Do your strategic corporate financial planning in 5 steps

Strategic corporate financial planning not only contributes to achieving goals and objectives: it prevents problems that can interfere with the organization's health and sustainability, potentially condemning it to failure.

In this post, we list important information and tips for corporate financial planning. Keep reading to learn more about the topic!

What is strategic corporate financial planning and what is it for? 

Strategic planning is a fundamental control tool to ensure cash health and the achievement of proposed goals, so that the organization can increase its earnings and stand out in the market.

Well-structured companies develop strategic plans for various areas: marketing, people management, corporate governance, among others. All of them invest in strategic corporate financial planning, after all, everything revolves around finance: costs, revenues, profits, and sales.

In addition to increasing profitability, planning is essential to maintain competitive advantage and optimize the budget. A well‑oriented strategy facilitates negotiations with suppliers, the adoption of better policies for human capital, and alternatives that bring long‑term savings — such as the use of clean energy.

For this to happen, it is important that strategic planning considers aspects such as: 

• analysis of the internal and external environment;

• definition of goals;

• selection of metrics and performance indicators.  

What is the importance of strategic financial planning for the company?

Failing to give proper importance to management topics such as financial planning is the same as not caring about cash inflows and outflows, disregarding working capital, and, worse, having no idea how your costs and monthly expenses are doing. 

Can you imagine how results can be negative if these points are neglected? What would it mean not to have control over corporate financial planning? This is a huge risk for the company, increasing the possibility of indebtedness and potentially leading to business closure.

If we think of caring for a business as similar to raising a child, we realize that making strategic decisions like corporate financial planning is one of the most important tools to achieve success. Take advantage of the benefits this planning brings to make your business stronger and stronger!

How to do corporate financial planning?

When developing financial planning, managers need to be very attentive and sensible, because, as you have seen so far, it is extremely important for maintaining financial health and supporting business strategies.  

Initially, it is necessary to choose the company's analysis methodology — SWOT analysis, PDCA cycle, 5W2H, among others — or combine more than one to define the adopted actions and make adjustments when needed.

Check out 5 steps that should be followed to succeed in this journey!

1. Analyze the company's internal environment

To develop a successful financial plan, you need to know the company's current situation well. Considering market tenure, evaluating business conditions, identifying positive and negative points, analyzing the type of product or service offered, target audience, and how internal and external communication will be carried out are just some of the points to watch.

In short, you must separate everything that composes a business and obtain relevant real information and data, with the goal of making fundamental and correct decisions for the organization's future.

2. Set your objectives

It is important that you establish the objectives you want to achieve. For this, it is essential that goals are organized intelligently. But how do you do that?

First, you need to understand that goals are different from objectives. Goals are short‑term achievements, acting as steps to reach objectives — which are larger achievements, i.e., the results you aim for. 

An important note about goals is that they must be specific, measurable, achievable, relevant, and have a defined deadline.

3. Reduce operational costs

Seek to reduce unnecessary operational costs with simple changes, such as electricity savings, installing sensors, and improving natural lighting in the workplace. If possible, invest in clean energy. Having a sustainable attitude is not only good for the wallet: it is important for protecting the planet.

We call clean energy any production that avoids the release of pollutants or greenhouse gases; unlike energy generated from oil, coal, and natural gas. Water, sun, and wind are considered sustainable sources.

Solar and wind energy are major assets for companies and can significantly reduce costs, also making a huge difference in your business's revenue.

One practice adopted by companies is migrating to the Free Energy Market, which allows direct contracting with suppliers, reducing electricity bills, and betting on efficient management adaptable to the business.

4. Have performance metrics

As we mentioned earlier, it is necessary to adopt performance metrics to monitor and periodically reassess financial planning and the results achieved. 

Imagine that spending in the analyzed period was higher than expected. If the manager is not tracking the numbers, he won’t know it — consequently, he won’t make the necessary adjustments. 

It is not necessary to wait for the project’s completion to make adjustments. Ideally, metric analysis should start when the first results begin to appear so that, over time, comparisons can be made between what was forecasted and what was actually achieved.

Without evaluating and qualifying the strategy being used, and correcting it when necessary, it is impossible to obtain positive results with strategic corporate financial planning.

5. Develop an action plan

The action plan can be created by breaking down the financial planning. The gathered information should be put on paper so that the execution strategies for this project are determined. The organization must define short‑, medium‑, and long‑term objectives, outlining the actions needed to achieve them.

Then, the company should assign responsibility for each team member for the tasks that will be carried out according to the schedule. Finally, analyze the results obtained and document them, to evaluate all information at the end of each stage.  

It is likely that occasional changes in the company or the market may influence changes to your plan, but do not despair: you will have the capacity to handle the situation. After all, that’s what strategic corporate financial planning is for, right?

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