Financial planning refers to the process of framing financial policies, estimating the required capital, and determining competition.It has something to do with investment management, administration of funds, and resources procurement of an enterprise. In this post, you’ll learn the important benefits of financial planning in your business. In fact, planning without forecasting is an impossibility.
Forecasting of sales and expenses helps in estimating future financial needs.
The plans for expansion, diversification or improvement also necessitate the forecasting of requirements of funds.
But a financial manager can help you maximize your resources for maximum return on investment.
You’ll be helped to ensure adequate and effective financial policies, programs, and procedures for strict compliance.
Also, financial planning helps determine your capital structure, which is the composition of your capital.
Here are the five types of capitals that financial planning can help you: Financial planning helps in framing financial policies concerning lending, borrowings, cash control, and other areas of your finances.
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This article throws light upon the top eight advantages of business forecasting. Henry Fayol has rightly observed that the entire plan of an enterprise is made up of a series of plans called forecasts. In the absence of correct estimates of financial requirements, the business may suffer either from inadequate or from excess capital.
Your capital requirements depend on many factors, such as promotional expenses and the cost of fixed and current assets.
Financial planning can help you look into the short-term and long-term capital requirements of your business.