Creating a planning calculation or an (additional) annual budget takes time and thought. But these are well invested: Because it enables you and your company to safeguard yourself for the present and at the same time make future-oriented decisions and actions.
How does an (additional) annual budget make you fit for the future?
The experience of recent years – if you remember the uncertainties caused by the pandemic, geopolitical changes and difficulties, massively increased energy prices and global supply chain problems – shows how important planning calculations are. Every single company was affected by this, and the success of a large number of them was even severely impaired. But technological developments and digitalisation also changed a lot in the business world.
Those who have considered, thought about and evaluated the individual scenarios and their probability of occurrence in advance can act in a more targeted and swifter manner. Uncertainty is replaced by knowledge of possible business developments depending on the facts and criteria.
How does the budget benefit my financing?
You know the drill: banks need figures, confidence and collateral. That's why the first thing they require from loan applicants is a budget and financial plan, so that they can see that the management is acting in a sound and considered manner. With your budget, you can get the financing in place more quickly!
What other specific benefits does good planning bring?
It is the basis for the internal control system (ICS). Its minimum requirement in accordance with § 22 GmbHG consists of a planning calculation including a monthly target/actual comparison – and this makes sense, as it supports and ensures that the company is structurally protected in the best possible way:
- Securing the existing assets
- Ensuring accurate and timely preparation of the accounts
- Internal enforcement of business policy
- Efficient organisation of operational processes
- Supporting risk management with the dual control principle and segregation of duties
- Fulfilment of the management's duty of care
- Legal security
Created: 29/01/2024
Photo credit: Nataliya Vaitkevich