Financial strategy is the most important tool in thesphere of management of enterprise activity for achievement of the put purposes. It becomes especially urgent in conditions of unstable macroeconomic situation and volatile financial market conditions.
The strategy and tactics of financial management canbe general and operational. Proceeding from this, the general strategy can be formed not earlier than for 3-5 years. During this time, the relationship with the budget is established, the formation of the sources of the enterprise's income, as well as the ways of forming financial resources, is determined. The operational strategy is created within one year and includes detailed information on incomes and expenditures that relate to a particular current period of the enterprise's activity.
The strategy is a non-detailed, general plan that deals with a certain type of activity.
Such a complex concept as financial betting,strategies and other basic concepts of effective management will help create an integrated structure for managing the enterprise and reduce costs to a minimum, while increasing operating profit. Based on the existing system, a financial policy is formed in the most basic areas for a particular enterprise.
An effective financial strategy can provide the following:
- Formation and preparation of strategic reserves.
- Full compliance with the company's material capabilities to conduct operations that are planned.
- Finding the most effective way to concentrate available financial resources and directions for investment.
In the course of work on creating a strategy, moreattention should be given to the formation of a competitive policy of production and sale of products, the effective distribution of income and profits, as well as the mobilization of the created internal reserves.
It should be noted that earlier the term "strategy" wasis distributed only in military subjects, but recently it has found application in the sphere of business. Professor G. Kleiner argues that a strategic decision is a decision that has a strong influence on the final result of a particular activity.
The financial strategy underlies the effective operation of the company, because it is a kind of framework, which builds basic tasks and solutions to specific issues.
The company's development strategy can be defined in three different ways.
The first way. The strategy is built on the basis of analysis and structuring of the whole field of activity.
The second way. Defining a strategy based on the synthesis of known activity plans from individual interrelated solutions that relate to different areas of the company's activities.
The third way. It can be preceded as mixed, because it combines the principles of the two previous versions in different proportions.
It is worth noting that the merit of the first approachis the priority position of the financial strategy as a link between the set goals, mission and objectives. The second approach has a strong side in that there is a closer relationship between the strategy and the management policy of the enterprise.
Correct financial strategy of the enterprisewill help to avoid a lot of problems in the future activity of the enterprise, and maybe even bankruptcy, because the most important thing in doing business is to correctly calculate your strengths and be as confident as possible in achieving a particular result. Quite a lot of modern companies can help a beginning businessman with drawing up of the correct and thought-out way of development.