Financial planning: the order of organization and activities of the enterprise

Financial planning is a managerial process of creating, distributing and using the monetary resources of a business entity. This process is a structural element of the entire planning process created by enterprise managers.

In the conditions of modern management, when the principles of the independence of organizations and responsibility for the results of one's own activities should be fully realized , financial planning becomes particularly relevant. Without it, it is impossible to achieve significant success in the market, expand production and economic activities and sociological development of the team.

Financial planning is in close relationship with the planning of the company's production activities. After all, the main indicators are based on the volume of production, cost and product range. This process contributes to the definition of internal reserves in the enterprise and compliance with the economical regime. Obtaining the planned amount of profit is possible provided that the predicted labor costs and material costs are met . Clear planning avoids overstocking of material resources, the need for unplanned cash investments and non-productive expenses. Also, thanks to planning, favorable conditions are created for effective use of production capacities and, accordingly, improving the quality of products.

So, financial planning is represented by the process of forming a system of measures aimed at ensuring the development of the organization with some monetary resources. This process is responsible for the effectiveness of activities in subsequent periods.

Based on studies in this economic field, specialists have identified such types of financial planning: forecasting, current and operational planning. All three species are compulsorily found in the activities of the organization.

Financial planning is carried out in a clearly defined sequence. So, the initial stage is prediction, which determines the tasks of the current planning of the company's activities, which, in turn, creates the basis for an in-depth and detailed operational forecasting of its activities.

The level of detail of the indicators of each type of financial plan should be determined by the organization independently, taking into account the specifics of its functioning.

Long-term and short-term planning are also distinguished. The long-term takes into account the adoption of decisions related to the acquisition of fixed capital, the definition of the range of products produced by the enterprise, and personnel policy.

However, a widespread option in any enterprise is financial planning for a short period, usually extending to one year. The annual budget, in turn, is divided into quarterly and monthly plans.