The 4 keys to financial planning: objectives, deadlines, budget and control of decisions

by TM Maria Be a king in your own kingdom

The financial planning is the process of development of an organized, detailed and personalized comprehensive financial plan that guarantees achieving certain financial targets previously, as well as deadlines, costs and resources needed to make it possible.

In other words, financial planning defines the direction an organization must follow to achieve its strategic objectives through a harmonic action of all its members and functions. Its implementation is important both internally and for third parties who need to make decisions related to the company (such as the granting of credits, and the issuance or subscription of shares).

It is necessary to clarify that financial planning can not only refer to certain financial projections that the financial statements of results and balances of a given indicator show, but also includes a series of activities that are developed at different levels: strategic level, functional level and operational level of a company.

This concept was born in the United States in the early 70s, in response to the need to take into account all aspects that may influence the finances of a subject, be it a person or company.

The financial planning process comprises four stages:

1.      The establishment of the objectives pursued and their priority.

2.      The definition of deadlines to achieve these objectives.

3.      The elaboration of the financial budget, that is, the identification of the different items necessary to achieve satisfactory results: investment in fixed income, variable, selection of funds, pension plans, etcetera.

4.      The measurement and control of financial decisions taken to avoid deviating from the route that leads to the objective or objectives.

The planners and financial advisers themselves are in charge of preparing this plan, adjusted to the interests of the subject in question. Here you can get the best quote from financial planner Anaheim CA.


The output of the financial model consists of financial statements, such as income statements, balance sheets and statements that indicate the origins and applications of the treasury. These states are called pro forma, which means that they are forecasts based on the inputs and hypotheses on which the plan rests. In general, exits from financial models also include many of the financial ratios. These ratios indicate whether, at the end of the planning period, the company was in conditions of financial soundness and health.

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About TM Maria Senior   Be a king in your own kingdom

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Joined APSense since, May 29th, 2017, From Atlanta, United States.

Created on Apr 27th 2019 11:53. Viewed 271 times.


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