To their objectives, organizations and companies draw up plans detailing the actions required to meet their goals. This process of preparation, implementation, and monitoring of plans is known as planning or planning.
The financial planning, which seeks to maintain economic balance at all levels of the company, is present in both the operational and strategic area. The operational structure is developed according to its involvement with the strategy.
The strategic area is formed by marketing ( marketing ) and finance. Marketing is responsible for formulating strategic business alternatives, while the financial sector quantifies the strategies proposed by marketing.
On the other hand, the operative division is formed by sectors such as production, administration, logistics and the commercial office. All these divisions are responsible for specifying the policies of the strategic plan.
Financial planning, therefore, is responsible for providing a structure according to the business base of the company, through the implementation of an analytical accounting and the design of financial statements. Visit on: Carson Wealth Management Group
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Thanks to financial planning, managers can quantify the proposals made by marketing and evaluate their costs.
In other words, financial planning defines the direction an organization must follow to achieve its strategic objectives through a harmonic action of all its members and functions. Its implementation is important both internally and for third parties who need to make decisions related to the company (such as the granting of credits, and the issuance or subscription of shares).
It is necessary to clarify that financial planning can not only refer to certain financial projections that the financial statements of results and balances of a given indicator show, but also includes a series of activities that are carried out at different levels: strategic level, functional level and operational level of a company.
Development of financial planning
In a planning process actions are carried out that aim to improve or solve any problem that the company may be going through; for this, it is necessary that the work of the different parts that make it up to be reunited. Financial planning is what is responsible for moving to economic terms, the strategic and operational plans of a company, taking into account time and a space in which they will be developed.
Through this type of planning you can visualize the strategy of entrepreneurship, taking into account three very decisive issues: investments (knowing how to make the most of the resources available), capital or loans (having a complete knowledge of the structure of money owned) and shareholders (know what can be offered to those who wish to be part of the company, knowing what to expect in case of financial difficulties).
Within the process of financial planning, there are several branches, where each one is responsible for developing a specific task. For example, the budget planning process is responsible for dealing with issues that have to do with the money you have and know how to choose where and when to invest correctly in a long period. For its part, the process of cash flow management is the one that is responsible for the investment of money in the very short term, in a purely operational and immediate sense.
The development of the financial program begins with long-term planning where the company’s objectives are materialized, what is desired to achieve and the vision we have for the future.