Principles of financial planning

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Principles of financial planning are based on analysis of financial data company and goals to be achieved by specific budgets.

Basic rules

The main principles of financial planning are:

  • Maximization of enterprise value
  • Maintaining financial stability, the financial condition, which would guarantee confidence and total control over the finances.
  • Improving financial performance, which depends on the systematic monitoring of performance in the short term, taking into account overall guidelines and main goal.
  • Preserving liquidity, which require fulfilling company's current financial obligations. It requires long term control over cash flow.
  • Creating appropriate financial strategy tailored to the internal needs of the enterprise. This strategy determines the direction of a company in the field of finance, which would help in achieving its objectives,
  • Controlling of company's finances based on proper control measures which should be planned and implemented.
  • Optimization of costs by finding a level of costs that would avoid problems in the area of ​​finance. It involves looking for new solutions in the field cost grouping and calculating but it is not limited only to reduce costs,
  • The optimal organizational structure that provides the fastest and most accurate flow of financial information.
  • Appropriate investment policy which should be prepared in accordance to company's financial capabilities.

Elements of the financial plan

Examples of cash flow planning:

  • Planning of global enterprise revenues, and predicting their growth,
  • Cost planning, by using proper methods of measurement of various inputs (labor, machine, energy, supply, etc.).
  • Planning of due taxes and methods of obtaining tax benefits,
  • Budgeting (planning of revenues)

See also:

References