7 tips for corporate financial planning in 2022

A well-defined and executed corporate financial planning is essential for supporting strategic business decisions in the new year

By Marcelo Gomez

Businesses are permanently challenged to drive costs down, and to generate increasingly more results while using fewer resources. And whenever a new year starts, it is important to rethink the path that will lead to achieving goals. In this context, corporate financial planning gains momentum as a process that can boost growth and development opportunities.

The clearer the goals, the easier they can be achieved in the next 12 months. With financial planning, it is possible to define actions, tools, and controls to fiercely manage the companies’ finances.

Check out 7 tips for corporate financial planning in 2022:

1. Understand the business’ condition

Corporate financial planning must begin with acknowledging the business’ current condition. This may lead to identifying valuable data, which are also fundamental to guiding the next processes.

You must analyze external factors such as the operating industry, the economic environment, the service demand and so on. Internal factors, as negative and positive points of the operation, the expense structure, the fixed and variable expenses, amongst others, also should be taken into consideration.

This review may identify discrepancies on the asking price, point out the need to drive costs down, and to focus on expanding another product’s supply or service’s provision.

2. Plan scenarios

The business world has its share of surprises and involves several risks and variables. You must prepare both for a favorable outlook and new challenges. The current pandemic is here to show how important it is to be prepared, even for the unexpected.

Defining optimistic, realistic, and pessimistic projections is part of a good corporate financial planning. And the goals must suit these possible panoramas.

3. Set the goals

From the data obtained on the earlier stages, which identified the business’ current condition and the possible scenarios, you may now set goals by pointing out what the company intends to achieve not only in 2022, but also in the medium and long term.

4. Draw up the annual budget

An important point is establishing an annual budget that is in line with the goals for that year, and with the business’ global goals as well. After all, the company’s financial planning must point out to the same corporate strategies.

Furthermore, the budget must take into consideration the different sectors of the company, assessing estimates for expenses on those areas in order to refrain from distress caused by a great amount of unplanned expenses throughout the year.

5. Arrange the plan execution

But how would all of this be executed? Prepare a diagnosis, making projections, setting goals and a schedule will be key points, but the every day of finance takes on a decisive role on the business’ health and sustainability.

Accounts payable/receivable, management of cash flow, budget administration, opening a bank account, financial investment, exchange operations, controllership, budget management are tasks that must be executed, otherwise, all the planning is jeopardized.

What happens in many companies is that there’s not enough time to thoroughly check the finances with the attention with which this field needs to be dealt. Executives experience a growing pressure for efficiency and indicators and, at the same time, they also need to get involved with several daily demands.

Relying on a specialized partner for financial management is the solution that grants conformity and security to take new steps, such as making investments or planning an expansion.

6. Set control mechanisms

Keeping a strict control of the financial area allows the company to make better decisions, keep up with relevant analytics and indicators, measure the investment’s response and detect the need for rearranging the route when the moment comes.

Know more: Best Practices for Business Financial Control

7. Add technology to your financial field

Keeping the financial management under control also requires technological support, an imperative nowadays, due to amount of data with which the field must deal. Technology is a great contributor to the workflow control, making data mining easier so that it assists in decision-making.

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Financial intelligence in planning implementation

Both national and foreign companies from different sizes and industries may count on the support of DPC’s financial management team to support their financial strategy and operation.

Services include the management of payable and receivable accounts, cash flow, management of bank accounts and investments, amongst other crucial processes to keep business’ competitivity.

At DPC, this teamalso acts as a consultant with strong technological support and integrating both the tax and accounting sectors; thus, delivering better results to clients and ensuring more security in regard to information conformity.