Question

2. How do the various functional departments of an organization use financial planning (i.e. marketing, operations, sales, executive management, finance, etc.)?

Answer 1

financial planning is estimating capital required in order to carry out a process. It should consider the budget allocated, competitiors, time period and many other factors. It is a step by step approach and it is important for all functional department of an organization to use financial planning.

If we understand marketing as a department, financial planning is required to understand intially what is the approximate budget required and budget allocated. Accordingly, we need to look at the various channels in marketing and assign budget accordingly. we need to also understand if any new product is being launched. If so, we need to accordingly either reduce marketing budget for existing products or change overall strategy. by using this structured approch and financial planning, one can achieve their target.

Similarly, HR department needs to financial planning to understand the cost of overall recrutiment costs and number of employees employeed. the cost incurred and accordingly the budget allocated. operations team would look at the cost of procurement, how to reduce the overall cost. all this require financial planning. hence it is the most important thing across all departments in an organization.