Power of Financial Planning

1. Power of Financial Planning

3. Many entrepreneurs, especially those who do not have problems with sales and business income, do not properly plan their funds. Family means - even more so. Working conscientiously and for the good of the company, these worthy people, as we now understand, from the point of view of financial discipline, were notorious scumbags. They did not set themselves high salaries and bonuses, being content with a moderate (for their level) salary - which is so terrible, it would seem. The terrible thing is that, by necessity, they climbed into the circulation, extracting really substantial sums from there. Now, even after a long time has passed, the idea of these moments terrifies me. How can you plan the activities of a company if the treasury can be raided at any moment that cannot be resisted? An accountant and would be glad to save money, but how can you resist. Anyway.

5. The essence of financial planning If everything is more or less clear with planning: we plan our actions based on the available funds. The rest should be mentioned separately. Financial planning is a decomposition of the amount on the account (accounts) of the company by funds. • Classic fund scheme:• Company maintenance (salary, rent, communications),• Supply (raw materials for production and goods for trade),• Promotion,• Reserve,• Owner,• Taxes.  

7. The proceeds received in the financial planning account are allocated to these funds at the established interest rate. It makes no sense to strictly regulate the interest rate. However, there are several guidelines. The actual choice of percentage is dictated by the company’s movement strategy and the environment. • The supply cannot be less than the cost of the product in terms of raw materials and materials. Better with an excess (including marriage), by 3% -5%.• It is not recommended to spend less than 8% of the proceeds on Promotion.• It is not recommended to spend less than 3% of the proceeds to the reserve. Especially when the formation of this fund is just beginning. The enterprise should always have money to re-close urgently, should something happen.• It is recommended to send 10% of the company’s Income to the Owner. Pay attention - from Income. Until the company has received the Income, no transfers are made to the Owner.• It is recommended to send for the maintenance of the company exactly as much (from income or proceeds) as the maintenance of the company costs, no more. If sales are higher than expected, “fat” will start to accumulate in this fund.

9. How much to send for taxes, everyone decides for himself according to the situation. When the Owner, having gained patience, busting all his desires to send everything to the forest and leave the work with finances by selling financial instruments, as it was, begins to conduct a financial plan, a fantastic thing will happen. Money will cease to be spent on small things. Why? Because according to financial planning and by selling financial instruments, money is spent only on one day per week. Excluding procurement costs.

11. That is, having accumulated accounts in a week, distributing what has been received among the funds, the person who manages the finances by selling financial instruments acquires the scope of spending. He has a bunch of bills to pay. Here are the funds. Since the funds contain money for clearly defined items of expenditure, the one who manages the finances understands how much he can spend on each item. And he doesn’t spend more. The total amount of money in the account can be more than enough for all accounts to be paid. But, if you distribute by funds, the funds may not be enough. If last week there was a big expense for some fund, for example. In this case, those invoices are selected, the payment of which is most important. The rest are postponed for the next week or agree on preferential payment terms.