Forecasting and planning of Finance. Methods of financial planning. Financial planning at the enterprise

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2020-05-15 23:00:28

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Financial planning — an interesting phenomenon. It is believed that his involvement traditionally associated with business objectives, with the commercial sector. But this is not always the case. Finance planning may engage ordinary citizens in everyday life. What are the nuances of financial planning deserve special attention? What are the challenges in the framework of the relevant activities can stand in front of the enterprise?

What is financial planning?

Financial planning — the most important part of management activities in any commercial enterprise. Business best to develop in accordance with well-designed algorithm based on the model, the operation of which depends on factors that are predictable and transparent for the management of the company. Financial planning allows you to match the capabilities of the organization with the tasks that confront the owners of the enterprise. This process also allows the company management to find the necessary financial resources and effective scenarios for their use.

financial Planning

Financial Planning designed to assist the management in establishing the appropriate proportions between different types of resources possessed by the firm. This can be, in fact, the capital or fixed assets. The company engaged in financial planning, relates the various key performance indicators (such as, for example, the magnitude of the costs, the volume of production of goods, capital investments) with the current business objectives. This allows you to build a more sustainable business model, based on rational criteria.

Ratio planning and forecasting

In economic science defined the term, very close before us, namely, "forecasting". What is its specificity? The correlation between the forecasting and planning of Finance? In respect of the two marked terms, we can identify several common characteristics, namely: integrity of the object and its economic environment, and utilizing similar or identical techniques in the solution of tasks, goals, in line with the priorities in the development of the business.

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However, the forecasting and planning of Finance has a number of important differences. Regarding the first term, it does not imply strict adherence to revealed laws. They are usually probabilistic in nature and less detailed than those presented in the financial plan. Forecasting — this promising research opportunities of the enterprise, planning — development of algorithms, implementation of which is required due to the current challenges facing the leadership of the company.

Planning the public finances

We Can also note that the use of plans may assume certain obligations of the company to external players — investors or regulators. Thus, the planning of public finances is most often associated with strict reporting procedures of the entities that have access to other financial resources (usually budget) before the competent authorities. Forecasting, in turn, cannot be the basis for the corresponding control, as it uses, as we noted above, probabilistic criteria, which in practice may differ significantly from those determined in the corresponding preliminary analysis.

Financial planning finances

In the commercial sector forecasting is frequently the crucial component of the strategy of business development. For example, the plan of Finance a trading enterprise — as organizations that heavily depend on revenues — largely tied just at forward-looking indicators of demand from buyers of the goods. What would that entail? First of all, that the management company may require from subordinate structures of maximum conformity of results of activity expected numbers that are defined on the basis of forecasts.

Key tasks financial planning

Financial Planning involves the formation of a certain task before the leadership of the firm. Among those:

- the discovery of reserves that can allow you to increase the revenue of the company;

- increase of efficiency of use of capital;

The determination of the optimal formulas of correlation of costs and production plan;

- ensuring constructive interaction of the enterprise and its partner agencies — the banks, counterparties, customers in the aspect of financial communications.

In the process of solving the task in question, the management carries out activity in the following main areas: the movement of capital, financial, legal, and financial activity (accounting, reporting — inside or in front of state regulators).

planning Finance

These Are the main objectives of financial planning. We now investigate the key principles that underpin relevant activities of the company.

The Key planning principles

Learn key principles on the basis of which can be financial planning forenterprise. Researchers identify the following list:

- identify priorities;

- the incorporation of forecasting techniques;

risk analysis.

- coordination and control.

Let us Consider their nature in more detail.

Regarding this principle as the allocation of priorities, businesses are in most cases confronted with the fact that production and other tasks related to business development, acquire comprehensive. In order to solve all of them, it is often necessary to invest enormous resources, including in the decision of those problems which from the point of view of development of business are clearly secondary. The management of the company shall, thus, be able to identify the main directions of activities (and concentrate in appropriate areas the necessary resources).

Another important principle, which can be based financial planning at the enterprise — forecasting. It can be implemented in various aspects. It can be a prediction of internal production processes, external factors — both market and administrative. The key technique here — analysis of the processes relevant to the respective fields.

Risk Analysis — an example of another important principle in the process of solving the problems, forming a plan of Finance. The fact is that almost any business is implemented in environments characterized by these or other potential threats. This can be, for example, currency fluctuations unstable policy or state regulators. External risks are also important — this is especially evident in the sanctions of Western countries against Russian companies.

Coordination and control-the examples of other major principles of financial planning. What can you say about them? Coordination — the term is quite complex. It can be understood, on the one hand as a Union of the various activities of the enterprise into a single concept, on the other — application common to all areas of the production management, the introduction of universal principles of maintaining corporate culture, dissemination of knowledge, contributing to the understanding of the key priorities of the company. Control — the procedures ensuring that employees algorithms, which are incorporated in the respective plans.

Planning

Learn what are the methods of financial planning. There are many approaches to their classification. Among the Russian businessmen have received quite a widespread one that is based on the division of activities in terms of their direction: upwards (from subordinate units to the management), top to bottom, and through the implementation of counter-initiatives of employees and management. Examine these methods of financial planning in more detail.

Regarding the planning of the scheme “bottom-up”, the plans form a competent subordinate structures, on the basis of the results of their detailed analysis of production processes.

Forecasting and planning of Finance

The Advantage of this method is that the structure of the corresponding algorithms for business development will be very detailed, including subtle nuances, many of which can then be key from the point of view of solving the problems of production.

The Second method assumes that a firm's management creates a shared, conceptual tasks, and passes them to subordinate organizations to the further elaboration and structuring of the appropriate type in terms of financial development. The advantage of this method is that the planning will initially consider the key strategic factors, such as the state of Affairs of the company in the market (in the first scenario, the local units can be quite General or even incorrect view of it), the specificity of the interaction with creditors and investors (similarly, employees of subordinate structures may know nothing about the relevant details).

The Third scheme is characterized by the simultaneous involvement of the key principles of their first two. Thus, it defines key benefits of both — strategic planning of Finance taking into account factors known only to the user, as well as detailing the business processes.

financial Planning market economy

That can interfere with the company to always work in the third scheme, since it is so successful? This may be due, for example, with the rigor of commercial confidentiality at the company. So, the management company is not always able to bring to the attention of subordinate employees, data relating to the credit exposure of the company or of information reflecting the company's interaction with investors. In this case, likely to trigger a script “bottom-up” in its purest form.

Planning Tools

So we looked at the main methods through which may be financial planning. Market economy — a phenomenon involving the competitive relationship of players in a particular segment of the business. Pole position will most likely be those companies that will be able to use the most efficient tools in the aspect of the practical solution of problems pertaining to financialplanning. Learn what tools can businesses use to part of the direction of activities.

Analysis

Among the most common and important — and economic analysis. This tool allows companies to identify patterns that characterize the production processes, as well as the area of interaction of firm with external players — counterparties, creditors, and customers. Economic analysis allows you to identify what reserves has the firm and what they can do. It can be noted that the appropriate tool is considered by many researchers as an independent method of financial planning because of its complexity, the presence of a large number of additional components.

Planning of family finances

Normalization

Another common tool which can be planning in the system of corporate Finance — valuation. Its specificity is that competent professionals working in the firm, calculate some planned, expected performance, based on available data standards (e.g., release of goods or provision of services). The sources of the respective norms may be either formal (that is, they may include a particular source of law — for example, Federal law), and corporate.

Optimization

The Following most important planning tool — optimization. The fact that on the basis of economic analysis and regulation can be developed several concepts, scenarios involving the distribution of finances in the enterprise. Of them you must choose the one which reflects the state of Affairs of the company more objectively, and therefore can be considered optimal. The main criterion here — the company achieving minimum costs and maximum income in the case of certain approaches. The plan, which will determine the most complete line of company's activities according to priorities, will be selected as optimal.

These Are the basic tools by which may be financial planning. Finance — this is a resource that can be used by the organization in relation to different types of tasks. So, the prospects of the use of capital may depend on the specific varieties of plans, involved in the enterprise.

Types of planning

Learn what are the types of financial planning. There are many approaches to their classification. Among the Russian researchers extended the scheme for which planning and control of Finance is based on assigning relevant activities to prospective, current and operational. Consider their specifics in more detail.

Long-term planning involves the development of company key strategic priorities which must be implemented over a significant period of time, e.g. 3-5 years. In this aspect, the development of plans, as a rule, is carried out according to the scheme “top down”, that is, in the relevant algorithms include data reflecting not only the internal specifics of development of the company, but also the influence of the factors formed in the environment.

Current planning involves the development of criteria by which an enterprise should develop over longer periods of time than in the preparation of perspective plans — about 1 year. This mechanism often requires the incorporation of a mixed scheme of preparation of formation of the corresponding algorithms. That is, the leadership of the company, on the one hand, provides subordinate structures, some types of strategically significant information for the development of the company, on the other — receives from them detailing the stages of implementation of the plan.

financial Planning in the enterprise

Operational planning involves the solution of tasks facing the firm in a specific period of time, or that need to be addressed in the coming months. Most often the plans the scheme is “upwards”. Leadership usually does not make sense in this case to disclose to employees the strategic nuances of business development.

Plans not only business

Planning, as we noted at the beginning of the article — an important component of Finance not only in business. Relevant activities are also government agencies, and nonprofit organizations. Planning of family finances in Russia — is also in order. Gaining popularity of methods of improving personal well-being of citizens through the use of various useful techniques, and ready-made tools, for example, in the form of computer programs. Planning — the kind of activity, it is ukazyvayutsya with the daily life of the modern man.

Is it Possible to say that the mentioned methods and tools for preparing financial plans is equally compatible with any sphere of activity of citizens, whether creating a family or personal budget? Adjusted for the presence of the specific business processes associated with, for example, release of goods and accounting service financial operations in General, the key patterns of the commercial sector are applicable to regular activities. A person may, for example, to create a personal money management plan inaspect of the strategy period, solutions current and operational objectives. It may involve analysis, normalization, and optimization.

Of Course, in that case, if the relevant activity is engaged citizen, do not have adequate level of qualification, activity data will be extremely simplified. But they are quite will meet the specifics of the considered above us the nuances of financial planning. Personal budget, thus, may have distinct features of similarity with the appropriate plan of involvement of capital in the company, albeit in a simplified form.


Article in other languages:

HI: https://tostpost.com/hi/business/24370-forecasting-and-planning-of-finance-methods-of-financial-planning-fina.html

PL: https://tostpost.com/pl/biznes/42092-prognozowanie-i-planowanie-finans-w-metody-planowania-finans-w-planowa.html

PT: https://tostpost.com/pt/neg-cios/41655-a-previs-o-e-o-planejamento-das-finan-as-m-todos-de-planejamento-de-fi.html

ZH: https://tostpost.com/zh/business/49096-forecasting-and-planning-of-finance-methods-of-financial-planning-fina.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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