Types of Financial Plans

After the company starts, the finance manager does the financial planning

The types of financial plans are depicted and briefly explained below.

types of financial plans

There are three types of financial plans:-,

    Short-term financial plan is prepared for maximum one year. This plan looks after the working capital needs of the company.

    Medium-term financial plan is prepared for a period of one to five years. This plan looks after replacement and maintenance of assets, research and development, etc.

    Long-term financial plan is prepared for a period of more than five years. It looks after the long-term financial objectives of the company, its capital structure, expansion activities, etc.

Financial Planning

What is Financial Planning? Meaning

Financial planning means to prepare the financial plan. A financial plan is also called Capital Plan.

A financial plan is an estimate of the total capital requirements of the company. It selects the most economical sources of finance. It also tells us how to use this finance profitably. Financial plan gives a total picture of the future financial activities of the company.

what is financial planning meaning

Financial Planning is the mathematical sum of following parameters:-

Financial Resources (FR) + Financial Techniques (FT) = Financial Planning.

A financial plan contains answers to the following questions:-

    How much finance (short-term, medium-term and long-term) will be required by the company?

    From where this finance will be acquired (gathered)? In other words, what are the sources of finance? That is, owned capital (promoter contribution, share capital) and borrowed capital (debentures, loans, overdrafts, etc.).

    How the company will use this acquired finance? That is, application or utilisation of funds.

Financial plan is generally prepared during promotion stage. It is prepared by the Promoters (entrepreneurs) with the help of experienced (practising) professionals. The promoters must be very careful while preparing the financial plan. This is because a bad financial plan will lead to over-capitalization or under-capitalization. It is very difficult to correct a bad financial plan. Hence immense care must be taken while preparing a financial plan.

Features of Finance

The main characteristics or features of finance are depicted below.

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1. Investment Opportunities

In Finance, Investment can be explained as a utilisation of money for profit or returns.

Investment can be done by:-

1.         Creating physical assets with the money (such as development of land, acquiring commercial assets, etc.),

2.         Carrying on business activities (like manufacturing, trading, etc.), and

3.         Acquiring financial securities (such as shares, bonds, units of mutual funds, etc.).

Investment opportunities are commitments of monetary resources at different times with an expectation of economic returns in the future.

2. Profitable Opportunities

In Finance, Profitable opportunities are considered as an important aspiration (goal).

Profitable opportunities signify that the firm must utilize its available resources most efficiently under the conditions of cut-throat competitive markets.

Profitable opportunities shall be a vision. It shall not result in short-term profits at the expense of long-term gains.

For example, business carried on with non-compliance of law, unethical ways of acquiring the business, etc., usually may result in huge short-term profits but may also hinder the smooth possibility of long-term gains and survival of business in the future.

3. Optimal Mix of Funds

Finance is concerned with the best optimal mix of funds in order to obtain the desired and determined results respectively.

Primarily, funds are of two types, namely,

1.         Owned funds (Promoter Contribution, Equity shares, etc.), and

2.         Borrowed funds (Bank Loan, Bank overdraft, Debentures, etc).

The composition of funds should be such that it shall not result in loss of profits to the Entrepreneurs (Promoters) and must recover the cost of business units effectively and efficiently.

4. System of Internal Controls

Finance is concerned with internal controls maintained in the organisation or workplace.

Internal controls are set of rules and regulations framed at the inception stage of the organisation, and they are altered as per the requirement of its business.

However, these rules and regulations are monitored at various intervals to accomplish the same which have been consistently followed.

5. Future Decision Making

Finance is concerned with the future decision of the organisation.

A "Good Finance” is an indicator of growth and good returns. This is possible only with the good analytical decision of the organisation. However, the decision shall be framed by giving more emphasis on the present and future perspective (economic conditions) respectively.

 Conclusion on Finance

Finance to be more precise is concerned with the management of,

1.         Owned funds (promoter contribution),

2.         Raised funds (equity share, preference share, etc.), and

3.         Borrowed funds (loans, debentures, overdrafts, etc.).

At the same time, Finance also encompasses wider perspective of managing the business generated assets and other valuables more efficiently.

What is finace?

• What is ther insurance?
• Type of insurance
• Fanancial Planning
• Feature of finance
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Most common type of insurance

There are many types of insurance in the market. Some are most common and some other are least. Out of those some insurance are most essential in our life .Now we read here about most common type of insurance.

Below you’ll find the most common types of insurance products on the market today:

    Home insurance:

 This insurance is also most common insurance. If there is some natural disaster is occurred at that time this insurance is used. This is split into buildings insurance and contents insurance. If you own your own house, then buildings insurance is normally required by your mortgage lender. In any event, it is a pretty good idea to have this type of insurance as a homeowner. Tenants, on the other hand, usually only have to purchase contents insurance as the landlord is normally responsible for insuring the building.

    Life insurance:

This one of the most common type of insurance .This type of insurance may help if there is sudden accident occurred in their life .This covers the life of the policy holder in the event of untimely death. Usually a lump sum is paid to beneficiaries upon the death of the policy holder.

    Health insurance:

Our life is not permanent .There is many ups and down in our life .Doing insurance for life save’s our life from life incident or from any type of fatal deases .We canot provide money easily in sudden accident at that time insurance only the way .This type of insurance enables us to seek private treatment for most types of illnesses and health problems. The benefits of having private treatment are having access to better facilities and also shorter waiting lists.

    Automobile insurance:

This insurance also called as vehicle insurance . This is used when there is sudden accident in our travel life . There is many more option for this insurance also.  A legal requirement for all drivers. Car insurance quotes can vary wildly and there are specialist insurers for certain categories of drivers and certain types of car.

What is ther insurance?

life insurance secure the life

Insurance is a form of risk management the main purpose of insurance is  used to hedge against the risk of a contingent, sudden accident and uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage 

What is Payza?

 Payza is an kind of online bank through which we can do any kind of financial activities through the internet such as sending money from one place to other ,buying goods from online ,transferring money from one account to other and so on  . For personal users, it is a low-cost method for transferring money internationally and a platform for the purchase of goods and services online. For merchants, Payza serves as a platform for e-commerce processing, corporate disbursements and online business management tools, including invoicing and foreign exchange. Payza is a U.S. licensed money transmitter agent with offices in London, New York, Montreal, Mumbai, Dhaka, Solna, Moldova and many other countries .

Features

Payza supports sending and receiving payments in 190+ countries in 21 currencies, including developing and under served marketplaces. Individual customers can open an account with Payza through registering their email address and personal data on the company's website. Completing an optional identity verification process allows the sending/receiving of higher-value payments. Accounts are identified by email address associated with them; consequently, payments made from a Payza account (other than withdrawals to one’s own bank account or a prepaid card) is like "sending" money to an email address. For businesses, Payza provides several business management tools such as checkout buttons, shopping carts, support for invoicing and payouts, and tools for developers to integrate Payza with their websites.

General Services

•           Remittances to/from over 190+ countries

•           Electronic invoices

•           Credit card payment processing

•           Prepaid cards

•           Fraud prevention and security

•           Currency exchange

•           Tools for business management

•           APIs and other resources for developers

Mobile Banking

Mobile banking (also known as M-Banking, mbanking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA).

Mobile banking and Mobile payments are often, incorrectly, used interchangeably. The two terms are differentiated by their service provider-to-consumer relationship; financial institution-to-consumer versus commercial institution-to-consumer for mobile banking and payments, respectively. Mobile Banking involves using mobile devices gain to access financial services. Mobile payments on the other hand may be defined as the use of mobile devices to pay for goods or services either at the point of purchase or remotely. Bill payment is not considered a form of mobile payment because it does not occur in real time.

The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers

Mobile banking has until recently (2010) most often been performed via SMS or the mobile web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the mobile device. With that said, advancements in web technologies such as HTML5, CSS3 and JavaScript have seen more banks launching mobile web based services to compliment native applications. A recent study (May 2012) by Mapa Research suggests that over a third of banks have mobile device detection upon visiting the banks' main website. A number of things can happen on mobile detection such as redirecting to an app store, redirection to a mobile banking specific website or providing a menu of mobile banking options for the user to choose from of which visiting the main homepage is one.