Failure to have a financial plan will always result in the organization being unable to meet its expenses whenever they arise (Berry, Jarvis, and Jarvis, 2005, p. 28).
The success of any financial plan will largely depend on the effective disseminate of information to various decision makers within the organization. This is because it will ensure support and compliance among different stakeholders of the organization. It will also facilitate faster decision making which will ensure maximum utilization of business opportunities. Some of the key decision makers include:
The CEO: he/she is responsible for the overall performance of the organization. The most important information for the CEO is the budget forecasts and financial statements. This information serves the purpose of providing information related to organizational needs and the overall performance of the business.
The CFO: responsible for the allocation of the organization financial resources. The most important information for the CFO is the budget estimates because they present the financial needs of the organization.
Other Employees: they are responsible for the running of daily activities within the company. The most important information is the company strategic plan which will guide their actions to ensure that the organization achieves its goals.
The first option is the best among the three because the business will manage to get financing at no extra cost. The second and third options are not attractive because they result in payment of interest and issuance of stock respectively.
Faulty arithmetic in the budget figures: the errors include the errors of commission or duplication of financial figures. For instance, £ 22,500 may have been duplicated on either materials or direct labor.
The occurrence of reality: this is possible especially when there is an occurrence of an event that