Question

Do you think that the tools needed to complete one's financial planning for a singular person VS a large organization are very different? Are the tools used for the large organization the same as the tools for the singular person just on a larger scale?

Answer 1

Financial planning is an important aspect of the business without which a business cannot plan to run in the long run. As per the experts of finance as well, planning is the initial and most crucial stage in any business projection and of the maximum importance for steady and stable growth. Now may that be a small individual business or a large corporation, this idea hardly differs. Whether the size of the business is big or small, it would require certain planning based criteria/ tools based upon which it can implement its foundation and act as a milestone to steadily run the business. In order to support my argument i have mentioned some of the primarily financial planning tools which would be equally important and valid for a singular person, as it is to a large organization:-

1. Accounting Software

Accounting software is a primary tool for an organization to record its Assets, liabilities, Incomes, Expenses in order to summaries/ analyze the same for it reporting needs as well as its analytical needs which is and has to be maintained by all type or organizations, be that a small/medium/ large organization.

2. Budget and Cost Projection

Budgeting is a monthly activity that every organization needs to carry out in order to allocate its limited funds at the right required area. It is an activity that needs to be maintained by all type or organizations, be that a small/medium/ large organization.

3. Payroll Management System

Yet another important business tool that needs to be developed and maintained by both kinds of organization in order to maintain its payroll requirements.

4. Cash Flow Analysis

In all kind of businesses, cash is considered to be the king and it is of utmost importance to maintain an appropriate cash level and analyze the cash flow to know the inward and outward movement of cash which is to be carried out by all kind of organizations.

5. Break-even Analysis

Every organization needs to find out its breakeven point, ie the point at which it will not incur any loss of money. Analyzing the BEP helps the organization to determine the minimum target that it needs to achieve and outperform those numbers to generate profits for the organization which becomes important to all kinds of business.

As a result we can conclude that majority tools needed to complete one's financial planning for a singular person VS a large organization are not very different from each other and runs on the same lines.