Strategic planning vs financial planning

Financial Planning:

Financial planning is the process of meeting your life goals through proper management of your finances. Life goals can include buying a home or a car, saving for your child's education or planning for retirement. Financial planning can be understood as a process of allocating individual financial resources to meet the priorities in life. The process involves collecting pertinent financial data, setting goals (short-term, medium-term and long-term), calculating the present financial status.

All this information helps to plan a strategy to meet the desired goals in the given financial situation and in the best possible way. Small plans are designed keeping in mind the long-term future plans. As we all know, Failing to plan is planning to fail. Financial planning, thus, is a necessity today. The balanced plan prepared by financial advisors takes into consideration the risk profile and present lifestyle of the individual. Small plans for the future give you big returns. Thus, financial planners should also possess technical skills or some practical knowledge in various disciplines such as taxation, accounting, investment, pensions, estate planning, etc.

The traditional goals of Financial Planning Process are:

Measure current performance

Compare the organization's position against past organizational data and local, regional and national benchmarks

Make financial projections

Outline the organization's financial requirements

Integrate the financial process with the strategic planning process

Strategic Planning:

Strategic planning is mainly designed to deal with three elements of an organization like "What do we do?,"For whom do we do it?" and "How do we excel?" Strategic planning Framework determines the organization needs in the perspective of future. Vision, Mission and Values are part of a strategic planning Framework. Framework is designed by both people and organizations for significant success.

This framework consists of:

A vision for your future,

A mission that defines what you are doing, values that shape your actions, strategies that zero in on your key success approaches, and Goals and action plans to guide your daily, weekly and monthly actions. The Strategic planning process involves certain topics and action steps. However, the process does not always be in one flow of direction. If any issues occurs in the middle one step may require to go back to the first step of the process .You can change the order of the steps to suit the particular needs of the planning team. The implementation phase also does not end the planning process. It is better reviewing the strategic directions for an effective implementation of strategic plan to reach the expectations.

Strategic planning process includes below steps:

Mission and Objectives

Environmental Scanning

Strategy Formulation

Strategy Implementation

Evaluation and Control

The traditional role of strategic and financial planning process is as follows:

The traditional goals of Strategic Planning Process are:

Develop and implement a strategic plan that supports the organization's mission, vision and values

Create organizational and business unit plans

Identify and evaluate new business opportunities

Provide training and education related to planning

Perform market assessments and forecasts

Reconcile the plan with capital and operational budgets, as well as with human resource and facility planning

Monitor plan implementation and measure results

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