What is financial planning and should you do it as a business? Is this something that you should outsource or keep in-house? How much does it cost and what benefits can you expect?
In this business article, we’ll explore what financial planning is and why it can be beneficial for your organisation. We’ll also touch on some of the key considerations you should make when deciding whether to outsource or keep your financial planning in-house.
What is financial planning?
Financial planning is the process of creating a roadmap for your business’s financial future. It involves setting financial goals and then figuring out the best way to achieve them.
Should business organisational do financial planning?
Is financial planning something that’s left to individuals who are interested in growing their personal finance? Should business entities also engage in financial planning?
The answer is a resounding yes! Just like individuals, businesses need to have a plan for their finances. Without a plan, businesses can find themselves flying by the seat of their pants, making decisions based on what’s happening at the moment instead of what’s best for their long-term success.
The benefits of financial planning for business organisations
So, why should businesses bother with financial planning? Here are a few of the benefits:
1. Financial planning can help businesses stay afloat during tough times
Financial planning is a way for organisations to make plans for their money, which can help businesses stay afloat during tough times.
2. It can help businesses make better use of their resources
Organisations that engage in financial planning are better able to make use of their resources. This is because they have a clear idea of their financial goals and can allocate their resources accordingly.
3. Financial planning can give businesses a competitive edge
Businesses that engage in financial planning often have a competitive edge over those that don’t. This is because they’re able to make more informed decisions about their finances, which can give them a leg up on the competition.
4. It can help businesses attract and retain top talent
Organisations that have a financial plan are often able to attract and retain top talent. This is because employees are attracted to organisations that have their finances in order and are able to offer stability.
5. Financial planning can help businesses plan for growth
By taking charge of their finances, businesses are able to plan for growth. This means that they can make the necessary investments and put themselves in a position to take advantage of opportunities as they arise.
6. It can help businesses manage risk
Risk management is an important part of financial planning. By identifying and assessing risks, businesses are able to put together a plan to mitigate them.
7. It can help businesses make informed decisions
When your financials are in order, you’re able to make informed decisions about your business. Whether it is choosing to invest in new equipment or hiring new staff, you’ll be able to make decisions that are based on your financial situation.
8. Financial planning can improve cash flow
Proper financial planning can improve your business’s cash flow. This is because you’ll have a better understanding of your income and expenses, which can help you manage your money more effectively.
How to get started on financial planning for your business
A major step in financial planning is implementing a financial management system (FMS).
Why? Financial management systems help businesses keep track of their finances, give them insights into their spending patterns, and help them make better financial decisions.
For example, SunSystems offers a financial management system that can help businesses with their budgeting, forecasting, and reporting. This system can also help businesses with their compliance needs as well as give them access to real-time data.