According to Glenn Stevick, financial planning process has six steps: “establish financial goals, gather relevant data, analyze the data, develop a plan for achieving goals, implement the plan and finally, monitor the plan” (Stevick, 2006). It is imperative for a business to have and use because without establishing goals and managing where money is being expended, those goals may end up being obsolete and as a result, a closed business. In order to accomplish these six steps, there are two fundamentals of business in regards to financial management or financial planning. These two are “represented by management accounting and corporate finance; Managerial accounting includes techniques for financial analysis, costing the activities of the
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The very essence of financial planning is to be goal based, whether it be through savings, investing and even risk management. The goals-based financial planning process will help to drive the financial plan which is needed to run a business effectively. Keeping in mind, not all business goals will be achieved, but it helps to understand what is important before identifying the plan to achieve said goals. “After the goals have been defined and the resources have been identified, the optimal strategy must be determined. Determining the strategy may require revisiting the resources available, as well as the goals” (Blanchett, 2015, p. 49). For example, Blanchett mentions “if the optimal strategy is not consistent with the client’s wishes, it may result in the client having to save more than originally planned. After the plan has been determined it should be implemented. This may require opening up new accounts and making potentially significant changes in how savings are directed” (2015, p. …show more content…
These are inherent within the six steps to successful financial planning. Some things to consider when managing these payables is to communicate with vendors if there is a need to delay payments, review offers of discounts to avoid fine print errors which may cost more in the long run and consider flexible payment terms to improve the cash flow rather than something on sale or the lowest price option. Keeping in mind, businesses suffer shortfalls (very likely in start-up companies), it’s how you recover that will either pick your business up off the ground or force you to go out of
The very essence of financial planning is to be goal based, whether it be through savings, investing and even risk management. The goals-based financial planning process will help to drive the financial plan which is needed to run a business effectively. Keeping in mind, not all business goals will be achieved, but it helps to understand what is important before identifying the plan to achieve said goals. “After the goals have been defined and the resources have been identified, the optimal strategy must be determined. Determining the strategy may require revisiting the resources available, as well as the goals” (Blanchett, 2015, p. 49). For example, Blanchett mentions “if the optimal strategy is not consistent with the client’s wishes, it may result in the client having to save more than originally planned. After the plan has been determined it should be implemented. This may require opening up new accounts and making potentially significant changes in how savings are directed” (2015, p. …show more content…
These are inherent within the six steps to successful financial planning. Some things to consider when managing these payables is to communicate with vendors if there is a need to delay payments, review offers of discounts to avoid fine print errors which may cost more in the long run and consider flexible payment terms to improve the cash flow rather than something on sale or the lowest price option. Keeping in mind, businesses suffer shortfalls (very likely in start-up companies), it’s how you recover that will either pick your business up off the ground or force you to go out of