Tuesday 27 November 2012

4. Provide an accurate description of financial management techniques, including financial forecasting and cash flow management.


Financial management techniques is the planning, monitoring and organising of your company resources and ensuring that nothing is wasted, and that profits are gained.

Some techniques that can be used are

 

Setting goals:  Have a good clear understanding of what you are aiming to achieve

Budget creation:  List all sources of outgoing and incomings make a realistic budget that you can stick to.

Budget maintenance:  Keep an eye on your budgets by tracking expenses

 

Financial forecasting is thinking about and preparing for the future and controlling the cash flow of your company. When starting out this is more difficult to do as it is really a best guess of what will happen financial with your business and new businesses will not yet have the trading history needed.  

 

Cash flow management allows you to monitor and estimate the amount of cash you will have at any one time, allowing you to see the cash outflow and inflow. A cash flow analysis should be done often so you can prepare and deal with any cash issue that may arise.

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