FINANCIAL PLANNING

Financial planning provide overall picture on total input and marketing, funds raise, usage of fund, total cash in hand, estimated fund and approximate business financial status. Management need to ensure that enough funding is available at the right time to meet the needs of the business. In the short term, funding may be needed to invest in equipment and stocks, pay employees and fund sales made on credit. In general usage, financial plan can be a budget, a plan for spending and saving future income. This plan allocates future income to various types expenses, such as rent or utilities and also reserves some income for short-term and long-term savings. A financial plan can also be an investment plan, which allocates savings to various assets or projects expected to produce future income, such as a new business or product line, shares in an existing business, or real estate. In business, a financial plan can refer to three primary financial statements created within a business plan. It can refer to an annual projection of income and expenses for a company or department. In addition, financial plan also can estimate the cash needs and a decision on how to raise the cash, such as through borrowing or issuing additional shares in a company. Nevertheless, financing plan or finance plan is refers to the means by which cash will be acquired to cover future expenses, for instance through earning, borrowing or using saved cash. In financial accounting, a cash flow statement is a financial statement that shows how changes in balance sheet and income accounts affect cash and cash equivalent. The statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. Besides, financial statements are formal records of the financial activities of a business, person, or other entity. Financial statements are often referred to as accounts and particularly used by accountants. Financial statements provide an overview of a business or persons financial condition in both short and long term. There are four basic financial which are balance sheet, income statement, statement of retained earnings and statement of cash flows. Balance sheet always referred to the statement of financial position or condition such as reports on a companys assets, liabilities and ownership equity in a certain time. However, reports on a companys income, expenses, and profits are included in income statement. This statement also included sale and the various expenses incurred during the processing state. All the companys cash flow activities such as its operating, investing and financing activities are reported in statement of cash flow.

The cash flow statement is partitioned into three segments. There are cash flow which resulting from operating activities, cash flow from investing activities and cash flows activities from financing activities. In fact, the money coming into the business is called cash inflow and cash outflow is the money going out from the business. The production, sales and delivery of the companys product as well as collecting payment from customers are all included in operating activities. In addition, receipts from the sale, payments to employees, and interest payments are also including in these operating. In financing activities, there are inflow of cash from investors such as banks and shareholders and the outflow of cash to shareholders as the income of the company. Other activities which impact the long-term liabilities and equity of the company are also listed in the financing activities section of the cash flow statement. Profit is made when we sell a product or service for more than it cost to produce ad assessed when the business makes the sale, not when the customer pays. Meanwhile, cash is generated when the cash inflows (receipts) exceed the cash outflows (payments). However, both sales and costs are same because there are no timing differences. The financial plan should provide facts and figures showing how fast the business is expected to grow and how that growth will be funded. In the medium and long term, funding may be required for significant additions to the productive capacity of the business or to make acquisitions.

FINANCIAL CONTROL
Financial control is a critically important activity to help the business ensure that the business is meeting its objectives. Financial control addresses questions such as: Are assets being used efficiently?

Are the businesses assets secure? Do management act in the best interest of shareholders and in accordance with business rules? Is a chart of accounts used? Is it detailed enough to give adequate management information? Is a double entry bookkeeping system used? Who approves journal entries? Does the owner understand the form and contents of the financial statements? Does the owner use budgets and cash projections? Are they compared to actual results? Are major discrepancies investigated? Are comparative financial statements produced? Are the books and records kept up-to-date and balanced? Who is responsible for producing financial information? Are reasonable due dates imposed? Is staff cross-trained in accounting functions? Are annual vacations required? Are storage facilities safe from fire, etc.? Is access to accounting records restricted when appropriate? Are employees bonded? Is insurance coverage regularly reviewed? Is there a records retention schedule used? Is the owner satisfied that all employees are competent and honest? Are job references checked

Keeping accurate records helps you fulfill your legal requirements. It will also help you monitor your financial position and keep a tight control on cost. Strong financial controls help internal auditing and the operations team have confidence in the numbers being reported to management and help protect the organizations assets. As in any area of operations whether it be gaming, food and beverage, or the hotel the financial controls need to be documented, assessed, revised, and strengthened where necessary and tested regularly.

BALANCE SHEET
Number of unit
BEGINNING CASH

Price per unit (RM)

Total price (RM) 250

A. Cost of goods to be purchases 1. Slipper purchases Black colour slipper Red colour slipper B. Cost of goods to be sold 1. Sales on WEEK 1 Black colour slipper Red colour slipper 5 2 9 10 45 20 24 12 5.8 6.3 139.2 75.6

2. Sales on WEEK 2 Black colour slipper Red colour slipper 8 3 9 10 72 30

3. Sales on WEEK 3 Black colour slipper Red colour slipper 7 4 9 10 63 40

4. Sales on WEEK 4 Black colour slipper Red colour slipper 3 1 9 10 27 10

5. Sales on WEEK 5 Black colour slipper Red colour slipper C. Variable expenses 1. Plastics wrapping 2 1 2 9 10 9 20

D. Fixed expenses 1. Transportation 5

TOTAL CASH PAID OUT ENDING CASH BALANCE NET PROFIT

214.8 336 114.2

CASH FLOW DIAGRAM