This document discusses fiscal planning and budgeting. It defines key terms like financial, fiscal, and monetary. It explains the objectives and importance of fiscal planning, which includes determining capital requirements and structure, framing financial policies, and adequately utilizing resources. The steps in fiscal planning and factors affecting it are outlined. Budgeting is also defined and the steps in the budgetary process are provided, including budget preparation, review, and monitoring.

1. FISCAL
PLANNING
PRESENTED BY :
VRUTI PATEL,
FINAL YEAR M.Sc.,
SNC.

2. FINANCIAL, FISCAL AND
MONETARY
• Financial : relating to finance, which is the
commercial activity of providing funds and capital,
or to put it the other way, the ways in which
individuals and organizations raise money.
• Fiscal : relating to financial matters, especially
government tax revenues and government
expenditure and debt.
• Monetary : relating to the money supply: the
amount of money in circulation, its rate of growth
and interest rates.

3. FINANCIAL
MANAGEMENT/ADMNISTRATIO
N
Financial Management means planning,
organizing, directing and controlling the financial
activities such as procurement and utilization of
funds of the enterprise. It means applying general
management principles to financial resources of
the enterprise.

4. Financial administration consists of all
those operations, the object of which is to
make funds/money available for the
organizational activities and to ensure the
lawful and efficient use of these funds in
order to achieve the organizational goals
and objectives.

5. DEFINITION
Financial management is chiefly
concerned with maximizing the wealth of
owners through wise and rational investment
of funds. It involves the application of general
management principles to a particular
financial operation.
- Harward and Upton

6. Financial management is concerned with
raising the financial resources and their
utilization towards achieving the organizational
goals.
- SN Maheshwary
It is the process of putting the available funds
to the best advantage from the long term point
of view of business objectives.
- Richard A Brealey

9. OBJECTIVES OF FISCAL
PLANNING
To determine capital requirements
 depend upon factors like cost of current and fixed
assets, promotional expenses and long range
planning.
 looked with both aspects: short-term and long-term
requirements.
To determine capital structure
 composition of capital, i.e. the relative kind and
proportion of capital required in the business. This
includes decisions of debt-equity ratio both short-
term and long-term..

10. To frame financial policies
• In fiscal planning the policies are framed with
regards to cash control, lending, borrowings, etc.
To utilize financial resources adequately
• This is to ensure that the scarce financial
resources are maximally utilized in the best
possible manner at least cost in order to get
maximum returns on investment.

11. IMPORTANCE OF FISCAL
PLANNING
 Ensures provision of adequate funds to meet day to
day requirements of the organization as well as its
future expansion.
 Ensures timely availability of funds.
 Provides policies, procedures and plans.
 Helps in ensuring a reasonable balance between
outflow and inflow of funds so that stability is
maintained.
 Ensures that the suppliers of funds are easily
investing in organization which exercise financial
planning

12.  Helps in making growth and expansion
programmes.
 Reduces uncertainties with regards to changing
trends which can be faced easily through enough
funds.
 Helps in ensuring stability and profitability in
concern.
 Provides sound financial control and thus seeks to
eliminate waste of funds.
 Guides for proper and fuller utilization of available
resources.

13. STEPS IN FISCAL PLANNING

14. FACTORS AFFECTING
FINANCIAL PLANNING
• Objectives:
Should be made in light of organizational
objectives
• Requirements of organization:
The financial plan should be based on the
present and future requirements of the
organization.
•

15. • Economy:
The capital structure should be such that there
should be a balance between the cost of the funds
and services to be determined.
• Flexibility:
Financial planning should be such that it ensures
flexibility to utilize the funds into more profitable
manner.

16. BUDGET

17. DEFINITIONS
A budget is a tool for planning, quantifying the plans
and controlling costs.
- Flinker, 1984
A budget is a plan that uses numerical data to
predict the activities of an organization over a
period of time and it provides a mechanism for
planning each unit’s needs and contributions.
- carruth, carruth & Noto, 2000

18. STEPS IN BUDGETARY
PROCESS
BUDGET
MONITORING

19. BUDGET ESTIMATE
• Financial planning responsibilities need to be
identified before budget preparation begins.
• The governing board, administrator, budget
director, steering committee, and department
heads are often involved in the budgetary
process.
 The governing body is responsible for the
general planning function. It selects the budget
steering committee, determines the budgetary
objectives, and reviews and approves the
master budget.

20.  The administrator is responsible for the formulation
and execution of the budget, by correlating the
governing board’s goals with the guidelines for
budget preparation and supervising the budget
preparation.
 The budget director is responsible for the budgeting
procedures and reporting. He or she establishes a
completion timetable, has forms prepared, and
supervises data collection and budget preparation.
The budget director serves as the chairperson of the
steering committee, which approves the budget
before it is submitted to the governing board.

21.  Department heads prepare and review goals
and objectives and prepare the budgets for their
departments. Departmental budgets need to be
prepared and coordinated. During this phase,
units of service, staffing patterns, salary and
non-salary expenses and revenues are
forecasted so that preliminary rate setting can
be done.