The future is always very uncertain; no one can really know what the next minute holds. However, what we can do is carefully plan for the times to come. This is especially critical if you committ to achieve your business goals. Every business either small or big has its own goals and objectives which leads to the company’s growth and success. Therefore, these goals require active and self-sufficient planning for productive implementation.
Before initiating any business venture, irrespective of the size, it is crucial to have all the necessary plans in place. Financial planning being one of the most important – is consider a central process that is directly related to strategic planning. Many businesses set aside the financial planning process to focus on operational issues which is a big no-no because core company processes revolve around finances. Therefore, it is ideal to plan finances before the start of a new financial cycle.
Many companies are moving towards deploying financial technology otherwise known as fintech developmentto automate traditional financial methods for effortless and timely planning. These fintech software development services are using technology to improve financial goals and to avoid failure, all in all. According to a study conducted by CB insights, the second biggest reason why startups fail is that they run out of funding or personal money, which is true for almost 29% of cases. In another study by Fundera, 82% of businesses were shut down due to cash flow problems in the year 2018. Need I say more?
What is financial planning?
Financial planning is a core business strategy that determines the budget that a company needs to ensure its long term and short term stability. It is basically a document that underlines the company’s current financial situation and future budgeting to achieve the goals for financial growth. A comprehensive financial plan involves:
- Analyzing past financial behaviors and reports
- Forecasting expected revenues
- Estimating operational costs
- Identifying and understanding risks
- Budget development for everyday expenses
- Evaluating required resources including employee payroll and benefits
- Inventory management
- Tax planning
Fintech development and the future of financial planning
Nowadays we simply cannot imagine a world without technology, now can we? Technology has become a part of our everyday life. It defines how we work and communicate, similarly, fintech development is transforming how businesses plan and invest. Fintech software developers are developing efficient systems for businesses to rely on. They are using advanced technologies of Artificial Intelligence and Machine learning to bring about significant changes within industries to smooth out financial planning. Financial app developers are bringing in financial services for businesses in the form of enterprise solutions such as web and app-based financial services management systems to help businesses track their budget, and help them explore new ways to save money otherwise wasted. In short, fintech development simplifies accounting and bookkeeping practices for global companies.
Importance of financial planning
Every business needs a financial plan because it offers a road map about where you stand currently and where you want to reach. Growth is exponential but without documenting goals on a piece of paper, you may fail to grow as a business. Aspirations alone are nothing. But having a strong financial plan with SMART goals you can make accurate future decisions, meet financial obligations, and mitigate risks.
This applies to all kinds of businesses either you are planning to launch an e-commerce development platform or a fintech application, all of these businesses become easier if you have a detailed financial plan of action. Moreover, financial plans act as a guide for businesses to set realistic goals and proactive decision making for achieving profits and financial stability. Below are some reasons why financial planning is significant:
- It helps companies to manage income to understand the average amount you would be needing for tax payments and daily expenditures.
- Balances cash flow by evaluating spending behaviors.
- Help balance your overall capital for financial security.
- Savings to meet sudden changes in financial infrastructures.
- Keep track of your liabilities and assets.
- Helps in calculating potential profits and losses.
- Gives you complete control over your finances.
Since 2010 USD 50b has been invest in fintech companies in the US alone. Most of these companies are providing efficient financial planning services to clients. Automated Financial planning solutions are consider more comprehensive as compared to traditional methods. Having said that, fintech development is reshaping the future of financial planning precisely. Surprisingly over 300 fintech startups were reported in Brazil in the year 2015, that were not only directed towards businesses but also financial advisors for improving client relationships. Many global industries are embracing emerging technologies for improved experience and financial planning processes to eliminate uncertainties and threats whatsoever. Due to a sudden need, fintech software development services are developing AI-base customer fintech solutions to transform financial departments.