In order and consonance with the realization of those objectives that have been proposed, organizations and companies draw up plans in which they detail the actions that must be carried out to achieve those objectives. This important process within a company is designated by the name of planning or planning..
Meanwhile and within this general process we find a part of it that is designated with the concept of financial planning and that will allow us to make a projection of the results that the company wants to achieve, since it deals with study the relationship between sales projections, income, assets, investments and financing, based on alternative production and marketing strategies, and then decide what will be the best way to satisfy financial requirements.
The work of financial planning takes into account all aspects and that is why it also studies the relationships between different variables such as sales, assets, financing, income, investments. Because precisely from this global analysis you will be able to develop the best planning option, even taking into account possible outcome scenarios. The financial situation that the company has at that moment and future prospects also come into consideration. And most importantly, you should always have an alternative to the possible failure of the plan, that is, a viable alternative that allows recovery or does not make the fall hard.
Obviously there are infinite methods and ways to face this procedure and the ideal will be the one that responds to all the aforementioned questions, that is, that is adjusted to the reality of the company.
Minimizing risks, taking advantage of the commercial opportunities that arise, and the economic resources that are available, are the objectives of the financial planning process.
Not only the general operation of the company will be positively affected by the financial planning that is executed, but also that this procedure will be key when it comes to keeping the company in question alive and in action.
Specialists in the field consider that there are three pillars of this process that concerns us: in principle, the provision of cash and liquidity is vital, because beyond the profits that the company can demonstrate, without the corresponding support of cash it will predispose it failure.
The second element consists of the planning of the profits that will allow to know the probable income.
Both elements, cash and profits, will provide essential information that investors usually want to know.
Each company has a base of its business that will characterize it, while financial planning, with its sharpness and analysis, will take care of providing a structure to that base that will lead to successful results. The objective of this will always be to obtain profitability.
Through analytical accounting and the design of the financial statements, the financial planning in question will take care of providing a structure according to the type of business in question and then, the managers of the same will be able to quantify the proposals prepared by the area marketing and evaluate your costs.
Something like defining the direction of the company is what financial planning will have to do in this way to achieve the proposed objectives and always through a harmonious action between the human resources that compose it and its functions.
Its observation is decisive and important both externally and internally, as regards the granting of credits or the issuance or subscription of shares, among other issues.
Basically financial planning will seek to maintain economic balance at all levels of the company, whether in the operational part as well as in the strategic part.
The operation is made up of marketing and finance and then, marketing will be in charge of formulating the strategic alternatives for the business in question, while finance, for its part, will quantify the strategies proposed by marketing.
For its part, the operational area, made up of sectors such as production, administration, logistics and commercial office, will also be prepared to specify all those policies corresponding to the strategic plan.
However, financial planning not only acts to improve returns, but also makes use of it when it is necessary to solve specific problems of the company.
