Under present conditions long-term financial planning covers the period from one year to three years. Long-term planning consists of developing the financial strategy of the enterprise and financial forecasting activities. The financial strategy of the enterprise is a definition of long-term goals of financial activity of the company and choosing the most effective ways to achieve them. The financial strategy must also be consistent with overall company strategy, although it also has on the overall strategy of an impact.

The base of long- term planning is forecasting, the incarnation of the company strategy.
Forecasting means studying the possible financial condition of firms in the future. The base of the forecast is a compilation and analysis of available information and then simulating of possible scenarios. Information base forecast is accounting and statistical reporting enterprise.
Unlike planning forecasting is not the task of implementing forecasts in practice, since the forecast is only possible to predict the scenario of the situation. Forecasting involves the development of alternative financial indicators and parameters. Their use in emerging and pre-predicted trends in the market helps define one of the options for the development of the financial situation of the enterprise.

Result of the long- term financial planning is to develop the three main financial documents:
 forecast profit and loss account;
 cash flow forecast;
 forecast balance sheet.
The main aim of creating these documents is to assess the company’s financial situation at the end of the planning period.

For making projections of financial documents is important to correctly determine the amount of future sales. It is necessary for the proper organization of the production process, distribution of funds, control of inventory. Forecast sales volume gives an idea of what market share the company requires to take. Projections are based on sales data for previous periods and market research, including surveys of potential consumers, the study of trends and new trends in the market.

Forecast sales are expressed in both monetary and in physical units.
By means of the forecast profit and loss account the value of their profits in the coming period is determined, it shows the dynamics of the financial operations of the enterprise.

Forecast balance reflects a fixed, the statistical picture of the company’s financial situation.
Forecast cash flow reflects the cash flows of the current, investment and financial activities. Demarcation activities in the development of the forecast improves cash flow management.
By means of using the cash flow forecast you can more accurately assess how much cash is needed at certain times to synchronize the receipt and expenditure of funds.

After compiling this forecast a funding strategy for the company is determined. Consistently are determined the sources of long-term financing, capital structure is formed and the cost, the way is chosen to build long-term capital.

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Current financial planning is an integral part of the long-term plan. It is based on the established financial strategy and financial policies on certain aspects of financial activity and represents a specification of its parameters. Developing specific types of ongoing financial plans allows the company to define the coming period, all sources of funding for its development, form the structure of revenues and costs the company to ensure continued solvency, determine the structure of assets and the firm’s capital at the end of the planning period.

Current financial planning is to develop three key documents:
 Plan cash flow;
 Plan of the profit and loss account;
 Plan balance sheet.

The main purpose of these documents is assessment of the financial situation of the company at the end of the planning period. The current financial plan is created for a period of one year.
A yearly financial plan is divided on a quarterly or monthly, depending on the funding needs. More specific plan allows you to more accurately coordinate the movement of funds to match income and expenses, eliminate cash gaps.

On the phase of creating the annual financial plan is established and respective capabilities of the enterprise for the production of products, services supply and demand in the market.
Current financial plans of the enterprise are developed from data on:

 financial strategy of the firm;
 results of financial analysis in the intervening period;
 planned volume of production and sales;
 other economic indicators of the operating activities of the company.

Also on plans developed affect the existing legislation, the tax system and other external factors.
For the financial instruments it is important to determine the amount of future sales, usually this plan is still at the stage of long-term financial planning.

Based on these data, the necessary amount of material and labor resources are determined and other composite manufacturing costs are calculated. And already, based on these data, a planned profit and loss account are developed. With this report profit margin is projected, which must be received in the settlement period.

At present time in medium and large enterprises method for planning costs of the centers of responsibility is widespread, when the head of each department is responsible for the costs of his department.

Then there is a plan for cash flow. This plan takes into account all receipts and disbursements, costs and expenses, shows the net cash flow, then there is an excess or deficit of funds at a particular time. In fact, it shows the cash flows of the current, investment and financial activities. Differentiation of types of activities can improve cash flow management.

The plan of cash flows for the year is drawn up by quarters and includes two main parts: income and expenditure. These parts are in turn divided into expense (income) by type of activity: the current, investment and finance.
Final document of current annual financial plan is a planned balance of assets and liabilities at the end of the planning period. It shows the condition of the property and finance companies as a result of the proposed activity.

The object of developing the balance plan is the formation of an optimal capital structure, providing sufficient financial stability of companies in the future period. Financial control is done by comparing actual performance with the plan.

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