Financial planning is the design of complex plan of functioning and development of the enterprise in value terms in order to provide the continuous successful work. Budget or the system of budgets should indicate the guidelines of daily activities of the enterprise management.
The general financial planning is worked out in walk-through way with all necessary intermediate coordinations on enterprise services and subdivisions. The process of financial planning means not only planning of financial indexes of the company in a whole but also includes:
– planning of natural indexes;
– planning on structural subdivisions.
Financial planning occurs incessantly in sliding-scale way: first two months – every week, then – every month (during the following two or three months), then – every three months. The process of planning on the further periods is formed after comparison of effective (expected) results of the previous period with planned ones.
All plans (budgets) are explicated in dynamics
Tasks which are solved in the process of financial planning are usually the following ones:
– decrease of temporary duty of managers;
– coordination of manager’s activity;
– forming of cordinated plans in walk-through way;
– the one whole “language” of interactions between managers in different services – financial language of payments and takings, income and expenses.
The general scheme of financial planning
It is effectually to use the classic scheme, just like here:
1. The analysis “goals – plan – fact”.
The middle-termed goals up to one year are browsed here. Periodicity of analysis on the one side should be rather rare in order to control large changes and on the other side rather frequent in order to bring in corrections. The most rational period of analysis is from one month to three months.
The results of analysis are followed with concept note in which the following indexes are reflected:
– general characteristics of the course of business;
– significant, main sucesses and causes/factors of its appeearance;
– significant, main failures and causes/factors of its appeearance;
– recommendated/suggested measures on the forcing of positive and weaking of negative factors.
2. Enforcement of actions.
Multiple control of actual course of business and operative leverage are occurred during this stage. These are very important for the management goals. In fact this is the realization of correction retractions.
Illustrative business plan samples
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