3:I[5613,[],""]
5:I[1778,[],""]
4:["slug","financial-planning-process-explained","d"]
0:["rnBdUNPWTD1c-_x1hScPE",[[["",{"children":["resources",{"children":["financial-forecast",{"children":[["slug","financial-planning-process-explained","d"],{"children":["__PAGE__?{\"slug\":\"financial-planning-process-explained\"}",{}]}]}]}]},"$undefined","$undefined",true],["",{"children":["resources",{"children":["financial-forecast",{"children":[["slug","financial-planning-process-explained","d"],{"children":["__PAGE__",{},["$L1","$L2",null]]},["$","$L3",null,{"parallelRouterKey":"children","segmentPath":["children","resources","children","financial-forecast","children","$4","children"],"loading":"$undefined","loadingStyles":"$undefined","loadingScripts":"$undefined","hasLoading":false,"error":"$undefined","errorStyles":"$undefined","errorScripts":"$undefined","template":["$","$L5",null,{}],"templateStyles":"$undefined","templateScripts":"$undefined","notFound":"$undefined","notFoundStyles":"$undefined","styles":[["$","link","0",{"rel":"stylesheet","href":"/_next/static/css/b29c6c1d4813d5b8.css","precedence":"next","crossOrigin":""}]]}]]},["$","$L3",null,{"parallelRouterKey":"children","segmentPath":["children","resources","children","financial-forecast","children"],"loading":"$undefined","loadingStyles":"$undefined","loadingScripts":"$undefined","hasLoading":false,"error":"$undefined","errorStyles":"$undefined","errorScripts":"$undefined","template":["$","$L5",null,{}],"templateStyles":"$undefined","templateScripts":"$undefined","notFound":"$undefined","notFoundStyles":"$undefined","styles":null}]]},["$","$L3",null,{"parallelRouterKey":"children","segmentPath":["children","resources","children"],"loading":"$undefined","loadingStyles":"$undefined","loadingScripts":"$undefined","hasLoading":false,"error":"$undefined","errorStyles":"$undefined","errorScripts":"$undefined","template":["$","$L5",null,{}],"templateStyles":"$undefined","templateScripts":"$undefined","notFound":"$undefined","notFoundStyles":"$undefined","styles":null}]]},[null,["$","html",null,{"lang":"en","children":[["$","head",null,{"children":[["$","meta",null,{"name":"robots","content":"index, follow, max-image-preview:large, max-snippet:-1, max-video-preview:-1"}],["$","link",null,{"rel":"icon","href":"/images/website-icon.svg"}]]}],["$","body",null,{"itemScope":true,"itemType":"https://schema.org/SoftwareApplication","className":"a1","children":[["$","meta",null,{"itemProp":"applicationCategory","content":"Business Planning Service"}],["$","$L3",null,{"parallelRouterKey":"children","segmentPath":["children"],"loading":"$undefined","loadingStyles":"$undefined","loadingScripts":"$undefined","hasLoading":false,"error":"$undefined","errorStyles":"$undefined","errorScripts":"$undefined","template":["$","$L5",null,{}],"templateStyles":"$undefined","templateScripts":"$undefined","notFound":"$L6","notFoundStyles":[],"styles":null}]]}]]}],null]],[[["$","link","0",{"rel":"stylesheet","href":"/_next/static/css/080fc4158a8a5598.css","precedence":"next","crossOrigin":""}]],"$L7"]]]]
6:E{"digest":"NEXT_REDIRECT;replace;/;307;"}
8:I[4699,["6081","static/chunks/6081-024259f4f6c69551.js?v1744903397511","3842","static/chunks/3842-43e6e4a5599f06c7.js?v1744903397511","6142","static/chunks/6142-d53122bf85c101bf.js?v1744903397511","4181","static/chunks/app/resources/financial-forecast/%5Bslug%5D/page-f7dccd0e5de8435a.js?v1744903397511"],""]
9:T86a2,{"id":"cG9zdDo4NDcx","title":"The Financial Planning Process Explained","content":"\n<h2 class=\"wp-block-heading\">The financial planning process</h2>\n\n\n\n<p>Are you wondering how to do the financial planning process right? Creating a financial plan for your business sounds complicated if you have never done one before, but it is really not that difficult with the right tools and guidance. You can have a professional financial plan done within a day.</p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a financial plan?</h2>\n\n\n\n<p>A financial plan is a forecast of the future financial performance of a business, meaning forecasted Profit and Loss Statement, Balance Sheet and a Cashflow Statement. </p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Profit and loss (P&amp;L) statement</strong>, also known as an income statement, summarizes the revenues, costs, expenses, and profits/losses of a company during a specified period. These records provide information about a company’s ability to generate revenues, manage costs, and make profits.</li>\n\n\n\n<li><strong>Balance sheet</strong> informs us about a company&#8217;s assets, liabilities, and equity at a specific point in time. In other words, the balance sheet provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.</li>\n\n\n\n<li><strong>Cash flow statement</strong> provides information about all cash inflows that a company receives from its operations and external investment sources. It also includes all cash outflows that pay for business activities and investments during a given period. </li>\n</ul>\n\n\n\n<h2 class=\"wp-block-heading\">Why do you need a financial plan?<strong> </strong></h2>\n\n\n\n<p>Businesses that plan grow 30% faster than those that don’t. But why? A financial plan used to better manage your business, raise funding, set goals, and guide strategic, operational and investment decisions. A well-done financial plan makes you think through every aspect of your business and find ways to improve it.</p>\n\n\n\n<p>I will now go into detail explaining the financial planning process. If you rather watch than read, here is a video explaining it.&nbsp;</p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Unveiling the Secrets of Financial Planning Process | Modeliks Academy L.1\" width=\"640\" height=\"360\" src=\"https://www.youtube.com/embed/KgqrVLEYMOo?list=PLJhNEF4wOLMBsz6fKVpvRCnZUQoICEG6C\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen></iframe>\n</div></figure>\n\n\n\n<h2 class=\"wp-block-heading\">The financial planning process</h2>\n\n\n\n<p>There are 4 steps in the financial planning process: </p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Identify the purpose of your financial plan. </li>\n\n\n\n<li>Define the plan structure, assumptions and gather data.</li>\n\n\n\n<li>Build the financial model.</li>\n\n\n\n<li>Sense-check your financial plan.</li>\n</ol>\n\n\n\n<h3 class=\"wp-block-heading\">Step 1: Identify the purpose of your financial plan.</h3>\n\n\n\n<p>The purpose for creating your plan will define the required complexity and detail for your plan. For example, if you need a plan to apply for a bank loan, you will need a simpler financial plan. You will need high level financial statement projections, sense checks against historical performance and with healthy ratios that banks care about.&nbsp;</p>\n\n\n\n<p>On the other hand, if you need a financial plan to raise VC funding, you will need a more detailed, high growth, <a href=\"https://www.modeliks.com/resources/financial-forecast/driver-based-financial-plan\">driver-based financial model</a>. It will need to be sense checked against industry benchmarks and clearly presented to tell a story of an excellent investment opportunity. </p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 2: Define the plan structure, assumptions and gather data</h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Financial model structure. </strong>\n<ul class=\"wp-block-list\">\n<li>Define the revenues your business generates. This is the income from the different products or services your business sells. </li>\n\n\n\n<li>Direct costs or cost of goods sold. These are the cost of the products and services you sell. If you sell bikes, these are your costs to purchase or manufacture the bikes.  </li>\n\n\n\n<li>Employees do you need to run the business.  Sales, marketing, manufacturing, R&amp;D, office support, etc.    </li>\n\n\n\n<li>Operating expenses. Things like rent, utilities, insurance, sales and marketing budgets, travel, office supplies, repairs, accounting and legal, bank charges, etc.</li>\n\n\n\n<li>Assets. These are the property, equipment, furniture, vehicles, intangible assets that you need to run your business.</li>\n\n\n\n<li>Financing. What are the sources of financing your business? Equity investment from the founders or investors, bank loans, etc.</li>\n\n\n\n<li>Taxes. Which taxes do you need to pay? VAT, Sales tax, GST, Income tax, etc. <br></li>\n</ul>\n</li>\n\n\n\n<li><strong>Assumptions</strong>. How will you calculate the revenues, cost of goods sold, employee costs, operating expenses, taxes you identified when defining the financial model structure. Assumptions will include thing like number of units sold and prices for revenue calculations. Cost per unit for COGS. Number of employees needed per type of employee and their gross salaries, inflation rates, tax rates, capacity constraints, conversion rates, cost per lead, accounts payable and receivable days, inventory turnover, etc. Most of the assumptions should be operational metrics of your business so that you can establish a logical relationship between how your business operates and the expected financial result from those operations.  <br></li>\n\n\n\n<li><strong>Gathering data</strong>. Once you defined the assumptions that you will use to calculate your revenues, costs, expenses, taxes, assets, financing needs, etc., you need to gather data in order to define the values of each assumption. How many units will you sell? At which price? How much will each unit cost you to procure? How much will you pay to each employee? How much will you pay for rent, utilities, office expenses? How much will it cost you to acquire a new customer?<br><br>Always the best place to start with gathering data is your company historical performance. If you have historical data, you will have reliable basis for your assumptions of your future performance. You will then tweak your past performance data based on expected growth and initiatives that you plan to implement in the future. </li>\n</ul>\n\n\n\n<p>It is more difficult for new companies to define the values of their assumptions because they do not have past performance data. So, for new companies, benchmarks from similar companies, also known as industry benchmarks, would be a good place to start and tweak those benchmarks based on your specific situation. If your assumptions are in line with industry benchmarks, it is fairly easy to defend them. If they defer significantly from industry benchmarks, you should have a good and logical explanation why this is the case. </p>\n\n\n\n<p>Whether you use past company performance data, industry benchmarks or a combination of both, the values of your assumptions need to be logical and defendable.&nbsp;</p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 3: Build the financial model</h3>\n\n\n\n<p>The financial model are all the formulas and calculations that calculate your Revenues, Cost of Goods Sold, Employee Costs, Operating expenses, Taxes, Assets and Financing Needs based on the assumptions. And then calculating the main outputs for the financial plan: Profit and Loss Statement, Balance Sheet and Cashflow Statement.&nbsp;</p>\n\n\n\n<p>This is by far the most difficult and time-consuming step in creating a financial plan. If you are not an expert in excel and financial planning, you might struggle with this step. Luckily, there are softwares like Modeliks that does these calculations for you, so you can have a professional financial plan even if you have never done one before in your life. What’s even more important, specialized financial planning software ensures that your calculations are correct, while building a financial plan in excel is very prone to errors.&nbsp;</p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 4: Sense-check your financial plan outputs</h3>\n\n\n\n<p>You have come to the end. You defined your financial plan structure, gathered data from reliable sources and created your financial plan (i.e. your forecasted Profit and Loss, Balance Sheet and Cashflow Statement). Now you need to step back and see if your numbers make sense. Just one mistake in assumption can make your whole financial plan unrealistic and unreliable.&nbsp;</p>\n\n\n\n<p>To sense check your financial plan, make sure the following indicators make sense when you compare them to your past performance or industry benchmarks.&nbsp;</p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Revenue growth rate. How fast is your revenue growing year on year. 10% might be realistic for an established company, but 100% probably not. For a startup with low revenue base which is gaining traction 1000% growth in revenue might make sense. Make sure you can explain the revenue growth rate, whatever it is. </li>\n\n\n\n<li>Gross margin. This is Gross Profit divided by Revenue. For a restaurant 70% gross margin makes sense. For a supermarket, 25% is more realistic. </li>\n\n\n\n<li>EBITDA margin. Hotels can have a 60% EBITDA margin. Wholesale businesses, probably less than 15%. </li>\n</ol>\n\n\n\n<p>Every business will have a few additional key numbers that you need to sense check. For SaaS businesses, sense-check customer acquisition costs and churn rates. Regarding hotels check occupancy rate assumptions and average room rates. For manufacturing businesses cost of materials, etc.  Sense-check the assumptions that have the highest impact on your business results for your type of business. </p>\n\n\n\n<h2 class=\"wp-block-heading\">Final thoughts on the financial planning process</h2>\n\n\n\n<p>Financial planning can seem complex and scary if you have never done it before. But with the <a href=\"https://www.modeliks.com/features/financial-planning-software\">right tools</a>, anyone can create a professional financial plan. </p>\n\n\n\n<p>Whether you are a startup or an established and successful business, a financial plan will help you think through every aspect of your business and find ways to improve it. It will help manage your business better by setting clear targets for everyone in the company and tracking performance against those targets. It will help you make informed decisions and evaluate new initiatives. And it will help you raise funds, if you need them.&nbsp;&nbsp;</p>\n\n\n\n<p>If you need a financial plan, check out <a href=\"https://modeliks.com/\">Modeliks</a>, a financial planning a performance tracking software for SMEs and startups. </p>\n\n\n\n<p>Author:<br><a href=\"https://www.linkedin.com/in/blagojahamamdziev/\">Blagoja Hamamdjiev</a>, Founder and CEO of <a href=\"https://www.modeliks.com/\" target=\"_blank\" rel=\"noreferrer noopener\">Modeliks</a>, Entrepreneur, and business planning expert.</p>\n\n\n\n<p><em>In the last 20 years, he helped everything from startups to multi-billion-dollar conglomerates plan, manage, fundraise, and grow.</em></p>\n","slug":"financial-planning-process-explained","date":"2025-01-24T09:50:31","categories":{"nodes":[{"id":"dGVybToxNA==","name":"Financial Forecast"},{"id":"dGVybToxMw==","name":"Reports & Dashboards"}]},"mainCategory":{"mainCategory":["financial-forecast"],"videoHeader":null},"tags":{"nodes":[{"name":"business planning"},{"name":"financial modeling"},{"name":"financial planning"},{"name":"financial reporting"},{"name":"small business"},{"name":"startups"}]},"featuredImage":{"node":{"id":"cG9zdDo4NDcy","sourceUrl":"/images/cms/getty-images-EUykNk8-9yo-unsplash.jpg","altText":"financial planning process"}},"seo":{"metaDesc":"Are you in need of an explanation on how the Financial Planning Process works? How to do it? Look no further."},"modified":"2025-01-24T09:50:38","related":[{"id":"cG9zdDoxMDQyMA==","title":"Modeliks 2.0 is Live!","content":"\n<p>Today we released a massive new update of Modeliks.  A multidimensional Modeliks 2.0. I am both happy and sad to see Modeliks grow up. I liked baby Modeliks. He was cute and a little clumsy. Now, we created a beast.  </p>\n\n\n\n<p>We listened to your feedback and made Modeliks by far the best financial planning and reporting tool for SMEs. Alright, I might be a bit subjective, but here is what’s new:</p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Multi dimensional planning and reporting</strong>. This means that you can plan and track performance by organizational unit, whether that is business units, departments, geography, stores, projects. However your company is structured, you can have clear targets and track performance across your whole organization.</li>\n\n\n\n<li><strong>Consolidation</strong>: if you plan on a business unit level, Modeliks will consolidate your financial plans upwords.</li>\n\n\n\n<li><strong>Allocations</strong>: allocate costs from the head office down to the operating units. Why? Some costs are incurred in the head office, or regional offices, but should be allocated down to the operating units, in order to get a correct picture of profitability across the organization.</li>\n\n\n\n<li><strong>Quickbooks integration</strong>. Connect Modeliks to your Quickbooks and have your planning and monthly reporting automated, error free and done in minutes.</li>\n\n\n\n<li><strong>Account grouping</strong>. Group several accounts into one group account. For example, you can create a Utilities group account and make your Energy, heating, phone, internet, water accounts part of the utilities group. Why? Because when you plan, you don’t want to plan on every single small account that you have in your accounting system. It is too tedious and messy. So, group them logically, plan on groups, and make planning and reporting easy and useful.</li>\n\n\n\n<li><strong>Initiative planning and evaluation</strong>. You have a new initiative in mind for your business? Create a business case and see how it will impact your business. If the numbers say it’s good, keep it. If not, drop it.  </li>\n\n\n\n<li><strong>Monthly forecasting</strong>. Now you can forecast up to 3 years on monthly basis.</li>\n\n\n\n<li>Lastly. <strong>Speed</strong>. Modeliks is now 10 times faster than before.   </li>\n</ol>\n\n\n\n<p>And there is a lot more to come in the next few months. Stay tuned for new features, and in the mean-time, plan, manage and grow your business with Modeliks 2.0.</p>\n\n\n\n<p>Let’s recap. Now you can:</p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Build driver based financial models for any business</li>\n\n\n\n<li>Do it by department, business unit, geography, stores, projects</li>\n\n\n\n<li>Run scenarios and evaluate new initiatives</li>\n\n\n\n<li>Track actual performance vs budget, on every level in your organization. Especially easy with the Quickbooks integration</li>\n\n\n\n<li>Automate monthly investor and management reporting</li>\n\n\n\n<li>And write professional and detailed business plans with the help of our AI assistant.</li>\n</ol>\n\n\n\n<p>Enjoy <a href=\"https://modeliks.com/\">Modeliks</a> 2.0! We know we are!</p>\n\n\n\n<p>Author: <br><a href=\"https://www.modeliks.com/about-us\">Modeliks Team</a></p>\n","slug":"modeliks-2-0-a-live","date":"2025-04-01T08:59:31","categories":{"nodes":[{"id":"dGVybToxMQ==","name":"Business Plans"},{"id":"dGVybToxNA==","name":"Financial Forecast"},{"id":"dGVybTozNQ==","name":"News"},{"id":"dGVybTozNA==","name":"Partners"},{"id":"dGVybToxMg==","name":"Pitch Decks"},{"id":"dGVybToxMw==","name":"Reports & Dashboards"}]},"mainCategory":{"mainCategory":["financial-forecast"],"videoHeader":"https://www.youtube.com/watch?v=-61deO4BkFg"},"tags":{"nodes":[{"name":"budgeting and forecasting"},{"name":"business planning"},{"name":"Financial analysis"},{"name":"financial forecasting"},{"name":"financial modeling"},{"name":"financial planning"},{"name":"financial reporting"},{"name":"market analysis"},{"name":"modeliks"},{"name":"quickbooks"}]},"featuredImage":{"node":{"id":"cG9zdDoxMDQyMg==","sourceUrl":"/images/cms/Modeliks-2.0-Post-image.png","altText":"Modeliks 2.0."}},"seo":{"metaDesc":"A massive new update of Modeliks is here. A multidimensional, Quickbooks integrated, faster than ever Modeliks 2.0. GROW your business, NOW!"},"modified":"2025-04-01T09:20:31","related":null},{"id":"cG9zdDoxMDQxNQ==","title":"What is a Variance Report?","content":"\n<h2 class=\"wp-block-heading\">What is a Variance Report?</h2>\n\n\n\n<p>A variance report is a financial document that compares actual performance against planned or budgeted figures. It highlights differences (variances) between expected and actual results, helping businesses identify areas where they are overperforming or underperforming. These reports are commonly used in financial management, project management, and operational planning.</p>\n\n\n\n<p>Variances in a report can be classified into:</p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong><a href=\"https://gocardless.com/en-us/guides/posts/favorable-vs-unfavorable-variance/#:~:text=Favorable%20variance%20is%20a%20difference,a%20favorable%20variance%20of%20%2425%2C000.\">Favorable Variances</a>:</strong> When actual performance exceeds expectations (e.g., higher revenue, lower costs).</li>\n\n\n\n<li><strong><a href=\"https://www.investopedia.com/terms/u/unfavorable-variance.asp#:~:text=Key%20Takeaways-,Unfavorable%20variance%20is%20an%20accounting%20term%20that%20describes%20instances%20where,will%20be%20less%20than%20expected.\">Unfavorable Variances</a>:</strong> When actual performance falls short of expectations (e.g., higher costs, lower revenue).</li>\n</ol>\n\n\n\n<p>A variance report is a crucial tool for analyzing financial performance, improving budgeting accuracy, and making strategic decisions.</p>\n\n\n\n<h2 class=\"wp-block-heading\">Why is a Variance Report Important for Every Business?</h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Enhances Budget Control</strong></h3>\n\n\n\n<p>Variance reports allow businesses to track deviations from their budget, helping them stay on top of their financial plans and prevent overspending.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Supports Strategic Decision-Making</strong></h3>\n\n\n\n<p>By analyzing variances, businesses can make informed adjustments to their financial strategies, resource allocations, and operational processes.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Identifies Operational Inefficiencies</strong></h3>\n\n\n\n<p>Significant variances can signal inefficiencies in production, procurement, or sales, prompting businesses to investigate and optimize their operations.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Improves Financial Forecasting</strong></h3>\n\n\n\n<p>Historical variance reports help businesses refine their financial projections and make more accurate forecasts.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Strengthens Cost Management</strong></h3>\n\n\n\n<p>Businesses can identify cost overruns and take corrective action to control expenses and enhance profitability.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Boosts Performance Accountability</strong></h3>\n\n\n\n<p>By comparing actual results to expected outcomes, variance reports hold departments and individuals accountable for their financial and operational performance.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Aids in Risk Management</strong></h3>\n\n\n\n<p>Understanding financial and operational variances allows businesses to identify potential risks and implement preventive measures before they escalate.</p>\n\n\n\n<h2 class=\"wp-block-heading\">What Does a Variance Report Do for You?</h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Tracks Financial Performance</strong></h3>\n\n\n\n<p>A variance report provides a clear picture of a company’s financial health by comparing budgeted vs. actual results.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Helps in Cost Control</strong></h3>\n\n\n\n<p>It highlights unexpected expenses and cost overruns, allowing businesses to take corrective measures.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Identifies Revenue Trends</strong></h3>\n\n\n\n<p>By tracking sales variances, businesses can determine if revenue is growing as expected or if adjustments are needed.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Supports Business Planning</strong></h3>\n\n\n\n<p>Variance reports provide valuable data for future business planning and strategy adjustments.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Increases Accountability</strong></h3>\n\n\n\n<p>Departments and employees can be held accountable for meeting financial and operational targets.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Enhances Decision-Making</strong></h3>\n\n\n\n<p>Real-time variance analysis helps managers make quick, data-driven decisions to optimize performance.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&#8211; Provides Insight into Market and Economic Conditions</strong></h3>\n\n\n\n<p>Unforeseen variances can indicate changes in market trends, economic conditions, or customer behavior, allowing businesses to adapt accordingly.</p>\n\n\n\n<h2 class=\"wp-block-heading\">How to do it in Modeliks? </h2>\n\n\n\n<h3 class=\"wp-block-heading\">Plan</h3>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Build driver-based financial plans (the only right way to plan)</li>\n\n\n\n<li>Automated &amp; error free financial statement (P&amp;L, balance sheet, cashflow) plus KPIs</li>\n\n\n\n<li>By department, business unit, geography, stores, projects, etc.</li>\n\n\n\n<li>Run scenarios and evaluate new initiatives to mitigate risk</li>\n\n\n\n<li>Develop industry expertise with financial model templates by industry</li>\n</ol>\n\n\n\n<h3 class=\"wp-block-heading\">Manage your business</h3>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Set measurable targets (KPIs) across the organization</li>\n\n\n\n<li>Track actuals vs. plan &amp; past periods on every important KPI</li>\n\n\n\n<li>Connect to your accounting software for effortless planning and reporting</li>\n\n\n\n<li>Drive alignment and accountability across the organization, by department, business unit, geography, stores, projects, etc.</li>\n\n\n\n<li>Monthly investor and management reports in minutes</li>\n</ol>\n\n\n\n<h3 class=\"wp-block-heading\">Fundraise</h3>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Write professional business plans. AI powered, SBA and investor ready format, done in an hour.</li>\n\n\n\n<li>Create pitch decks that build investor confidence</li>\n</ol>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion</h2>\n\n\n\n<p>Variance reports are essential tools for financial analysis, cost control, and strategic decision-making. By regularly monitoring variances, businesses can improve their financial accuracy, enhance operational efficiency, and ensure sustainable growth. Whether used for budgeting, forecasting, or performance evaluation, variance reports help businesses stay competitive and financially stable.</p>\n\n\n\n<p>Make confident decisions with <a href=\"https://modeliks.com/\">Modeliks</a>. Plan, manage, fundraise and grow your business.</p>\n\n\n\n<p>Author: <br><a href=\"https://www.modeliks.com/about-us\">Modeliks Team</a></p>\n","slug":"what-is-a-variance-report","date":"2025-03-12T14:44:54","categories":{"nodes":[{"id":"dGVybToxMQ==","name":"Business Plans"},{"id":"dGVybToxNA==","name":"Financial Forecast"},{"id":"dGVybToxMw==","name":"Reports & Dashboards"}]},"mainCategory":{"mainCategory":["reports-and-dashboards"],"videoHeader":null},"tags":{"nodes":[{"name":"budgeting and forecasting"},{"name":"business planning"},{"name":"Financial analysis"},{"name":"financial forecasting"},{"name":"financial modeling"},{"name":"financial planning"},{"name":"financial reporting"},{"name":"market analysis"},{"name":"modeliks"},{"name":"small business"}]},"featuredImage":{"node":{"id":"cG9zdDoxMDQxNg==","sourceUrl":"/images/cms/getty-images-oZeh-EEj8mw-unsplash.jpg","altText":"Variance Report"}},"seo":{"metaDesc":"What is a Variance Report and why you need it? What should it include? How you can analize with Modeliks?"},"modified":"2025-03-12T14:44:58","related":null},{"id":"cG9zdDoxMDQxMg==","title":"Financial Accounting and Management Accounting | What is What?","content":"\n<h2 class=\"wp-block-heading\">What is Financial Accounting and Management Accounting?</h2>\n\n\n\n<p><a href=\"https://www.investopedia.com/terms/f/financialaccounting.asp\">Financial accounting</a> and <a href=\"https://www.zoho.com/books/guides/management-accounting.html#:~:text=What%20is%20management%20accounting%3F,primarily%20used%20for%20internal%20purposes.\">management accounting</a> are two essential branches of accounting that serve different purposes but are equally critical for business success.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Financial Accounting</strong></h3>\n\n\n\n<p>Financial accounting focuses on recording, summarizing, and reporting a company’s financial transactions over a specific period. It follows standardized accounting principles such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). The key objective of financial accounting is to provide external stakeholders, including investors, creditors, and regulators, with an accurate financial picture of the company through financial statements such as the income statement, balance sheet, and cash flow statement.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Management Accounting</strong></h3>\n\n\n\n<p>Management accounting, on the other hand, is designed to assist internal stakeholders—such as executives, managers, and department heads—in making informed business decisions. Unlike financial accounting, it is not regulated by external standards and focuses on providing customized reports, budgets, forecasts, and financial analysis to optimize operational efficiency and strategic planning.</p>\n\n\n\n<h2 class=\"wp-block-heading\">Why is it Important for Every Business?</h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Ensures Compliance and Transparency</strong></h3>\n\n\n\n<p>Financial accounting ensures businesses adhere to regulatory and tax compliance requirements by preparing standardized financial reports. This transparency builds trust with investors, banks, and government agencies.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Aids in Strategic Decision-Making</strong></h3>\n\n\n\n<p>Management accounting provides real-time financial insights and performance metrics that help businesses make data-driven decisions for growth and profitability.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Helps Secure Funding and Investments</strong></h3>\n\n\n\n<p>Accurate financial accounting reports are essential for attracting investors and securing loans, as they provide a clear picture of a company’s financial health and risk profile.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Improves Budgeting and Cost Control</strong></h3>\n\n\n\n<p>Management accounting plays a crucial role in setting budgets, monitoring expenses, and optimizing resource allocation, ensuring the business remains financially stable.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Facilitates Performance Evaluation</strong></h3>\n\n\n\n<p>Both financial and management accounting contribute to assessing business performance. While financial accounting evaluates overall profitability, management accounting focuses on department-wise and process-specific efficiency.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>6. Reduces Financial Risks</strong></h3>\n\n\n\n<p>Proper financial and management accounting practices identify potential financial risks and inefficiencies, helping businesses take corrective action before they become critical issues.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>7. Enhances Business Growth and Sustainability</strong></h3>\n\n\n\n<p>With accurate financial records and strategic insights, businesses can plan for expansion, manage cash flow effectively, and ensure long-term sustainability.</p>\n\n\n\n<h2 class=\"wp-block-heading\">What Does it Do for You?</h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Provides Accurate Financial Statements</strong></h3>\n\n\n\n<p>Financial accounting ensures businesses generate comprehensive financial reports, including income statements, balance sheets, and cash flow statements, which are crucial for external reporting and compliance.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Helps with Tax Planning and Compliance</strong></h3>\n\n\n\n<p>Businesses can avoid legal and financial penalties by maintaining proper records and ensuring compliance with tax laws through financial accounting practices.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Assists in Budgeting and Forecasting</strong></h3>\n\n\n\n<p>Management accounting enables businesses to create financial projections, set budgets, and track performance to ensure alignment with long-term goals.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Supports Profitability Analysis</strong></h3>\n\n\n\n<p>By analyzing product costs, revenue streams, and operational expenses, management accounting helps businesses maximize profitability.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Enhances Cash Flow Management</strong></h3>\n\n\n\n<p>Understanding cash inflows and outflows through financial and management accounting ensures businesses maintain liquidity and avoid financial distress.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>6. Provides Real-Time Decision Support</strong></h3>\n\n\n\n<p>Managers rely on financial insights from management accounting to make strategic decisions, such as pricing strategies, cost reduction plans, and investment opportunities.</p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>7. Improves Operational Efficiency</strong></h3>\n\n\n\n<p>Management accounting identifies inefficiencies and suggests improvements in processes, helping businesses operate more effectively and reduce waste.</p>\n\n\n\n<h2 class=\"wp-block-heading\">How to plan, manage &amp; fundraise in Modeliks?</h2>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"https://www.modeliks.com/features/financial-planning-software\">Plan</a></h3>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Build driver-based financial plans (the only right way to plan)</li>\n\n\n\n<li>Automated &amp; error free financial statement (P&amp;L, balance sheet, cashflow) plus KPIs</li>\n\n\n\n<li>By department, business unit, geography, stores, projects, etc.</li>\n\n\n\n<li>Run scenarios and evaluate new initiatives to mitigate risk</li>\n\n\n\n<li>Develop industry expertise with financial model templates by industry</li>\n</ol>\n\n\n\n<h3 class=\"wp-block-heading\">Manage your business</h3>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Set measurable targets (KPIs) across the organization</li>\n\n\n\n<li>Track actuals vs. plan &amp; past periods on every important KPI</li>\n\n\n\n<li>Connect to your accounting software for effortless planning and reporting</li>\n\n\n\n<li>Drive alignment and accountability across the organization, by department, business unit, geography, stores, projects, etc.</li>\n\n\n\n<li>Monthly investor and management reports in minutes</li>\n</ol>\n\n\n\n<h3 class=\"wp-block-heading\">Fundraise</h3>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Write professional business plans. AI powered, SBA and investor ready format, done in an hour.</li>\n\n\n\n<li>Create pitch decks that build investor confidence</li>\n</ol>\n\n\n\n<p>And right-after Q1 2025 QuickBooks Accounting Integrations is coming to Modeliks. Stay tuned.</p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion</h2>\n\n\n\n<p>Financial accounting and management accounting play vital roles in the success of a business. While financial accounting ensures compliance, transparency, and trustworthiness, management accounting provides valuable insights for internal decision-making, budgeting, and operational improvements. Together, they enable businesses to maintain financial health, achieve growth, and sustain long-term success.</p>\n\n\n\n<p>Make confident decisions with <a href=\"https://modeliks.com/\">Modeliks</a>. Plan, manage, fundraise and grow your business.</p>\n\n\n\n<p>Author: <br><a href=\"https://www.modeliks.com/about-us\">Modeliks Team</a></p>\n","slug":"financial-accounting-and-management-accounting-what-is-what","date":"2025-03-12T13:17:49","categories":{"nodes":[{"id":"dGVybToxNA==","name":"Financial Forecast"},{"id":"dGVybToxMw==","name":"Reports & Dashboards"}]},"mainCategory":{"mainCategory":["financial-forecast"],"videoHeader":null},"tags":{"nodes":[{"name":"accounting"},{"name":"Automate Accounting Processes"},{"name":"automation"},{"name":"business planning"},{"name":"financial accounting"},{"name":"Financial Accounting and Management Accounting"},{"name":"Financial analysis"},{"name":"financial forecasting"},{"name":"financial modeling"},{"name":"financial planning"}]},"featuredImage":{"node":{"id":"cG9zdDoxMDQxMw==","sourceUrl":"/images/cms/getty-images-beIKmPBGBeQ-unsplash.jpg","altText":"Financial Accounting and Management Accounting"}},"seo":{"metaDesc":"What are the differences between Financial Accounting and Management Accounting? How to plan, manage & fundraise in Modeliks?"},"modified":"2025-03-12T13:17:55","related":null}]}2:["$","$L8",null,{"post":"$9"}]
7:[["$","meta","0",{"name":"viewport","content":"width=device-width, initial-scale=1"}],["$","meta","1",{"charSet":"utf-8"}],["$","title","2",{"children":"Modeliks | The Financial Planning Process Explained"}],["$","meta","3",{"name":"description","content":"Are you in need of an explanation on how the Financial Planning Process works? How to do it? Look no further."}],["$","link","4",{"rel":"canonical","href":"https://www.modeliks.com/resources/financial-forecast/financial-planning-process-explained"}],["$","meta","5",{"property":"og:title","content":"Modeliks | The Financial Planning Process Explained"}],["$","meta","6",{"property":"og:description","content":"Are you in need of an explanation on how the Financial Planning Process works? How to do it? Look no further."}],["$","meta","7",{"property":"og:url","content":"https://www.modeliks.com/resources/financial-forecast/financial-planning-process-explained"}],["$","meta","8",{"property":"og:site_name","content":"Modeliks"}],["$","meta","9",{"property":"og:locale","content":"en_US"}],["$","meta","10",{"property":"og:type","content":"article"}],["$","meta","11",{"name":"twitter:card","content":"summary"}],["$","meta","12",{"name":"twitter:title","content":"Modeliks | The Financial Planning Process Explained"}],["$","meta","13",{"name":"twitter:description","content":"Are you in need of an explanation on how the Financial Planning Process works? How to do it? Look no further."}],["$","link","14",{"rel":"icon","href":"/favicon.ico","type":"image/x-icon","sizes":"16x16"}]]
1:null