Question

What is required to tackle the uncertainty in respect of availability and timings of funds?

Name the concept involved and explain any three points of its importance?

Answer 1

Financial planning helps in determining the objectives, policies, procedures, programmes and budgets to deal with the financial activities of an enterprise.

The following points highlight the importance of financial planning:

• Helps in coordinating: By providing clear policies and procedures, it helps in coordinating various business functions.
  
• Proper utilisation of funds Finance acts as the life-blood for an organisation. For smooth functioning, it is required by every organisation. Financial planning ensures availability of funds whenever required. Thus, it helps in proper utilisation of funds.
  
• Base for financial control It helps in providing the base for checking and comparing activities from the financial viewpoint.