Efficiency of financial planning at the enterprise
Journal Title: Економіка. Фінанси. Право - Year 2018, Vol 11, Issue
Abstract
Introduction. Financial planning is one of the major components of an enterprise planning system that solves such key issues as effective managing of financial flows, ensuring balance of financial resources and enterprise requirements, managerial decisions optimization, cost minimization and so on. However, the essence of financial planning and financial planning mechanism require further development. Purpose. The present article aims at defining the essence of financial planning, its significance, role and principles of organization in unstable economic environment and an increased risk of managing an enterprise. Results. Financial planning is a forecasting of the future; it is the form of constructing an active model and targeted financial condition of an enterprise in the future by establishing ways, techniques and time limits to achieve this condition, final planned actions included. Financial plans are almost always focused on clearly defined goals; they comprise intermediate results and reflect categories and amount of financial resources used for achieving planned goals. Financial planning can be defined as a component (element) of the overall planning process as well as the basis and the most responsible component of a functional system of management. It plays a key role in management as financial indicators make it possible not only to identify performance of indexes of the current year compared to the previous one but also problems in enterprise activity. Financial planning is mainly treated from two perspectives: as a process and as an activity. As financial planning is a way of implementing basic functions of enterprises’ finances – distribution, control and regulation – one can make a conclusion that it is not only the key element of financial management but also a way of its implementation. Conclusion. Financial planning is a major component of intra-enterprise planning, implementation of which is obligatory for an enterprise to meet its strategic goals of activity. It coordinates individual financial goals, matches them with other goals, and provides effective mechanism for managing financial system. The important issue of financial planning is providing soundness of the financial plan and its reality.
Authors and Affiliations
Iryna Oleksandrivna Pienska, Maryna Andriivna Chychypan
Keywords
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