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Financial Management Planning PDF Print E-mail
Written by Orapan Boonsukij, Thailand   
Saturday, 01 October 2011 19:58

 

 

Financial Management Planning

 

Sound financial management planning is the cornerstone of every successful business venture. Having a path to follow in the life of your business is half the battle in attaining your goals. Decide what you want to achieve financially in your business, use the financial tools to plot your path, and you will be well on your way to getting there.

The first step is to establish a realistic budget by projecting your operating costs. The operating budget will reflect your priorities in terms of how you spend your money, the expenses you will incur and how you will meet those expenses. Your operating budget normally would include the following expenses in addition to any specialized expenses related to your particular business:

·         personnel

·         insurance

·         rent

·         depreciation

·         loan payments

·         advertising/promotions

·         legal/accounting

·         miscellaneous expenses

·         supplies

·         payroll expenses

·         salaries/wages

·         utilities

·         dues/subscriptions/fees

·         taxes

·         repairs/maintenance

Your financial plan should also include any loans you may need to apply for and/or plan to repay, a capital equipment and supply list, balance sheetbreakeven analysisincome statement (profit and loss statement) and cash flow projection. The income statement and cash flow projections should include a three-year summary, detail by month for the first year, detail by quarter for the second and third years, and a brief analysis of these statements.

Unless you are thoroughly familiar with financial statements, get help in preparing your financial statements. The idea is to have the right information available and to understand the financial tools well enough to be able to monitor and plan the financial future of your business. It is important for every business to stay financially viable. To do this, policies need to be identified and implemented based on accurate financial statements.

 

Last Updated on Thursday, 03 November 2011 17:12
 
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