ASSESSMENT TASK 2

COURSE CODE AND TITLE

CPC50220 Diploma of Building and Construction (Building)

UNIT CODE & UNIT TITLE

CPCCBC5019 - Manage building and construction business finances

Guide to assessment
Assessment for Competency
Please read the assessment instructions carefully; you must understand all the requirements of
your assessment. If you have difficulty with the terminology or the steps to follow, please speak to
your teacher before commencing.

The Criteria for Satisfactory Completion of Task tables included for each assessment task provide
you with clear information about the particular skills and abilities that your assessor will be looking
for in your work. Where applicable, you are encouraged to self-assess your work so that you can
be confident you will meet the stated criteria for satisfactory completion of the task.

There might be quality checkpoints highlighted throughout the assessment that you need to
observe. At these points, your teacher will check your work before progressing.

During or following an assessment you may be asked questions by your teacher to clarify or verify
the assessment evidence.

On completion of each assessment, your teacher will provide feedback, either in your Assessment
Record Book for the unit or in VU Collaborate. You will have an opportunity to record your
comments about the assessment in your Assessment Record Book or by emailing your teacher if
your assessment is in VU Collaborate.

Assessment Extensions
You are expected to submit your assessments by the date/s outlined in the Unit Guide and VU
Collaborate Learning Space. If you are unable to complete an assessment by the due date, you
can request an extension as outlined in the Assessment for Learning – Assessment Procedure
(VET) Part F.

Special Consideration
This applies to situations where you require an extension beyond ten working days. Applications
for special consideration must be made within three working days of the assessment due date as
outlined in the Assessment for Learning – Assessment Procedure (VET) Part F.

Re-Assessment
As per the Assessment for Learning – Assessment Procedure (VET) Part G Re-assessment, if you
do not achieve the required standard to achieve competence, you will be given one opportunity to
be re-assessed.

Assessment Appeals
If you disagree with the outcome of an assessment task, you have the right to request a review of
the assessment. You will be allowed to record your concerns on the Assessment Record Book for
the unit or by emailing your teacher if your assessment is in VU Collaborate.
In the first instance, such requests will ensure that your work is reviewed by a second person
within the teaching area. You will be advised of the outcome of this review in writing, most likely by
email.
If you wish to take further action, you will need to lodge a formal appeal. Instructions on how to do
this can be found at https://www.vu.edu.au/current-students/campus-life/advice-support/integrity-
office/complaint-resolution, on the student portal, or in VU Collaborate.
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Role of the Assessor
Your assessor (the teacher) will provide you with all the required information about the assessment
process and conditions before the assessment takes place.
Your assessor will use the criteria listed in the relevant Criteria for Successful Completion of the
Task table to assess your performance or submission. This ensures that the outcome given is fair
and consistent.

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Assessment Task 2
Assessment Task Title: Practical assessment
This practical assessment assesses your skill and knowledge required to manage and administer
finances within a building and construction business. It includes managing business financial risks,
revenue and expenditure and meeting statutory financial obligations.

Instructions for the Student:

This assessment is an individual practical assessment in which you will be required to gather
information and conduct number of activities where you will identify requirements of the business,
manage finance, and process taxation, insurance, and payments.

If you require adjustments to the assessment task or you cannot access the required resources,
please speak to your teacher about this before the task is released on VU Collaborate so
alternative arrangements can be made.

Assessment Location:
N/A

Assessment Timing:
For the assessment release and due dates refer to the Delivery and assessment schedule from the
Unit guide. You are required to complete this assessment in your own time.

Resources required for this assessment:

To complete the assessment, you will require:
• PC with internet connection and MS office
• Access to VU Collaborate for an assessment task, templates and e-learning resources
that will be used for reference.

Documents to submit:
• You are required to submit completed CPCCBC5019 Assessment Task 2 by the due date
using the allocated dropbox folder in Collaborate (CPCCBC5019 – AT2)
• All assessment documents should be labelled correctly within the file path of the documents
e.g., student ID_student name and surname_unit Code_Assessment number
• Students are also required to supply a completed VET Assessment Cover Sheet with each
assessment task.

NOTE: All submissions uploaded to Collaborate will be checked for plagiarism to ensure the
authenticity of the submitted work. In case plagiarism is detected case will be dealt with per
Academic Integrity Policy.

Satisfactory completion of the assessment task:

• To achieve a ‘Satisfactory’ result for this task you must meet all assessment criteria listed in
the criteria table below.
• If you receive an ‘Unsatisfactory’ result you will be required to review the feedback from the
teacher, correct part of your work that was found unsatisfactory, and resubmit the
assessment document again.

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 Resubmission Attempts:
As per the Assessment for Learning – Assessment Procedure (VET) Part G Re-assessment, you
will have two attempts for this assessment task. If your first attempt is unsuccessful your teacher
will give you feedback. Review the feedback and your learning materials before resubmitting /re-
taking the assessment. If you do not demonstrate competence in your second attempt /submission
you should speak with your teacher about the options available to you.

Assessment Tasks:
This is a practical assessment related to the processes of managing finances with in building and
construction business. You will be required to get involved in the finances of the business to
understand the cash flow, taxes and how payments are made to the employees, by responding to
given scenarios.

In doing so you will be:

• Identifying business and organizational requirements of the simulated business
• Managing business system and finances,
• Lodging tax and monitor insurance covers and loans, and
• Reviewing ongoing business finances.

This task has three parts. Read the tasks requirements carefully. Make sure that you follow the
instructions and address all parts of the given tasks.

Task 2.1

Scenario:
You are the owner of a building and construction business. Your business:
• uses a sole trader structure.
• is registered for GST
• has the trading name ‘[Your Name] Building and Construction Services’ (e.g. ‘Julie Smith
Building and Construction Services’)
• has two employees and engages contractors and suppliers.

Your Task:
Gather the information to identify business and operational requirements of your building and
construction business. In doing this you must cover the following:

1. Identify business and operational requirements and highlight the legislation and
regulations which need to be followed while performing construction work.
2. Identify the business areas that need expert advice and assistance.
3. Discuss your obligations and responsibilities of managing building and construction
finances.
4. List sources you will use to inform the annual budget and cash flow forecast.
5. Prepare a Financial risk assessment by identifying at least three risks to your business
finances and an appropriate treatment strategy for each risk. Document your risk
assessment using the template provided in this document.
6. Prepare a customer debt collection policy and procedure for your organisation to meet
and exceed your accounts receivable goals.
7. Establish an accounting system to manage your business’s finances. You can use the
software of your choice, although it is suggested you use software with a 30-day free
trial period. Software with a free 30-day trial includes (but is not limited to):

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 Xero - https://www.xero.com/au/try/signup/
MYOB - https://www.myob.com/au/accounting-software/free-trial

To complete this task, you are not required to connect your personal bank account to your
accounting software. Depending on the software you use, you may need to add details for a
made-up bank account to manually enter transactions. If you need to do this, you can use
these account details:
Name of bank: ANZ (AU)
Account type: Everyday
Account name: Business Account
BSB: 012-003
Account: 123456789
Currency: AUD

Take a screenshot of the dashboard or landing page of your accounting software. Your
business name should be visible in your screenshot.

Task 2.2

Scenario:
A potential client has approached your business with regard to conducting a new home build. The
client wants the project to be completed between November and April. The contract price for the
construction of the townhouse is $680,000 with a commencement date on 1st Nov 2023. The
signed contract includes the following progress claim schedule.

Stage Planned completion date Percentage of contract

value
Deposit 1st Nov 5%
Base stage 15th Nov 10%
Frame stage 15th Dec 15%
Lockup stage 15th Jan 35%
Fixing stage 28th Feb 20%
Practical completion 29th Apr 15%

Your business has payment terms of 14 days.

Your Task:
In this task you are required to manage business finances for given scenario by doing the following:

1. Calculate the interim invoice amounts (inc. GST) and identify the latest date (within your
payment terms) when the payment for each instalment will be received.
2. Identify the earliest date you would aim to schedule payment for the following services:
a. AGV Concreting Pty Ltd - for pouring concrete footings.
b. Timber Mart Pty Ltd - for delivery of structural plantation pine for framing.

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 c. Clarke’s Plumbing Supplies Pty Ltd - for delivery and installation of kitchen and
bathroom sinks
d. Norman Hardy T/A Hardy Building Surveyors - for assessment of building frame
3. Using your accounting software record the invoice you have received from your
contractor and make a payment via your bank account by entering the correct payment
details into the fields provided in your online banking system. (Include the screenshot
and record the data in the table below.) (Contractor invoice is provided in your
assessment folder on collaborate)
4. Create an invoice with number: KSFS001 for the Frame Stage progress payment and
record this invoice in the accounting system as paid on 22nd Dec 2023. (Include the
invoice and the screenshot in the space provided below).
5. Draft the email to your client regarding the overdue amount of the fixing stage invoice
KSFIX001.
6. Prepare six months cashflow forecast and calculate the net cashflow for each month.
The total of your monthly cash outflows is listed in the table below.
7. Identify the gross and net profit for each project stage. Your direct costs and business
overheads are listed in the table below.
8. Identify the financial ratios (to two decimal places) as part of conducting a financial
health check on your business.
9. Provide brief explanation on what is your financial health of the business according to
the calculated ratios, and what measures you can apply to improve it. (at least two
measures)

Task 2.3

Scenario:
When you set up your business, you took out a small business loan for purchase of company car
as follows:
Loan amount: $40,000
Interest rate: 3.75%
Monthly fee: $15
Loan period: 5 years
Repayment frequency: Monthly
The car was purchased on 1st July 2023 and is used for both business and personal purposes by
one of your full-time employees. A logbook was maintained for 13-week continuous period,
disclosing 20% personal use.
Your full-time employee Gross fortnightly earning is $1,920 and superannuation at 9%.
Your business currently holds the following insurance policies:
- Public liability insurance
- Workers’ compensation insurance covering your two employees
- Commercial vehicle insurance for the car owned by your business
- Domestic building insurance policy mandated by Victorian Building Authority

Your Task:

1. Calculate the PAYG withholding tax and superannuation you need to pay for this employee
each fortnight. You can use the calculators provided by the ATO to identify these amounts.

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 2. Calculate expected monthly deductions from your business bank account to repay the loan
and the remaining principal balance on 31/12/2023. You can use the online calculator for this
task.
3. List changes you need to make to your insurance policies if the following occurs:
a. Your business purchases two new vehicles.
b. Your business takes on a new employee.
c. Your business takes on a building project in NSW.
4. Calculate Fringe Benefits Tax for the year and submit Fringe benefits tax (FBT) return
2023/2024. (Attach your tax return as an appendix to this document)

Templates to record your answers are provided in this document. Any additional documents you may
generate need to be included as an Appendix.

Criteria for Satisfactory Performance of the Task

Your teacher will evaluate your work according to the criteria for satisfactory completion of the task
listed below.
If you wish to, you may use the “self-assess” column to evaluate your performance against each
criterion.

ASSESSMENT TASK 2 Self-Assess

Task 2.1

1. Provided a summary of building and construction business legislation,

regulations and operational and business requirements
2. Identified the business areas that will require expert advice and
assistance.
3. Discussed business owner’s obligations and responsibilities of managing
building and construction finances.
4. Documented a list of sources from which financial information will be
gathered.
5. Conducted a financial risk assessment, including the identification of at
least three potential risks and appropriate treatment strategies for each.
6. The customer debt collection policy includes contingencies for debtors in
default, to maximise cash flow.
7. Established an accounting system for the management of business
finances.
Task 2.2

1. Accurately calculated interim invoice amounts and scheduled dates for

receiving income.
2. Scheduled payment dates for project expenses based on a project
invoicing schedule.
3. Recorded a contractor invoice within an accounting system and
accurately entered payment details for the purpose of completing a
payment via bank transfer.
4. Created an accurate invoice using an accounting system and recorded
receipt of a client payment within an accounting system.

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ASSESSMENT TASK 2 Self-Assess

5. Created a final notice email for the purposes of collecting outstanding

debt from a client inline with policy and procedure.
6. Accurately calculated net cash monthly cash flows over the life of a
project.
7. Accurately calculated gross and net profits based on direct costs and
business overheads occurring during a project
8. Accurately calculated gross and net margin ratios to assess project
profitability
9. Assessed the financial health of a business and identified two actions to
improve financial position.
Task 2.3

1. Accurately calculated liabilities relating to a business employee.

2. Accurately calculated loan repayments due to occur each month and

estimated remaining principal balance.
3. Identified changes to insurance coverage arising from changes in
business situation.
4. Provided accurate calculation of Fringe Benefits Tax and full field
business tax obligations according to ATO requirements.

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Assessment Task 2

Task 2.1

Requirements of the business

Identify business and operational requirements and highlight the legislation and
regulations which need to be followed while performing construction work.

Identify the business areas that need expert advice and assistance.

Discuss your obligations and responsibilities of managing building and construction finances.

List sources you will use to inform the annual budget and cash flow forecast.

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Risk Assessment

Company name:

Assessment carried out by:

Date of the assessment: Review date:

Risk description Treatment strategy

Risk level
Total risk
Likelihoo

Impact

score
d

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Improbable (1 point)
Possible (2 points)
Probable (3 points)
Acceptable (1 point)
Tolerable (2 points)
Undesirable (3 points)
Intolerable (4 points)
Total Risk Scores/Levels
1-2
3-5
6-9
10-12
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Risk Likelihood Scale
Risk is unlikely to occur
Risk may occur
Risk is likely to occur
Risk Impact Scale
Minimal impact on business or profits
May have some impact on profits but is unlikely
to result in an overall loss
Serious impact to profits likely to result in an
overall loss
Major impact to business profitability and
ongoing operations
Low
Medium
High
Extreme
CPC50220_ CPCCBC5019_v1.0_Aug 2023
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Debt collection policy and procedure

Policy number:

Policy date:

Purpose of the policy

Procedures

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Accounting software

<Your screenshot here. Your business name should be visible in your screenshot.>

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Task 2.2

Business finance management

Stage Planned Percentage of Interim invoice Latest date you

completion contract value amount (inc. GST) will receive
date payment
Deposit 1st Nov 5%
Base stage 15th Nov 10%
Frame stage 15th Dec 15%
Lockup stage 15th Jan 35%
Fixing stage 28th Feb 20%
Practical completion 29th Apr 15%

Contractor Service Earliest date you will schedule

payment
AGV Concreting Pty Ltd Pouring concrete footings
Timber Mart Pty Ltd Delivery of structural
plantation pine for framing
Clarke’s Plumbing Supplies Pty Ltd Delivery and installation of
kitchen and bathroom sinks
Norman Hardy T/A Hardy Building Assessment of building
Surveyors frame

Invoice received.

<Your screenshot of the accounting system here. >

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Payee details
Warning: Please ensure all details are correct. We cannot check the account name matches the BSB or
account number. An incorrect BSB or account number will result in your money being paid to the wrong
account and may result in the loss of your funds.
Account Name:
BSB:
Account No.:
Transaction Details
Amount
Description
Remitter name

Invoice paid.

<Your screenshot of the accounting system here. >

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Invoice created KSFS001 for the Frame Stage progress payment.

<Your invoice here >

Invoice paid.

<Your screenshot of the accounting system here. >

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Email to the client regarding the overdue amount of the fixing stage invoice KSFIX001

Cash flow Forecast

November December January February Mart April
Cash inflows

Cash outflows $70,000 $80,000 $120,000 $30,000 $18,000 $80,000

Net cash flow

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Gross and net profit
Stage Direct costs Business Gross profit Net profit
paid in this overheads paid
stage in this stage
Base stage $35,000 $5,000
Frame stage $68,000 $5,000
Lockup stage $149,000 $5,000
Fixing stage $86,000 $5,000
Practical completion $55,000 $5,000

Financial ratios
Gross margin ratio for Base Stage

Net margin ratio for Base Stage

Gross margin ratio for Lockup Stage

Net margin ratio for Lockup Stage

Gross margin ratio for Fixing Stage

Net margin ratio for Fixing Stage

Financial health of the business:

Measures for improvement (at least two):

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Task 2.3

Employee liabilities
PAYG withholding tax per fortnight
Superannuation per fortnight

Insurance policies
Situation Your action
Your business purchases two
new vehicles.

Your business takes on a new

employee

Your business takes on a

building project in NSW.

Loan and interest repayments

Expected monthly deductions
Remaining principle on 31/12/2023

Fringe Benefits Tax for the year

Fringe Benefits Tax return

<Attach the document in the Appendix>

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Result of this assessment

Result ☐ Competent ☐ Not Yet Competent

Assessor comments

Assessor signature Date signed

Assessment Task Review

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