The RTO Financial risk looks at business viability. It is critical to the ongoing sustainability of an RTO and the investment it makes in its services. If RTOs are not viable, then this negatively impacts on the quality of its training and assessment outcomes and on learners.
Operational and financial business standards therefore provide important protective measures for the learner and RTOs, as well as acting as a disincentive for under prepared organisations to enter the market.
Sitting in a hotel room in the far north of Australia in the wet season means that nothing dries. I wiped down the benches, and they remain wet an hour later, my laptop has dampness on the keyboard as I open it to type up this blog, my keys are damp. I love the moist air of the tropics, the feeling on my skin that I never get in the dry when I am at home, it a blessing. I have just hung up the telephone from someone thinking about RTO registration. I bet they weren’t standing outside in the wet (sheltering) from the pouring rain!
The conversation went along the lines of:
- How long will it take,
- What do I need to do and
- What qualifications do I need (or my trainers and assessors need)
I find these are common questions so wanted to assist where I can. So I decided to put together a series of videos to assist people who have these very questions. you need to put in your name and email address, and then they are sent directly to you.
The first one, “How long will it take?” has been answered by ASQA recently; the ASQA Application processing times are shorter if the RTO is compliant, and everything is done correctly.
The financial risk for an applicant / RTO at initial registration and renewal of registration is considered. Financial risk indicators focus on the financial viability of an applicant / RTO and the potential impact on the delivery of quality training and assessment services and outcomes.
RTO Financial risk indicators are indicators of the likelihood that quality skills outcomes will not be achieved.
The financial risk is to show that you have the resources to support the business. ASQA want you to have a sustainable business. So do I.
It is more about getting the figures right then having an amount in the bank. ASQA have recently come out and said there is no requirement for an organisation to demonstrate any specified minimum value of total assets. However as a business owner I still recommend that
you are able to show at least six months of funds at your disposal to cover capital improvements, rent or commercial mortgage payments, salaries, advertising and marketing costs and other general start-up costs. Even if it is for your own and family sanity.
To see the ASQA information sheet go to: http://www.asqa.gov.au/verve/_resources/FACT_SHEET_Financial_viability.pdf