| There are some basic building blocks of financial | | | | control must be clearly defined in the implementation |
| planning that span the gap between business models | | | | part of the plan. This includes the assignment of |
| and personal financial planning. They actually apply | | | | responsibilities and the delegation of power to |
| equally to small business and international corporations | | | | designated managers. Control is tied to accounting |
| What are some of the pillars of financial planning? | | | | and it must be strictly enforced. Business models |
| The first is the plan. Although this might sound overly | | | | have legal obligations to maintain accurate control and |
| simple, it is surprising how many overlook its | | | | accounting procedures not merely as part of their |
| necessity and handle financial management by the | | | | responsibilities when they are a publicly held company, |
| seat of the pants method. In order to have a | | | | but for taxation purposes as well. |
| successful plan, there must be a clearly defined | | | | Another building block of sound financial planning is |
| objective. The objective represents the vision of | | | | evaluation and measurement. It is common to |
| where the organization wishes to be in a certain | | | | establish what are known as milestones within the |
| period of time. It is said that is represents a vision | | | | financial planning process. These might be called short |
| rather than a goal. To say, the goal is to make a | | | | term goals. They are used primarily to measure |
| profit is too simple. | | | | progress and suggest corrective action. |
| The objective of the organization must be visionary | | | | A final building block of all sound financial planning is |
| and detailed in scope, but it also must be practical | | | | risk management. The whole idea of the planning |
| and attainable. Although financial managers may be | | | | process is as much to reduce the risk of failure as to |
| involved in the process, the ultimate responsibility for | | | | reach the visionary goal. The two concepts are |
| the creation of the vision rests at a higher level. It is | | | | closely tied together, of course, and if the journey |
| the goal of the financial manager to create the | | | | toward the goal is seen as a gamble like a roll of the |
| implementation part of the plan. This represents the | | | | dice, financial planning is not really needed. The whole |
| second rule of financial planning. It is control. | | | | idea is to do everything possible to reduce the |
| Control is most often seen as a function of financial | | | | possibility of failure and so risk management is part |
| management, but it is a elemental part of the | | | | of the financial planning process from the beginning. |
| planning process as well. The systems that will allow | | | | |