resources and international business. It currently has around 500 international
students enrolled across all of its courses. Courses are offered at all levels, from Certificate II to
Graduate Diploma.
King Edward VII College is very popular due to its competitive pricing structure, innovative teaching
methods and state of the art facilities. However, due to the decline in international students because
of COVID-19 it wants to expand into other areas, most notably enrolling Australian students.
The College currently employs 25 staff members that include the CEO, a Finance manager, Sales
and Marketing Manager and Sales and Marketing Assistant, Promotions Officer, Human Resources
Manager, Operations Manager, Administration Manager, Office Assistant, Receptionist, Academic
Manager, Student Services Officer and approximately 14 trainers and assessors. There is also a
Board of Directors consisting of the four owners of the company.
Academic Manager
Administration Manager Office assistant
Finance Manager
Assessors and
Operations Manager
Board of Trainers
CEO
directors
Sales and Marketing

Assistant
Sales and Marketing
Manager
Promotions Officer
Student Services
Officer
Human Resources
Manager
Receptionist
Hilton Academy: Level 6, 250 Collins Street, Melbourne, VIC. 3000, Australia.
Email: info@hilton.edu.au | Website: www.hilton.edu.au
BSBINS603
RTO: 40735 CRICOS: 03796A ABN: 24 111 139 578 Page 1
Version 1.0 – Updated on 01 March 2021
As the Sales and Marketing Manager for the company, you are allocated a budget each year to spend
on marketing. The marketing budget is a key item to achieve overall sales targets.
This year the budget you have been allocated is $80,000. Your budget does not include salaries and
wages of staff, which is accounted for through another cost centre.
The marketing plan for the year includes the activities below. The amounts in brackets are the cost
projections for each activity:
• Redesign web site to improve branding ($4,000 in December, another $4,000 in April and $2,000
in May)
• Design and implement an incentive scheme for referrals by students ($500 per month)
• Conduct a radio advertising campaign from the start of February until the end of June, costing
$4,000 per month
• Online communications: newsletters, websites. Blogs, Twitter (zero cost: staff time only)
• Google ads ($500 per month)
• Graphic design ($5,500)
• Stand at the Education Expo in December (Package deal $10,000)
• Develop and publish Promotional Brochure in November ($2,500)
• Sponsor a community organisation to improve local community profile ($20,000 in March)

There is a desire to conduct a TV advertising campaign and a quote of $30,000 has been received to
run the campaign over a week. This is obviously well over the budget limit. However, it is considered
that this type of advertising will be beneficial.
This year due to the high marketing expenses the usual contingency amount of $10,000 has not been
factored in.
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King Edward VII College
Strategic Business Plan

2021 - 2023
Executive Summary
Established in 2010, King Edward VII College is a Registered Training Organisation (RTO) that
provides training to students in business and management.
Our principal purpose is to provide high quality training services to satisfy students’ needs.
Our training is nationally recognised and accredited to meet vocational and educational standards.
Courses are designed by highly qualified staff with extensive industry and training experience to
achieve teaching and learning excellence, flexibility and personal satisfaction.
We draw on our established relationships with industry and other stakeholders to ensure our courses
are appropriate to the demands of our clients and consistently meet their expectations.
Quality is maintained in compliance with the national VET Quality Framework and through our
continuous improvement system.
A key objective is to develop the required knowledge and skills for clients to be job ready and
competently undertake their chosen role in a wide range of business areas.
Mission
King Edward VII College provides high quality industry training that engenders participation and
achievement.
Strategic Objectives
• To be a leader in vocational education and training
• To be a leader in innovation in the vocational education and training sector
• To establish and maintain high quality infrastructure supporting clients and staff
• To be well led, high performing, profitable and accountable
• To develop our people and resources
Values
The core values underpinning our activities are:
• Sustain excellence in training and assessment.
• Promote innovation across all of our business operations.
• Be a collaborative and caring community.
• Embrace difference and diversity.
• Demonstrate integrity and equality of opportunity in all activities.
• Operate with openness and accountability.
Overview
This new business plan reflects our approach to the coming years. We commenced operations in
2010 with relatively low student numbers which then increased significantly.
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We do not expect these numbers to increase significantly over the period 2021 – 2023 as we are
currently nearing capacity in our Melbourne and Sydney campuses.
We also expect stable costs for our existing campuses with no major increases expected. However,
there will be significant financial investment required for the new campuses.
Resourcing
Financial
Due to the success of the College to date, there are significant cash reserves to fund the new
campuses, plus general initiatives, including quality training and assessment and continuous
improvement and innovation.
Our financial objectives are to maintain these cash reserves, whilst still investing in the future.
Our sales targets are $5,000,000 per year.
Maintain a net profit ratio of at least 40%.
Staffing
Regarding staffing, existing staff will perform key functions across the new campuses such as human
resources and marketing. They will also perform any new functions arising such as responsibility for
quality and innovation.
Operational Objectives
The following identifies the operational objectives we plan to achieve in pursuit of our strategic
objectives.
2021 Priorities Key performance indicators
July Improve web site information to 10% increase in students by

attract more students June 2021
Improve market share by 5%
September Conduct annual internal audit Audit conducted, and

continuous improvement
identified
October Develop and implement a All staff trained in cultural

cultural sensitivity and awareness
awareness program for staff
December Staff performance reviews All staff performance reviews

conducted
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January Identify staff required for new Staff recruited and in place
campuses
January Provide information sessions Identify at least 50 potential

showcasing the College sign ups
(existing campuses)
March Develop online learning for all All courses offered online by
courses end 2021
July Conduct annual internal audit Audit conducted, and

identified
Increase student numbers by
12% by June 2021
November Staff performance reviews All staff performance reviews

conducted
February Undertake scoping study for Scoping study completed by

possible offshore campus June 22 and decision made as
to whether to proceed
July Conduct annual internal audit Audit conducted, and

identified
November Staff performance reviews All staff performance reviews

conducted
The Market
Market characteristics & conditions

King Edward VII College has two broad segments to its target market consisting of people wishing to
gain entry to the industry, as well as people already working in business and management who want
to formalise or develop their skills.
Workforce needs for this sector have been identified as the need to develop an adaptive, responsive
and diverse workforce, keep up with technology and to build effective leadership and management
skills.
This has informed King Edward VII’s choice of course delivery.
We also intend to capitalise on market needs for delivery of blended (classroom and online), as well
as online courses.
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There are many training providers in our sector and King Edward VII seeks to offer a point of
difference through our competitive pricing structure, innovative teaching methods and state of the art
facilities.
Although we will be setting up new campuses in Brisbane and Adelaide in mid 2021 and commencing
in the new financial year (July 1) we expect these to be loss leaders initially. Our main aim is to build
our brand. We do not expect there to be more than 50 students in each campus in the first year, as
these locations are less popular than Sydney and Melbourne but are important for building our brand.
Situation Analysis
Strengths Weaknesses
• Price, value and quality • Focus on business and management

courses only
• Clear understanding of student
requirements • Substantial investment in Brisbane and
Adelaide meaning large financial outlay
• Delivery mode suitable for client
requirements • High staff turnover of trainers
• High quality learning & assessment • Lack of diversity in workforce

materials
• Committed to quality ethical practice
• Ability to adapt to changing market

conditions
• Effective and practical policies and

procedures
• Competitive pricing
• Friendly organisational culture
• Level of available finance for investment
Opportunities Threats
• Potential for offshore delivery • Changes in Industry/ Government

legislation affecting students
• Target market experiencing growth
• Adverse effects of government policies
• To target other States and Territories
• High level of competition
• Current portfolio of courses popular in
target markets • Other RTO’s bad/ malpractice creating
poor perception of training providers to
• Potential to apply for Government funding
clients
• Explore innovative processes and product
• Predicted uncertainties in the world
offerings
economy impacting level of demand for
training
• Low price competitors
• Failing to satisfy clients demands

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Marketing Strategies
Potential students make their decisions based on the reputation of the organisation, quality of
courses, pricing, employment options and personal recommendations amongst other factors.
Our strong vocational emphasis and continual industry consultation will ensure our courses are
appropriate to develop the skills and knowledge currently demanded by employers and students.
Our market decisions are based on extensive and continuous market research, targeting market
segments and clients within industry. We collect our data from a variety of sources including current
and potential clients, VET and business sectors, competitors, media and government along with many
other sources.
We plan to develop our market share by:
• Offering online and blended learning
• Providing face to face information sessions
• Improving our web site
• Continually improving the quality of service given to clients’ pre-enrolment, during course delivery
and through the provision of support services while remaining price competitive
• Focusing on the provision of courses required by industry
• Maintaining effective communication channels with all stakeholders to ascertain industry

requirements and then develop products and manage services accordingly
• Continually improving communication channels with all our stakeholders, ensuring a flow of
timely and accurate information to facilitate effective planning and decision making
• Consistently satisfying individual client needs and demands at the same time as developing the
knowledge and skills required by industry
• Targeting identified growth markets with planned, market appropriate campaigns employing a
variety of promotional strategies and advertising mediums
• Offering attractive fee structures to our clients
• Continually improving the skills, knowledge and effectiveness of King Edward VII College through
our commitment to training and development
• Regularly reviewing the effectiveness of all our operations and making improvements when and
where necessary.
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King Edward VII College Financial management

Policy and Procedures
King Edward VII College Budget Policy and Procedures
Purpose of the Policy

King Edward VII College will operate in a financially sustainable manner balancing revenue and
expenditure.
Our financial planning process are as follows:
• Financial objectives set for each year.
• Budgets set for each year.
Procedures
Budgets are set for each applicable department. Budgets are based on expected sales and expenses.
Budgets will be set by the finance team. Each manager must review their budget and may contact the
finance team for any revisions. They must present a clear argument for any changes.
A contingency amount is usually included in each budget to account for unexpected costs.
Managers are expected to inform their team of the budget and to provide them with the required
resources and systems so as to fulfill their roles. Generally this will include regular meetings to
monitor the budget. Team members are expected to report all expenses to managers by providing
receipts and so on.
Budgets should be monitored by each Manager every month using our accounting system, Xero, to
make sure expenses are on track. Where changes are required, the finance team may be contacted
to discuss this. This should also include where contingency amounts need to be varied.
Each manager must review their budget amount versus actual amount at the end of the reporting
period. Variances of up to 5% over budget are acceptable. Differences between actual and budgeted
amounts must be described, as well as justifications for such.
King Edward VII College Finance Authorisation Policy and

Procedures

All finance transactions as noted in this policy are to be authorised by the noted authorised person
prior to the transaction being undertaken.
This policy is to be read in conjunction with other specific finance policies where relevant.
Procedures
Prior to any of the following finance transactions being undertaken, the authorising person noted must
authorise the transaction.
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Where additional policy is noted, this policy must also be adhered to when undertaking the finance
transaction.
Finance Transaction Authorised Person
Bank Accounts CEO/Finance Manager
Issuing Petty Cash Senior Managers
Business Credit Card Senior Managers
Authorising New Customers Finance Manager
Authorising New Suppliers Finance Manager
Purchasing Stock Senior Managers
Purchasing Assets/ Equipment CEO
Debt Collection Senior Managers
Payment of Invoices Senior Managers
Petty Cash Policy

Petty cash should be used to pay for small business expenses up to $100 where payments through
accounts payable or credit card are not justified or appropriate
Procedures
Issuing Petty Cash

Petty cash vouchers must be completed before any cash is taken from the petty cash float.
Only up to $100 can be disbursed at any one time.
All petty cash vouchers issued must be approved by a Senior Manager.
Once the petty cash is spent, a receipt or invoice should be attached to the voucher and returned to
petty cash with any balance of monies unspent
All completed vouchers must have the following details included:
• Issue date of voucher;
• Name of person who issued the voucher;

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• Amount of monies disbursed;
• Details of expense;
• Invoice or receipt
• Signature of approval person
Reconciling Petty Cash

Petty cash float is to be reconciled at least monthly. This is the responsibility of {insert relevant job title
here}
All petty cash expenditure must be entered into the financial system once the petty cash has been
reconciled.
The balance of monies and vouchers must equal the petty cash float amount before reimbursement
can be made.
Reimbursement of petty cash will be authorised by a Senior Manager.
Use of Business Credit Card Policy

This policy provides guidelines for the issue and use of business credit cards.
Procedures
An employee will only be issued a credit card once the Credit Card Authorisation Form has been
completed.
The business credit card can only be used for travel, authorised entertainment and purchases of small
value expenses or equipment up to the value of $500.
No cash advances are to be taken using the business credit card unless authorised by the Finance
Manager.
Where a business credit card is lost or stolen, the owner of this card is to notify the Finance Manager,
who is responsible for notifying the issuing agency and ensuring the card is cancelled.
The business credit card is not to be used for personal expenses.
All holders of business credit cards are required to reconcile the monthly credit card statement to the
expense form, attach all receipts for payments made on the credit card and have the expense
statement authorised by the Finance Manager.
Upon completion and authorisation of the monthly expense statement, these documents are to be
forwarded to the Finance Manager for payment of the credit card statement.
All business credit cards are to be returned to the business when the person is requested to by the
Finance Manager or where they are no longer an employee of the business.
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New Supplier Policy
Purpose
All new suppliers to the business must be reviewed and accepted in accordance with this policy to
ensure that the supplier service is aligned with the business objectives.
Procedures
Choosing a New Supplier

A new supplier must provide our business with quality products, great service, competitive pricing and
efficient delivery.
The following information table must be completed prior to agreeing to services
Supplier Selection Background Information
Business Name of Supplier:
Location of Supplier:
Products/Services provided by supplier: (Attach a list if necessary)
Name of business owner/ sales representative:
For how many years has the supplier been trading?
Supplier Selection Review Checklist

For each new supplier being considered the following checklist must be completed:
• Is the supplier pricing competitive?
• What are the payment terms for this supplier?
• What is the return policy for this supplier?
• Does the supplier provide warranties, guarantees etc.?
• Are the suppliers’ representatives knowledgeable of the products/services and industry?
• Is there an alternative to this supplier, has the alternative supplier been considered?
• What are the delivery services of the supplier?
• Has a credit check been undertaken for the supplier? (attach to this checklist)
• Has the Personal Property Securities Register (PPSR). been reviewed?
• Has the supplier been trade checked? (attach this to this checklist)
• Insert relevant additional information to assist in the decision of appointing a new supplier
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Appointment of Supplier
The appointment of a new supplier will be authorised by the Finance Manager.
All relevant details of the supplier will be entered into the financial system by Administration
Assistance once approval is obtained from the Finance Manager.
The Finance Manager will review information entered into the financial system and independently
verify the bank account or other payment details of the supplier to ensure payments made are to the
correct supplier
Supplier Payment Terms

All purchases from suppliers must be supported by a purchase order.
Payment terms for all suppliers must be reviewed by {Insert relevant job title here} every {Insert timing
of review here, recommended at least once a year}. Following this review each supplier must be
approached to seek improved payment terms by Finance Manager.
All supplier payment terms must be a minimum of 30 days.
Any variation to the above must be authorised by Finance Manager.
All supplier payments are to be reviewed once a quarter to ensure that payment terms are adhered to.
For payments made to any suppliers earlier or later than the agreed terms. The Finance Manager will
prepare a report that details the reasons why payment terms have not been adhered to.
This report will be reviewed and authorised by the CEO.
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Please review this report in order to be able to complete Section 3 of your Portfolio.
Budget Report – end of reporting period

Actual marketing spend
Website $12,500
Referral scheme $470 per month - 5640
Radio advertising Cancelled
Google ads $700 per month
Graphic design $5,550
Television advertising $30,000
Education expo $10,000
Promotional brochure $2,500
Community sponsorship $20,000
Notes on budget:
• No contingency amount factored into the original budget.
• Monthly monitoring missed on three occasions.
• Staff report difficulty in understanding how to monitor budgets.
BSBINS603

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Attachment 2-Simulation Pack

BSBFIN501 MANAGE BUDGETS AND FINANCIAL PLANS

Case Study – KING EDWARD VII COLLEGE

Administration Manager Office assistant

Sales and Marketing

• Google ads ($500 per month)

• Graphic design ($5,500)

• Stand at the Education Expo in December (Package deal $10,000)

• Develop and publish Promotional Brochure in November ($2,500)

• Sponsor a community organisation to improve local community profile ($20,000 in March)

Strategic Business Plan

• To be a leader in innovation in the vocational education and training sector

• To be well led, high performing, profitable and accountable

• To develop our people and resources

• Sustain excellence in training and assessment.

• Promote innovation across all of our business operations.

• Be a collaborative and caring community.

• Embrace difference and diversity.

• Demonstrate integrity and equality of opportunity in all activities.

• Operate with openness and accountability.

2021 Priorities Key performance indicators

July Improve web site information to 10% increase in students by

September Conduct annual internal audit Audit conducted, and

October Develop and implement a All staff trained in cultural

December Staff performance reviews All staff performance reviews

2022 Priorities Key performance indicators

January Provide information sessions Identify at least 50 potential

July Conduct annual internal audit Audit conducted, and

November Staff performance reviews All staff performance reviews

2023 Priorities Key performance indicators

February Undertake scoping study for Scoping study completed by

July Conduct annual internal audit Audit conducted, and

November Staff performance reviews All staff performance reviews

Market characteristics & conditions

• Price, value and quality • Focus on business and management

• High quality learning & assessment • Lack of diversity in workforce

• Committed to quality ethical practice

• Ability to adapt to changing market

• Effective and practical policies and

• Friendly organisational culture

• Level of available finance for investment

• Potential for offshore delivery • Changes in Industry/ Government

• Low price competitors

• Failing to satisfy clients demands

• Offering online and blended learning

• Providing face to face information sessions

• Improving our web site

• Focusing on the provision of courses required by industry

• Maintaining effective communication channels with all stakeholders to ascertain industry

• Offering attractive fee structures to our clients

King Edward VII College Financial management

King Edward VII College Budget Policy and Procedures

Purpose of the Policy

• Financial objectives set for each year.

• Budgets set for each year.

King Edward VII College Finance Authorisation Policy and

Purpose of the Policy

Finance Transaction Authorised Person

Bank Accounts CEO/Finance Manager

Issuing Petty Cash Senior Managers

Business Credit Card Senior Managers

Authorising New Customers Finance Manager