Financial Planning - Definition, Objectives and ImportanceEffective management of business technology requires proactive and analytical financial steering to justify operational performance, investment feasibility and allocation of costs. Management, along with decision making, is dependent on transparency with clear structures and processes surrounding financial management. Financial transparency shows how accumulated costs are transferred to service consuming fees and how actuals correlate to plans. Financial planning ensures:. Cost transparency is not easy to achieve.
Financial Planning and Control
There are various decision making situations where financial planning and control are needed to support decision making by performing professional financial analysis? Financial Planning helps in making growth and expansion programmes which helps in long-run survival of the company. Organization and Competence Development. Description Editor s Bio Reviews!Financial Planning is process of framing objectives, polici. Strategy and Operating Model. The importance can be outlined as. The best practices to tackle cost transparency are using a standardised taxonomy and grouping costs to pre-defined cost groups and services.
Service Integration and Quality. Business Benefits Realization. This ensures effective and adequate financial and investment policies. Previous article!
Financial transparency and planning
It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise. Determining capital requirements- This will depend upon factors like cost of current and fixed assets, promotional expenses and long- range planning. Capital requirements have to be looked with both aspects: short- term and long- term requirements. Determining capital structure- The capital structure is the composition of capital, i. This includes decisions of debt- equity ratio- both short-term and long- term. A finance manager ensures that the scarce financial resources are maximally utilized in the best possible manner at least cost in order to get maximum returns on investment.
Figure 3. Business Process Development. Project and Development Management. Financial management should not be seen only as a function operated by finance. Effective IT management requires proactive and analytical financial steering methods to ensure successful IT- service operations.
Business Relationship Management. Governance, Objectives and Communication. Ecosystem Management. Concept Development. Project Portfolio Management.