Financial forecasting and planning are interrelated elements of management

The elements of management of economic and social warehouse processes are planning and forecasting. They are used to determine the most appropriate areas of economic development, to adjust the growth rates of certain industries. Financial forecasting and planning - the concepts are not identical to each other, they are designed to perform various tasks. Financial forecasting and planning are very important, both for an individual enterprise and for the whole country, because these elements of management form the conditions for the realization of the assigned tasks.

In broad terms, financial forecasting is aimed at studying the expected economic situation in the future. Forecasting develops strategies to ensure the sustainability of the enterprise and determines the direction of investment, as well as articles to finance costs. In the narrow sense, the concept of "forecasting" is applied to calculations, when drawing up financial plans, for example, when forecasting the volume of sales, for forecasting the cost price. Forecasting gives the calculations a certain elasticity, allows you to introduce amendments in connection with changed circumstances.

Financial forecasting and planning are also important for external users of this kind of information. For example, banks conduct forecasting of the financial condition of creditor enterprises . The methodology for assessing the likelihood of deteriorating financial condition allows you to quickly respond to forecasts for bankruptcy and take appropriate action. Depending on the results of the assessment of the state by the bank, the enterprise can be recognized as insolvent, therefore, options for restoring solvency may be offered to it.

Financial forecasting forms the preconditions for financial planning. Depending on the period, the forecast can be medium and long term. Financial forecasting determines the ability to manage the movement of financial flows and precedes planning.

One of the key tools of economic management is planning. There is no common planning principle , the financial plan synchronizes the enrollment and expenditure of funds, and each organization carries out the planning process based on its experience and needs, in particular, the adequacy of funds for financing the future activities of the enterprise is assessed.

At the state level, the principles of effective public financial management are applied, which ensure the stable implementation of state programs in the social sphere. These include: tax and budget transparency, long-term sustainability of the country's budgets, an effective system of relations between budgets, consolidation of the budgetary process, financial planning for the medium term, budgeting, with emphasis on results, financial control and reporting. These principles exist in the format of a unified system for managing public finances, which must constantly evolve and adapt to conditions and changing tasks.

Financial plans are divided into: current, operational and prospective. The importance of decisions taken during planning is extended to the long-term perspective. Long-term plans are a design, the elements of which are short-term plans. If we talk about enterprises, they, mainly because of lack of experience and time, use short-term planning, that is, one year ahead. The annual budget is divided into quarterly and monthly plans. Financial forecasting and planning at enterprises can be carried out differently, depending on the size and size of the organization, but always aimed at the formation of goals and their implementation in the future.