Business Financial Planning
Finance in relation to business is concerned with
the task of providing funds needed by the enterprise in terms that
are most favorable in the light of its objectives. The finance
function of a business is concerned with procurement of funds and
its effective utilization in business. It covers financial
planning, forecasting of cash receipts and disbursements,
realizing of funds, using and allocation of funds and financial
control. Financial planning helps in defining financial goals,
setting objectives and developing a plan to achieve them. Planning
is not master-minding the future, and any attempt to do so is
foolishness. Human beings can neither predict nor control the
future. For this reason, management has to clarify their
objectives and determine what actions must be taken, when, by
whom, and at what cost to achieve the cherished goals. Financial
planning is the process of evaluating different investing and
financing opportunities available to a firm and selecting the best
one from the available options.
The planning requires a long-term estimate of profits which in
turn involves a projection of sales and costs of operation for a
period of years. Accordingly, long range financial planning
becomes essential for a company that wishes to grow. The company
has to establish objectives and goals as part of a master plan for
long range survival and growth. Coordinated thinking forms the
basis of financial planning for making an optimum utilization of
funds, particularly of cash balances.
Unneeded cash can be invested in income-producing securities.
Financial planning is used as a control device to fix standards of
performance and evaluation of the results. It is used to pre-test
the financial feasibility of various programs and in that sense it
is of crucial importance because action once taken becomes
difficult to retract.
Financial Planning provides detailed information on Financial
Planning, College Financial Planning, Financial Planning Software,
Business Financial Planning and more. Financial Planning is
affiliated with
Financial Risk Management.
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