Financial Planning and Control: A Key to Management Efficiency

Financial Planning and Control: A Key to Management Efficiency

A Case Study of Nigeria Breweries Ninth Mile Corner Enugu

ABSTRACT

The reasons for the study emanated from the fact that poor financial control system has always been an impediment to the growth of some business organizations. They have always faced the problem of poor cash and material control systems, which this study has addressed itself to. The problem of how stocks and cash should be held to have a healthy financial environment and operations and the maintenance of efficient inventory management in some organizations.

The problem of stock management revolves around the determination of the optional stock levels. Besides, efficiency financial control measures and staff efficiency, which this work will address, count to the problems faced by some organizations like a brewery. I have to make some useful suggestions and recommendations based on that which the company and other similar organizations will adopt to achieve results.

This study will guide scholars, researchers or writers who may wish to carry out further study on the company’s financial management. This study focuses on the examination of the existing financial control system in the Brewery and also investigates the present system of cost control and material management as indicated above.

CHAPTER ONE

INTRODUCTION

In fact, this word is so dynamic in nature, and change is the only thing that is permanent on earth. Therefore, people have to put in adequate financial planning and control in other to withstand the challenges of the future. A business cannot be a statistic. It has already been noted that business has to be changing, which requires an adequate balance and cash flow to go forward or backwards but not stagnate. Thus, there must be adequate financial resources for the business to expand.

More so, no business can grow unless proper accounting, marketing, personal, financial and so on are fully staffed with good-spirited individuals. The efficiency and effectiveness of any organization, be it a small, medium or large scale enterprise, depends on its finance, planning, control, and management financial planning and control, therefore, enables a firm to monitor its financial environment, including attitudes of investors so that it can optimize the benefit of planning from the environment. Systematic and adequate planning will therefore ensure the availability of the amount desired of the business time.

It may be very pertinent to note that financial capital is the major resource of any organization. The financial manager’s functions are as follows:

• Raising funds to finance projects.
• Employment of their funds in liable projects.
• Management of the cash flow arising from more projects.
• Return of funds to their funding.

In a nutshell, the duty of a financial manager is to implement the acquisition, allocation and management of these resources. Moreover, planning and control are the essence of project planning and act as a device that enables management to anticipate and adapt to change. No business can thrive without some terms of this outstanding twin concept, and success in business is proportional to its planning and the skill with which it is controlled. Accounting to Lemka and Edward (1977), “financial planning and control can therefore be said to be said to be the name given to a system which is being used to increase overall management efficiency”. It is concerned with planning for the allocation of resources to assist in achieving the objectives of efficiency of both large and small-scale organizations.

Also, with reference to Compsey and Brigham (1985), “financial management involves planning for, acquiring and utilizing funds in a way that minimizes the efficiency and value of the firm”. Therefore, the Enugu State Agricultural Development Program (ENADEP), being my case study, is not left out in the financial planning and control, which constitute the following:

• Cash management
• Project execution
• Effective costing and control of all inputs used by the Agriculture Extension Agent.
• Acquiring necessary items for official use to ensure improved performance of the organization.

Furthermore, as the term Agriculture implies the cultivation of crops for food to man and animal, rearing of animal and other livestock, and production of raw materials for our industries, ENADEP as an organization acts as an extension agent that creates out the step-by-step method of impacting on the farmers to cultivate good seeds on good land in other to have a bumper harvest. ENADEP also teaches farmers how to sell their crops to make a profit and store their crops to avoid the wastage of scarce resources using the available storage facilities. Thus, all this line of actions are archived using financial planning and control involves ensuring that there are always enough funds available to avoid default on the payment of debts.

Consequently, financial planning and control also entail the normal checks and balances carried out by management to ensure the security of assets to protect against theft, manipulation and fraud. Hence, from my reasoning, I deducted that financial planning is a process of protecting all foreseeable future events, verifying the consequences of present decisions, analyzing the intentions and interactions of the financing and investment choices open to the firms and understanding the link between the present and future decisions and thus, helps ENADEP as an organization to achieve and allocate resources in other to attain its objectives in a predetermined way fulfil its organizational policies.

The organization measures its efficiency through project implementation by utilizing budgeting as its main financial planning tool. With reference to ENADEP Newsletter Magazine (December 2008), captioned Rising prices of food items in the country and the need to Corp them, written by pat Chibuoke Onyia, he noted that the nation can feel secure in the faced of a threat of famine arising from serious food insecurity. Although Nigeria is still far from famine, the current food satiation is bad enough to give everyone some concern. Therefore, the government has to finance well, plan well and control well to inject money into agriculture and equally train the farmers using the Agriculture extension agents to improve food production in Nigeria and raise the standard of living of the farmers and masses at large.

It could be deduced that unless everybody joins hands to produce enough food, that is to say, all able-bodied young men and women, no matter or they’re status, should adopt a self-help method of “operation feed yourself” to sustain the vast population, the price of the product will just be so much high. The government’s good plan towards agriculture will run into a serious witch.

REFERENCES

Adeniyi, A.A. (2004). An insight into management accounting. Lagos: Value Analysis Consult.

Ansar, M. (2009). How to measure the performance of a business from its financial statements, Sage Publications, London, 32-50.

Argpris, C. (1985). Human Problem with Budgeting, (2nded). London: Longman Publishers.

Battry, J. (1979). Accounting of Manager, (2nded). London: Pitman Publishers.

Beith, C. &Goldreich, M. (2000). Profit planning and strategic management, Journal of Finance 3:12-15.

Brealy, A & Myers, C. (1998). Fundamentals of corporate finance, Review of Financial Studies 13(4):1101-1127.

Brigham, E. (1992). Fundamentals of financial management, Journal of Financial forecasting Research 15(1):37-55.

Brockington, R.B. (1987). Financial management. Great Britain: The Queonsary Press Co. Ltd.

Bryan, J; Locke, E.A. (1967). Goal setting as a means of increasing motivation, Journal of applied psychology 274-277.

Cadwell, N.A (1984). Principle of Accounting, (2nded). USA: Houghten Malling Company.

Chandra, P. (2007). Primes and Scores: An essay on market imperfection, Journal of Finance 44:1263-1287.

David J.C. (1988). Management and Cost Accounting Second Edition: International Thomas Press London.

Davoren, J. (2009). Financial market analysis and security design, Journal of Economic Theory 65:1-42.

Dew R. & Gee K. (1973). Management Control Information. 2nd edition MacMillan London.

Ehrhardt, M. and Brigham, E. (2011). Financial management 13th edition, NewYork, Ronald Press.

Eisenhardt, M, K. (1989). Agency theory: An assessment and review. Academy of Management Review, 14:1-57.

Engler, C. (1995). Managerial Accounting First Edition. Mc-Hill Companies Inc; York.

Gitman, L. (1997). Welfare effects of financial planning in incomplete markets economies with several consumption goods, Journal of Economic Theory 65:43-78.

Helkroft, J.M. (1978). Planning and Budgeting Municipal, (7thed). London: Heinemann Publisher.

Hogsett, RN. (1981). Profit planning for small business, New York, Van Nostrand Reinhold Publishing Ltd.