Business Financial Planning

Finance in relation to business is concerned withselecting the best one from the available options.
the task of providing funds needed by theThe planning requires a long-term estimate of
enterprise in terms that are most favorable in theprofits which in turn involves a projection of sales
light of its objectives. The finance function of aand costs of operation for a period of years.
business is concerned with procurement of fundsAccordingly, long range financial planning becomes
and its effective utilization in business. It coversessential for a company that wishes to grow. The
financial planning, forecasting of cash receipts andcompany has to establish objectives and goals as
disbursements, realizing of funds, using andpart of a master plan for long range survival and
allocation of funds and financial control. Financialgrowth. Coordinated thinking forms the basis of
planning helps in defining financial goals, settingfinancial planning for making an optimum utilization
objectives and developing a plan to achieve them.of funds, particularly of cash balances.
Planning is not master-minding the future, and anyUnneeded cash can be invested in
attempt to do so is foolishness. Human beings canincome-producing securities. Financial planning is
neither predict nor control the future. For thisused as a control device to fix standards of
reason, management has to clarify theirperformance and evaluation of the results. It is
objectives and determine what actions must beused to pre-test the financial feasibility of various
taken, when, by whom, and at what cost toprograms and in that sense it is of crucial
achieve the cherished goals. Financial planning is theimportance because action once taken becomes
process of evaluating different investing anddifficult to retract.
financing opportunities available to a firm and