1. FINANCIAL PLANNING
^ FINANCIAL PLANNING IS AN IMPORTANT PART OF THE
OVERALL PLANNING OF A BUSINESS.
^ FINANCIAL PLANNING REFERS TO THE PROCESS OF
DETERMINING THE OBJECTIVES, POLICIES, PROCEDURES,
PROGRAMMES AND BUDGETS TO DEAL WITH THE FINANCIAL
ACTIVITIES ( PROCUREMENT, UTILISATION AND
ADMINISTRATION OF FUNDS) OF AN ENTERPRISE.
^ FINANCIAL POLICES AND PROCEDURES ARE THE BROAD
GUIDELINES FOR THE PROCUREMENT, ADMINISTRATION AND
DISBURSEMENT OF FUNDS.
^ FINANCIAL PLANNING IS AN IMPORTANT FUNCTION OF A
FINANCE MANAGER.
2. STEPS IN FINANCIAL PLANNING
DETERMINATION OF FINANCIAL OBJECTIVES.
FORMULATION OF FINANCIAL POLICIES.
FORECASTING FIRM’S REVENUE, EXPENSES AND NEED FOR
FUNDS.
PROCEDURE AND PROGRAMMES.
REVIEWING FINANCIAL PLAN.
3. DETERMINATION OF FINANCIAL
OBJECTIVES
THE FIRST STEP IN THE FINANCIAL PLANNING IS TO
DETERMINE THE FINANCIAL OBJECTIVES OF THE
ORGANIZATION – LONG TERM AND SHORT TERM.
4. FORMULATION OF FINANCIAL
POLICIES
FINANCIAL POLICIES ARE FORMULATED AT THIS
STAGE.
THESE PERTAIN TO QUANTUM OF FUNDS, CAPITAL
STRUCTURE, CAPITALIZATION, CHOICE OF SOURCE
OF FUNDS, ALLOCATION OF FUNDS, CREDIT AND
COLLECTION ACTIVITIES, ALLOCATION OF INCOME
ETC.
5. FORECASTING FIRM’S REVENUE, EXPENSES AND NEED FOR FUNDS
BASED ON PAST FINANCIAL DATA ONE SHOULD FORECAST
FIRM’S REVENUE, EXPENSES, NEED FOR FUNDS ETC.
6. PROCEDURES AND PROGRAMMES
BY DEVELOPING PROCEDURES AND PROGRAMMES,
FINANCE MANAGER AIMS AT ATTAINMENT OF
OBJECTIVES BY UTILISATION OF SCARCE FINANCE.
7. REVIEWING FINANCIAL PLAN
FINANCIAL PLAN SHOULD BE REVIEWED AND
UPDATED ACCORDING TO CHANGED CONDITIONS.
