Strategic financial planning

[pic 1]

FACULTY OF BUSINESS

ACCOUNTING SCHOOL

ACADEMIC REPORT

COURSE:

STRATEGIC FINANCIAL PLANNING

AUTHOR:

Huamancusi Ventocilla Thalía

TEACHER

José Luis Condori Hilario

Sede - Perú

(2023)

INDICE

I.        INTRODUCTION        3

II.        DEVELOPMENT        5

III.        REFERENCIAS BIBLIOGRÁFICAS        9

                ANEXO

1. INTRODUCTION

Financial management is a process that is part of the administration and finance area of a company, although it can also be applied to personal activities. Below we tell you the main guidelines to understand the concept of financial management in administration and finance and how to carry it out to make the best decisions.

Financial management: definition and important elements

In a global way, finance belongs to the science of economics and there are various types of application:

• Public finances
• Personal finances
• Corporate finance
• Finance for entrepreneurs

Financial management is a procedure whose purpose is to analyze, understand, obtain and use the economic resources of a company, and to do so in a balanced way that is profitable at a certain time. That is, economic security, regardless of the scope of application or use.

In the business environment, the area in charge of financial management must have vision and ensure that the company has sufficient liquidity to meet its short-term expenses, so for this point it is essential that the company carries out, in time and form, the collection of clients to have the ideal income in cash.

Financial management is based on some general principles that serve as a guide to make better decisions. Some of them are trade-off risk and return, optimal capital structure, diversification, cash flow contingencies, etc.

What are the objectives of financial management?

The main objectives pursued by financial management are:

On the one hand, increase the well-being of the company's owners or shareholders.

On the other hand, develop methods or systems that serve as support in the area of finance.

It is important to know some elements that make up financial management, and that are essential within the process, such as:

• Income
• Cash flow
• Capital
• Investment
• Assets

Functions of financial management

The importance of financial management is to guarantee the development and survival of a company. The strategic needs that must be met are:

• Increase profits, by increasing price or reducing production costs
• Manage debts
• Safely ensure investments through policies and asset management
• Apply financial resources
• Monitor liquidity
• State economic needs
• Prepare the financial analysis
• Have inventory control
• Financial management process

The various stages of this activity involve clients, suppliers and banking entities. It is a comprehensive technique that seeks financial balance. These stages on how to do financial management are:

Definition of need

Determine the need or situation to be resolved and estimate the resources available to start the operation. For example, if a person is interested in investing in the stock market, it is important to define what, how, when and why, in order to establish the direction to be taken.

Establish the mode and method of financing

At this stage it is essential to define the financial structure. In other words, determine the resources that will be used, your own or third parties. If you choose the last option, it is necessary to know the various methods available, such as a bank loan. Likewise, it is important to know the interest rate and all the conditions.

Resource management

The distribution of resources, such as meeting commitments between suppliers and collaborators, is essential at this stage. From here the solvency or degree of debt that the company has will be determined.

Project evaluation

How do you know if an idea or project is viable? First it is necessary to make an evaluation based on the investment plans or financial projection. If this is positive, it is possible to continue with the estimate.

As you will see, this is a broad topic. With this post we seek to help you make your finances solid in any environment. Our best suggestion is to go hand in hand with financial experts so that your decisions positively impact your financial well-being.

1. DEVELOPMENT

Understand financial management

The definition of financial management is the strategic practice of establishing, controlling and monitoring all financial resources to achieve your business objectives. It includes many areas of financial functions that revolve around profitability, expenses, cash flow and credit for finance managers in accounting, customer and supplier teams.

To create a lucrative financial management business strategy you will need to focus on three key principles:

Predicting future financial returns with the help of financial forecasts, proven features needed to drive growth and preparing for regulatory capital requirements.

Prioritization of long-term initiatives.

Plans adapted to your business model, market dynamics and organization.

Effective financial management planning provides your finance teams with the data they need to enable the creation of a never-ending business plan, facilitating informed decisions on where they should invest and the insights needed to fund those investments, liquidity and profitability.

The importance of financial management

As the world expands through globalization, you will need to keep your business competitive in the marketplace to achieve longevity. And to ensure you make sales for a long time, your company needs a financial management system. Implementing a system that tracks all revenue streams is important for your organization as it will help you:

...