Financial Terms: Financial Planning

What is financial planning?

Financial planning refers to the conscious application of taxpayers or their agents on the premise of being legitimate and legitimate.

The development of enterprises is inseparable from financial planning. Due to the formation of global villages, international financial planning is becoming more and more common.

The international financial planning of enterprises includes several aspects: fiscal and tax arrangements, offshore investment, reasonable tax avoidance, capital hedging, international investment and financing matching, asset management and trust, etc.

Characteristics of financial planning

Financial planning is a holistic decision making for financial activities of an enterprise. Its focus is not on the current, but on the future. It is based on the long term.

1, the overall situation.

Financial planning is based on the overall financing, investment and management of the whole enterprise, and is formulated according to the long-term development needs of the enterprise.

It is a description of the overall development strategy theory from the financial point of view. It is a program of action and blueprint for the future financial activities of the enterprise, and plays a guiding role in the specific financial work of the enterprise.

2, long-term.

Making financial planning is not to solve the current problems of enterprises, but to seek long-term development of enterprises.

Therefore, once the financial planning is formulated, it will have a significant impact on the financial activities of the company in the long term.

3, risk.

Because the business environment of enterprises is always changing, the financial planning of enterprises is also accompanied by certain risks.

The size of financial planning risk depends on the knowledge, experience and judgment ability of financial decision-makers.

Once a scientific and rational financial planning is realized, it will bring vitality and vitality to the enterprise and make the enterprise develop rapidly. Otherwise, it will also cause some losses to the enterprise and cause the enterprise to get into financial difficulties.

4, adaptability.

The essence of modern enterprise management is to balance the three relationships between external environment, internal conditions and business objectives in complex and changeable environment.

Financial planning integrates the enterprise and the external environment. Through analysis and evaluation, it can avoid the problems arising from the financial management and enhance the adaptability of enterprises to various complex factors.

The role of financial planning

1. clear correlation: financial planning should clarify the relationship between the investment plans of different business activities and the feasible financing choices of enterprises.

2. propose alternatives: financial planning enables enterprises to be clear about various investment and financing options.

In the various plans listed in the financial planning, enterprises need to know what is the best and must evaluate each plan.

3. analysis of feasibility: different plans should be adapted to the company's overall goal, namely, the maximization of shareholder wealth.

4. avoid accidental change: financial planning must indicate what will happen if a particular event occurs.