One of the biggest mistakes financial professionals make is losing sight of big-picture financial planning best practices.

Business success is all about having an eye on the bigger picture. Sure, it’s important to stay on top of your everyday tasks. But without considering how everything interconnects, it’s easy to miss out on opportunities for growth.

That’s why we've put together these financial planning tips to help you supercharge your profits and achieve long-term success.

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What is big-picture financial planning?

Big-picture financial planning is a comprehensive way to handle a company's finances. It's like taking a step back and looking at the entirety of the business's financial state. In doing so, you’ll be better equipped to make predictions about future finances and revenue, and create a plan to reach long-term financial goals.

This kind of planning covers all the wider financial areas of a business, including things like:

  • Managing cash flow
  • Creating a budget
  • Investing wisely
  • Managing risks
  • Dealing with taxes

The goal is to make the most profit possible, cut down on costs, and make sure the business stays financially strong and continues to grow.

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Benefits of considering the bigger picture

Here are some more reasons why this type of financial planning is the way to go:

1. Better decision-making

With a deeper understanding of the business's finances, you’ll be in a better position to make choices that align with the company’s long-term financial objectives.

2. Efficiency gain

A well-thought-out financial plan helps to streamline financial procedures, cut waste, and boost productivity.

3. Better control over cash flow

Improved cash flow management is achieved by anticipating future cash requirements and revenues. In doing so, you can prepare for cash flow variations and make sure that the business always has enough cash on hand to pay its debts.

4. Reduced risks

Considering all the financial components of a company helps you detect and reduce potential risks and maintain the company's financial stability.

5. Profit growth

A well-designed financial plan will highlight potential areas of the company for cost reduction and revenue growth, which ultimately leads to higher profits.

6. Stronger financial stability

By planning for the long term, you can ensure that the company has the resources it needs to weather any economic storm and remain financially stable.

Big picture financial planning strategy - 10 steps - graphic image of upwards arrow trajectory

How to put a big-picture financial planning strategy in place

When done right, financial planning focuses on the big picture and considers more than just the company’s budget.

But how can you create a ‘big picture financial plan’ that increases revenue?

Here are 10 steps to help you do just that:

1. Start with a clear understanding of your company's current financial position, including revenue, expenses, debts, and assets.

2. Set clear financial goals, both short-term and long-term, for your company and develop a plan to achieve them.

3. Forecast future cash flow needs and revenue to help make informed decisions about investments, expenses, and risk management.

4. Create a budget that considers all the major expenses of your business, such as salaries, rent, utilities, and marketing.

5. Make sure you have a robust risk management plan designed to minimize the impact of financial risks on your business.

6. Take notice of the tax implications of your financial decisions. And, plan accordingly to minimize your tax burden and maximize profits.

7. Take advantage of technology to automate financial processes and improve efficiency.

8. Regularly review and update your financial plan to keep pace with your business's and the economy's changes.

9. Keep up with the latest financial trends and best practices. You also need to be willing to adapt your plan as needed.

10. Finally, be proactive about seeking out opportunities to improve profits, whether it's through expanding your product offerings, diversifying your revenue streams, or finding new markets to enter.

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FAQs: Common questions about financial planning

Q. What is the purpose of big-picture financial planning for organizations?

A. The goal is to keep the organization's finances healthy by setting and reaching financial targets, using resources wisely, and reducing financial risks.

Q. How do we set financial goals?

A. Financial goals should match the organization's overall strategy and be specific, measurable, achievable, relevant, and have a timeline (SMART).

Q. How do we manage our budget and forecast future financial performance?

A. Budgeting and forecasting should be based on past data and realistic assumptions, considering any changes in the market, economy, and organization's operations.

Q. How do we manage financial risk?

A. Financial risk can be reduced through diversification, insurance, and close monitoring of financial metrics and market trends.

Q. What investment strategies are best for organizations?

A. Investment strategies should depend on the organization's goals, risk tolerance, and current financial situation. Options include stocks, bonds, real estate, and alternative investments.

Q. How do we plan for taxes?

A. Tax planning means estimating the organization's tax bill, taking advantage of deductions and credits, and staying up to date on tax law changes.

If you have more questions about big-picture financial planning, you can ask as many as you like inside our free Finance Slack community. There, you can network and discuss topics with hundreds of other CFOs and finance professionals.