Financial plan helps businesses to focus on money and time management to achieve previously set goals. At the same time, this plan also helps businesses minimize financial difficulties in the future. In the article below, Johnson's Blog You will learn about and how to make effective financial planning in businesses.
How to properly understand financial planning
About the concept of financial planning of the business
This concept is simply understood as determining the financial ability of the business to achieve the goal. From there, effective investment, consumption and saving strategies are formed, helping the enterprise's goals to be implemented in accordance with the plan.
About the benefits when businesses have an effective financial plan
- Businesses will rely on plan to determine its financial goals in the future, from which the business will come up with an appropriate solution.
- When investors look at an effective plan that the business has created, they will have confidence, improve the ability to invest more cooperatively in the business, because when it is effective, transparency and clarity will be achieved. circuit, obviously.
- An effective plan will assess the leadership capacity of the company's management.
>>> See more: Managerial accounting what? Objectives of management accounting in business
What facilities does financial planning require?
Report on the business activities of the enterprise
Income statement will show the revenue or expenses on profit and loss of the business. From there, leaders can calculate profit margins and find a way to increase revenue for the business in the near future.
Balance Sheet represent the existing assets and the source of capital forming those assets of the enterprise. On the balance sheet, the Short-term assets, long-term assets, loans Current Liabilities, medium-term debt and long-term debt are clearly shown, showing the efficiency of capital.
From here, the management board relies on this table to come up with plans to increase/decrease capital in the most reasonable way.
>>> See more: What is strategy?? Business strategy planning tips
Cash Flow Statement
Cash Flow Statement shows the change in cash flow during the business cycle so that management can financial planning for the upcoming time most accurately. Sometimes, it is unlikely that the cash outflow is more than the inflow, which is a bad sign, but it is considered a stepping stone to achieve the set goal.
Effective financial planning for businesses
To make a financial plan to achieve high efficiency, businesses need to take a few steps:
Step 1: Research the financials of the business
The financial research of the business helps the business not to miss any financial related information. From there, businesses can build a most complete report.
Step 2: Determine your financial needs
After the financial research process, the enterprise clearly knows the main problem at the company. Therefore, identifying financial needs will help them have a clear direction of development.
To do this, you need to understand your investment goals, determine the amount, time, type of stocks you intend to invest in, etc.
>>> See more: Business strategy consulting The key to business success
Step 3: Enterprises collect data
Documents to be collected include liability, property, retirement fund or insurance policy, etc. Businesses can rely on a financial expert to make this step go smoothly.
Step 4: Develop a plan for your business
Enterprises present advantages and disadvantages, information on tax laws, financial systems and issues of occupational health and safety, ..
Step 5: Enterprises present the plan
In order for the presentation process to go smoothly, the presenter needs to study in many related documents, research and present what he has gathered in the best way.
>>> See more: Business strategy model what? How to design a business model?
Step 6: Enterprises implement the plan
Here, businesses need to pay attention to issues such as taxes, insurance, retirement issues, .. as well as invitations to cooperate if the financial plan is professional, effective, ...
Step 7: Enterprises monitor the implementation of the plan
This is the final step of the planning process. Therefore, to ensure success, businesses need to monitor and supervise throughout the process. At the same time, they need to monitor more documents on investment item evaluation, market situation reports, insurance updates, etc. It is this monitoring that helps businesses limit risks that may arise.
>>> See more: Scientific and effective payroll management
Johnson's Blog Hope you readers have understood a part about financial planning and how to do financial planning to be effective in the business.
Johnson Vu – Deputy General Director of Viindoo Technology Joint Stock Company
- Headquarters: 6th floor, Taiyo Building, 97 Bach Dang, Ha Ly, Hong Bang, Hai Phong, Vietnam.
- The Hanoi branch: 8th floor, CIC Building, 219 Trung Kinh, Cau Giay, Hanoi, Vietnam.
- Phone: + 84.225.730.9838
- Website: https://johnsonvu.com