What is Planning?
According to CIMA's Management Accounting: Official Terminology,
Planning
is the establishment of objectives, and the formulation, evaluation,
and selection of the policies, strategies, tactics and action required
to achieve them. Planning comprises long-term/strategic planning and short-term operation planning. The latter is usually for a period of up to one year.
Various types of planning are required in an organisation, including:
Capital funding planning: the process of selecting suitable funds to finance long-term assets and working capital.
Capital resource planning: the process of evaluating and selecting long-term assets to meet strategies.
Financial planning: planning the acquisition of funds to finance planned activities.
Futuristic planning: planning for that period which extends beyond the planning
horizon in the form of future expected conditions which may exist in
respect of the entity, products/services and environment but which
cannot usefully be expressed in quantified terms. An example would be
working out the actions needed in a future with no motor cars.
Strategic planning:
the formulation, evaluation and selection of strategies for the purpose
of preparing a long-term plan of action to attain objectives. Also
known as corporate planning and long-range planning.
Tactical planning: planning the utilisation of resources to achieve specific objectives in the most effective and efficient way.
To be effective, business planning
(which includes budgeting) needs to be undertaken using appropriate
techniques and processes and must utilise, in particular,
well-developed financial models. axiom-e's staff can develop these models for you and, if desired, can manage the business planning process for you.
Management control is defined as:
all of the processes used by
managers to ensure that organisational goals are achieved and
procedures adhered to, and that the organisation responds appropriately
to changes in its environment.
The development of suitable plans facilitates management control and
helps to ensure that regular appropriate and necessary performance
measurement and reporting can occur.
How axiom-e can help
axiom-e specialises in Business Planning and Control in the broadest sense. This often involves us in preparing Business Plans
axiom-e can help to:
- arrange equity and loan finance
- structure deals for buying/selling businesses
- prepare proposals for major capital expenditure projects
Whilst appearing to be quite disparate, these three activities are
related by the fact that they all require a clear plan of action to be
prepared which sets out what expenditure (or investment) is required,
what the expected benefits (or returns) are and how risky the proposal
is perceived to be. These factors are often brought together in a
formal Business Plan or Investment Proposal. |
