Effective Capital Management in Corporate Financial Planning

financial advisor for corporate planning

Corporate financial planning is much more challenging than individual wealth management. In a corporate environment, there is an ever-evolving range of costs. There is a comprehensive and efficient financial planning process needed to adapt and change continuously as challenges or opportunities arise. 

An experienced business financial advisor can help your company leaders or financial planning and analysis (FP&A) team keep a keen eye on these details and the changes ahead. From supply costs to depreciating assets, new allocations, and growth to changing tax laws, multi-faceted financial planning requires an inherent ability to spot opportunities and identify ways to shave excess costs.  

The professional financial experts at Saddock Advisory can be your guide when it comes to corporate financial planning services and optimizing your short and long-term goals. 

In the meantime, however, when reviewing your plans for effective capital management, keep the following guidelines in mind to ensure a clear evaluation process and the ability to spot room for improvement. 

Understand Your Current Costs & How They May Change 

The main purpose of working with capital management is to maintain sufficient cash flow to meet both short-term operating costs and debt obligations. That starts by having a complete account of the funds that flow through your business on a daily basis. 

In that vein, smart financial planning starts with a comprehensive understanding of how your business is financially fairing now and what might change in the weeks, months, and years ahead.  

When reviewing your costs, take stock of the following: 

Cash and Receivables  

Understanding the money flowing into your business is imperative, as well as whether this may change in the future and why. Pay attention to your current credit policies and improve collection practices as needed. Incoming cash or payments should not be considered a definitive asset if they have not been received.  

Inventory and Supplies  

 Your inventory includes all your products, to be sure, but it also includes your office equipment, cell phones, everyday supplies, and every object that allows your business to function. When examining these costs, consider what supplies may have to be replaced or upgraded in the near future – such as outdated computers or software.  

Payables and Debt  

 Your business has several recurring payments to suppliers and vendors, including the rent for office space, utilities, and other regular expenses. Take stock of your current recurring payments and see if there is room for improvement. For example, companies often have a say in how suppliers are paid, which includes credit terms and interest rates. 

Set Financial Goals 

Once you have reviewed your current expenses (and identified any forthcoming changes), it’s time to draw up a broader plan that connects your short-term expenses with your long-term goals. 

Define Clear and Measurable Financial Goals 

One of the most difficult tasks for corporate leaders and FP&A teams is to connect the dots between short-term, mid-term, and long-term goals. Therefore, a good way to start is to work backward. For example, if your ultimate goal is to expand to multiple areas, consider the steps required. The more you can make a connection between now and your ultimate ambitions, the easier the path will be to long-term success. 

Budget and Forecast 

Budgeting requires identifying opportunities to cut costs now and recognizing the challenges that may lie ahead, like a supply shortage, inflation, rising rental prices, or other potential hurdles. Talk to all of your departments and gain their insight on what they see as potential challenges in their area of the business. This will help identify any looming issues before they become immediate financial problems.  

Find Opportunities 

With your end goal in mind, keep a constant eye on potential opportunities that will get you closer to the finish line, whether it’s new federal tax credits or opportunities to merge or expand. An exceptional corporate financial planning services provider can help with these opportunities. They can also assist in ensuring that a new, big move will benefit your company.  

Determine Your Risk Management 

Part of growth involves a bit of risk, and it’s helpful to understand how much risk your company can handle. This will be tied to your current working capital management and the assets or savings you have in case you encounter financial hurdles along the way. Take stock of all your investments and assets and let that be your guide as to how much you can handle when it comes to potentially risky new ventures or acquisitions. 

Have a Partner that Can Provide a Fresh Perspective 

One of the best ways to comprehensively review your current and future financial partners is to have an exceptional partner that can review your capital management with a fresh and outside perspective. Top performing businesses have exceptional accounting and financial planning personnel to tackle these details can be easy. However, losing sight of excess costs or missed opportunities in the muddled everyday budgeting details.  

In addition, smaller companies on the edge of growth may not have the in-house resources to identify the steps to long-term success. As a result, outsourcing their financial needs may be a smart strategy that will earn financial rewards well into the future without breaking the budget now. 

Start Your Financial Planning Journey with the Experts at Saddock Advisory

At Saddock Advisory, we provide capital management and financial planning services for companies of all sizes, acting as your personal CFO in every aspect. From managing taxes, capital, and investments, to facilitating growth and responding to disruptions in your industry, we can help with all of the rises and falls your business may encounter in the years to come.

 Tell us about your business, your challenges, and your long-term ambitions. With the financial experts at Saddock Advisory at your side, we can create a financial plan that will adapt to all the obstacles, changes, and opportunities ahead.

Contact us today. 

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