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In addition, the purchasing strategy should specify if approval is needed by a manager or board for purchases over a certain amount.If the business is not properly managing its own receivable, it can be devastating to the financial health of the business.
It will also specify late fees and if deposits are due before products and services are delivered for new customers.
Although a specific investment strategy may not be able to be detailed in a written plan, general guidance should be given to management.
While some specifics, such as approval authorities can be outlined, it will be difficult to account for every possible financial scenario that may arise in the business.
However, the financial strategy should be enough of a guideline to direct the basic staff of the business in conducting the financial aspects of the business from paying for purchases to making payroll.
Having a line of credit or business loan strategy is also necessary for many business models.
A contractor for example might secure a large bid and need to access the cash quickly for overhead.
Identifying any patterns in your sales cycles will help you better understand your business as well as plan out marketing initiatives and growth strategies.
A seasonal business can aim to improve sales in the former offseason to become a year-round venture, while another business might become better prepared by understanding correlation in upticks and downturns in business due to factors such as the weather or economy.
For new businesses, these financial statements will be projections, whereas for an existing the business the section will contain several years of history as well as projections.
In addition to statements, the plan should include the financial strategies of the business in how finances will be handled.