In financial planning, the main task is to find the most profitable option for the organization.
The financial plan is an order of development and functioning of the company in value terms. It predicts the effectiveness and financial results of the investment, financial and production activities of the enterprise.
Drawing up a financial plan is an essential part of a firm’s business plan. When developing it, one must proceed from the definition of the funds that are necessary for the development of the company, as well as from the evaluation of the plan as an investment project. That is, the envisaged costs should be economically justified.
In the financial plan of the enterprise should be reflected the final results of economic activity. It should cover commodity, material values, interdependence and interconnection of cash flows.
The financial plan is the final results of the company. The information base includes accounting documentation, the most basic documents are the balance sheet and its annex.
The system of financial plans is reflected in:
- income and income funds;
- expenses and deductions;
- credit relationships;
- relationship with the budget.
A strategic financial plan is a procedure for realizing the tasks and goals of a company, the expected savings and investment strategies. Its basis is the determination of the company's need for capital to ensure the production and economic activities of the enterprise.
A tactical financial plan is an annual balance of expenses and income of an organization. Due to inflation, plans are drawn up once a quarter and periodically adjusted, taking into account the inflation index.
The purpose of the preparation of the financial plan is the need to link the income of the enterprise with its costs. If more funds are received, then they are sent to the organization’s reserve fund . In the opposite case, measures are being developed to minimize costs. The organization may receive additional funds from third parties, from the issue of securities, loans, loans, etc.
So, we should consider in more detail the paramount task of financial planning. The management of the organization should be aware of changes in economic activity in order to be able to make plans for next year. Persons who are interested in the activities of the enterprise have special requirements for its results.
When drawing up a plan for certain types of activities, one should know what economic resources will be needed in order to fulfill the tasks.
When implementing the plans laid down in the budget, it is necessary to record the actual values of the results of managing. When comparing planned with received there is a place to be budget control. In this case, the main attention should be paid to indicators that deviate from the planned, and the analysis of the changes.
As a result, the company receives new information about the activities. That is, by conducting budget control, you can identify weaknesses in the organization, find out in which areas unsatisfactory results are observed. Probably, the problem may be in the financial plan itself, but in this case the management will know that some points in the planning should be corrected.