The basic function of finance planning and analysis is to create and manage the financial resources of a company for optimal utilization. This entails creating an operational plan, evaluating the existing assets and liabilities in order to establish financial forecasts, and forecasting the future performance of the company. It is not uncommon for senior financial officers to engage in finance planning and analysis as part of their job responsibilities. A good number of investment banks, brokerage firms, management companies, and insurance companies employ finance professionals as representatives of their clients in this capacity.
The primary role of finance planning and analysis is to ensure that financial requirements are fulfilled by the company. This may include planning for a purchase of property or equipment, debt repayment, and establishment of a corporate pension plan. They may also be asked to conduct periodic analysis and research in order to determine whether or not a business can improve its cash flow. Finance planning and analysis are often carried out by finance planning and analysis departments that report directly to senior management. There are many advantages to employing an outside company to provide this service for your business. Outside consultants can access the appropriate tools for analyzing financial data that cannot be easily obtained within the company, they can offer comprehensive finance planning and analysis, and they will typically have strong relationships with other financial businesses.
In addition to the advantages noted above, finance planning and analysis can save a company a substantial amount of time and money. An outside firm will generally handle all aspects of the finance planning and analysis including identification of the appropriate balance of assets and liabilities. This prevents senior managers from having to spend valuable time reviewing each of the individual’s plans. They will instead be able to focus on running the business effectively while spending time with the company’s key partners. This type of analysis can also make it easier to reach an agreement with financing institutions for the repayment of debt obligations.