Financial Planning is important for business. But many people don’t know how to do financial planning for business in India. Hence, this article shows you few simple steps on how to do financial planning for a business in India. So let’s begin with what the Indian financial experts say about financial planning.
According to financial experts, a good financial plan is made of three things. These include forecasting, budgeting & financial controls. Further, let’s see how you can use these three elements of financial planning for your business.
How to do Financial Planning for Business in India | Forecasting Tip
Forecasting means making reports about events whose results are yet to be observed. Companies use forecasting to determine how they can distribute their budgets for future.
So you should have both, short term & long term forecasting. This will ensure that you’re prepared for the next week & the next decade. In short term planning, consider your product’s industry outlook. Analyse your customer base as well. Also, analyze their spending patterns in future.
However, long term forecasting is a little difficult. So constantly adjust yourself to remain on the top of all the changes that occur.
How to do Financial Planning for Business in India | Budgeting Tip
The budget is made up of three budgets. First is the capital budget. This budget outlines your expected expenses for business assets. The second is the cash flow budget. This is based on your estimated cash flow to predict income. The third is the operating budget. This budget predicts both; expenses & income. So you should manage these budgets regularly.
Further, let’s see the importance of controls in financial planning.
How to do Financial Planning for Business in India | Controls
Controls ensure that your expenses stay low. Controls minimize probability for error as well. They also prohibit employee theft. One of the basic controls includes taking two signatures on every check. It also includes allowing few people to access the cash box.
These three steps are followed by both; big and small companies. So follow these simple steps & have a secured financial future for your business.