In a market economy a significant role in the successful financial activity of the company belongs to the financial planning.
Financial planning is a necessary element of the economic management. If finances themselves embrace all the aspects of the company activity, the financial planning express these aspects through the relevant financial indicators used in the management of the economy. Without the financial planning it is impossible to reach that level of economic management which provides the company with the increase of its efficiency, success in the marketplace, expanding of the material base, the successful resolution of social issues and material incentives for the employees.
The financial planning is closely connected with the planning of production activity of the company. Performance of all the routine financial instruments is based on the plans of production, range of goods and services, production costs, they must create the necessary financial conditions for the successful implementation of these plans. This is the main purpose of the financial planning. Financial planning helps to identify the internal resources of the enterprise.
It is impossible to achieve that level of control of the industrial and economic activities of the company, which provides it with the success in the market, continuous improvement of material base, social development of the team without the financial planning. None of the other types of planning can have for an enterprise such a synthesis, global significance, because finances include all the parties and all the parts of its operation.
The main tool of the financial planning in modern conditions is the financial plan of the enterprise, particularly in the form of a balance of incomes and expenditures, a significant spread in the practice also have the financial planning tools, such as billing calendar, a business plan.
The task of the short-term financial planning is to provide funding for the company and the effective use of temporary free funds.
To ensure the continuous development of the enterprise it is necessary to own the capital, i.e. the money invested in buildings, cars and equipment, in purchasing and storage of inventory, accounts receivable and other assets. As usual, these assets are not acquired immediately, and are created in over a period of time. We call the total cost of the company needed to financing the additional assets, the company’s needs in the capital
In the most of the companies, the accumulated capital requirements does not increase uniformly, but rather wavy. The need for capital has clearly expressed positive dependence on the growth of the company’s operations. However, there are some seasonal variations. Finally, there will occur unpredictable monthly or weekly fluctuations.
The accumulated need of the capital can be met through the short-term and the long-term sources of funding. As long-term funding does not cover all capital requirements, the company need to resort to the short-term financing for the mobilization of the shortfall.
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