STRATEGIC FINANCIAL MANAGEMENT PLAN
The financial section of a business plan forms a large part of the plan for any business or organisation. This section of the business plan includes the following financial statements:
- Income Statement (i.e. revenues, expenses and profitability);
- Cash Flow Statement; and
- The Balance Sheet (i.e. assets and liabilities)
For new start-up businesses or organisations, these financial statements will be projections, whereas for an existing business or organisation this section of the plan will contain several years of history as well as projections.
In addition to including the financial statements in the business plan, the plan should also include the financial strategies that a business or organisation will take, when handling their finances.
What is a Strategic Financial Management Plan?
A strategic financial management plan, involves business owners and/or management performing a defined sequence of steps that will encompass the full range of their business’s or organisation’s finances. This will be from:
- Setting out clearly defined and attainable objectives;
- Identifying available resources;
- Analysing data;
- Making financial decisions;
- Tracking variances between “actual” and “budget” results; and
- Identifying the reasons for variances.
Measuring and Analysing Financial Performance
At the time of measuring and analysing the financial performance of your business or organisation, Singh Accountants will provide you with the required assistance. This assistance will involve:
- Analysing the strengths, weaknesses, opportunities and threats to your business or organisation;
- Evaluating the environment in which your business or organisation operates;
- Setting your goals and objectives, and developing your KPIs;
- Developing short-term and long-term strategies to help your business or organisation achieve its goals and objectives;
- Improving the value of your business or organisation; and
- Making informed decisions.
Setting Profitability Ratios
For any business or organisation to operate effectively, profitability ratios must be set. The profitability ratios will highlight any ineffective areas within your business or organisation that will require you and/or your management team to take the required corrective actions.