CHCFIN010 — Apply basic concepts of small business to financial counselling

Elements & performance criteria

Performance evidence

• provide financial counselling consultation service for at least one small business client to: - confirm business structure - identify any potential conflicts of interest - determine business financial status - assess business capacity to meet financial obligations - identify the impact of the business financial status on the personal financial position of the client - make an appropriate referral for further support
• document client files according to organisational requirements.

Knowledge evidence

• definitions of small business: - Australian Securities and Investments Commission (ASIC) exemption for financial counselling agencies for the purposes of the AFSL exemption - Australian Financial Complaints Authority (AFCA) definition - Banking Codes of Practice Definition - funding agreements or deeds that go to the scope of role or definition - peak body or other requirements that go to the scope of role or definition - agency requirements - agency policies or state association policies
• distinguish between simple and complex small business financial issues, based on business structure, type of problem, parties involved
• types of small business structures: - sole trader - partnerships - companies - trusts
• accessing the ABR
• National and State or Territory legislation and guidelines applicable to small business
• legal frameworks applying and not applying to small business: - application of the National Credit Code - ability or otherwise to access External Dispute Resolution (EDR) schemes, Australian Financial Complaints Authority (AFCA), Telecommunications Industry Ombudsman (TIO), energy and water ombudsman - application of banking codes of practice to small business - application of the Australian Consumer Law to small business - referral to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
• basic operational requirements for a small business: - overview of potential financing arrangements - business insurance - commercial and property leasing arrangements
• types of financial data relevant to small businesses and how to access or assemble this information: - cash flow - balance sheet - profit and loss - statement of financial position
• ATO requirements such as types of main taxes paid by small business and processes for collecting and reporting tax and income including: - GST - Business Activity Statements (BAS) - PAYG and PAYG Withholding - Company tax - Superannuation liabilities for employees
• indicators of business ability to pay debts and obligations, including: - negotiating with creditors - insolvency and bankruptcy - superannuation entitlements - ATO debt - debts with banks and finance companies including business and personal debt - equipment leases - commercial tenancy agreements - utilities and telecommunications
• processes for making referrals to external services: - identifying when client need is in scope, or beyond scope of own job role including the financial counsellor’s role in working with companies - scope of role in relation to what the financial counsellor cannot do: - business plans - advice about managing the business
• impacts of small business on a client’s personal finances: - distinguishing between business and personal debt - personal liability for business debt - legal obligations and implications - financial abuse and small business including coercion for loans, coercion for company directorships and associated legal responsibilities - impact of relationship breakdown: - ownership of assets and debts - financial or economic abuse
• advice and actions that may assist the client to improve their financial position: - government grants and loans - accessing small business advisory/mediation services - decreasing business expenses or selling assets - debt prioritisation - payment arrangements with creditors, ATO - Internal Dispute Resolution (IDR) and External Dispute Resolution (EDR) where available - accessing business insurance - challenging unfair contracts - legal action through courts and tribunals
• insolvency and bankruptcy: - common signs - difference between bankruptcy and insolvency - referral options to paid services for insolvency advice
• processes for closing a business, including: - business name cancellation - finalising ATO obligations and all employee entitlements - terminating any licences, leases or contracts on foot - advising customers, contractors - referral options for advice regarding companies
• external resources and services that can assist small businesses including: - government grants and loans - small business advisory and assistance services - small business mediation or dispute resolution services.

Foundation skills

• Reading skills: research and interpret information from a range of complex documents.
• Writing skills: produce written materials in the required format, style, structure according to the intended audience and purpose of correspondence.
• Oral communication skills: ask open and closed questions to gather and confirm information from interviewee participate in a variety of spoken exchanges with others, using clear and direct language to convey, request and confirm understanding of information.
• Numeracy skills: access required information from familiar and unfamiliar financial reports.
• Problem-solving skills: identify and analyse discrepancies in information gathered.
• Planning and organising skills: logically sequence information and analysis in required formats to address client requirements.
• Technology skills: use main features and functions of technology and software programs to complete work tasks.

Unit content sourced from training.gov.au — © Commonwealth of Australia, licensed under CC BY 4.0. Auditori is not affiliated with the Department of Employment and Workplace Relations.

Questions about assessing CHCFIN010