Correctly managing the finances in a company is essential to meet the objectives set and to optimize the resources that in the long term will allow them to achieve their growth. Currently small and medium size business have as their main challenge to reach and maintain the break-even point. Financial planning is a tool that allows them to meet these objectives.

A financial plan is prepared for a specific period, where all expected income and expenses is considered. Planning uses historical financial information from the company to make projections and set economic goals that guide its construction. The degree of control over a financial plan is accompanied by continuous monitoring, to detect management errors and deviations to be able to make corrections quickly.

The basis of the planning is the forecasts originated in historical data and in calculated approximations; it is a challenge to strictly comply with what is stipulated in the plan. That is why we have for you 5 tips that will help you meet these objectives:

1. Set realistic goals: It is key not to overestimate income or expenses so that, during the execution of the plan, the objectives and goals set can be achieved.
2. Control small expenses: These “ant” expenses represent an almost imperceptible leakage of money. For this reason, controlling them in detailed will help reduce the chances of suffering from a lack of liquidity preventing the company the achievement of the goals set.
3. Keep track of all your financial movements: One of the most efficient ways to comply with the provisions of the financial plan is to control each of the expenses made in the company, and thus recognize the consumption patterns and possible deviations in the budget.
4. Periodically review the risks: Being prepared for unexpected situations will make a big difference in the financial health of your business and avoid a possible scenario of lack of resources to cover fixed monthly obligations that allow you to continue with your operations.
5. Automate your processes: Currently, there are many technological solutions that help with the management of expenses and carry an automated control of each of the disbursements made by a company. In addition, they generate timely information to know the real situation of the business at a specific period of time.

Financial planning provides several benefits to companies such as: facilitating the periodic evaluation of the economic resources and that both financial and investment decisions are made based on expected profitability and productivity.

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