Processes: Planning and Implementing Flashcards
Financial Needs
Working out how much funding a business will need
Budgets
An estimate of business position or performance e.g. cashflow forecast, profit forecast, revenue forecast, promotion budget, etc.
Record systems
How transactions are recorded in the financial system to ensure they are accurate
Financial risks
The risk of financial loss for a business e.g. exchange rate risk (risk of adverse movements in rates), credit risk (risk customers don’t pay for goods)
Financial Controls: Debt
Funding that comes from external sources such as banks
Financial controls: equity financing
funding that comes from internal sources e.g. investor capital, shares
Financial controls: Matching the terms and source of finance to business purpose
Long term funds should be used for long term reasons e.g. mortgage for a factory purchase and short term funds for short term needs e.g. overdraft to pay suppliers.
