It is the International Board of Standards and Practices for Certified Financial Planners that consider a person a certified financial planner. If you are after the title of a certified financial planner, then there are certain things that you have accomplish first. Firstly, you have to make sure to pass countless examinations. Second, it is crucial that you yourself will be enrolling in continuing education classes. Having expert knowledge regarding tax preparation, investing, and insurance is a must when it comes to certified financial planners.
Sales forecast is the first line of work where certified financial planners get to start their job first. The estimated level of sales is the basis when it comes to how financial variables are being projected. This means that the accuracy of your sales forecast will be the one that will determine the accuracy of your financial forecast. Sometimes, the financial manager is a participant in the developmental process of the sales forecast. Nevertheless, its main responsibility will still have to be shouldered by no other than the certified financial planner.
Sales forecasts will have to be prepared in different horizons of planning. In addition, sales forecasts have a number of purposes. The purpose is for investment planning if the certified financial planner develops a sales forecast that will last for longer periods of time such as a period of 3 to 5 years. On the other hand, it is because of financial forecasting exercise when the certified financial planner will be making a one or two year period of sales forecast. In addition, if the sales forecast only has a shorter duration such as being one month, three months, or six months, then this is solely done for the purpose of aiding cash budgeting as well as working capital planning.
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Working capital is another area where certified financial planners are equipped to deal with. Keep in mind that there are two major concepts that are related with a working capital. The first being gross working capital and the second being net working capital. When it comes to the total of all of your current assets, then it will have to be the gross working capital. When it comes to the difference between current liabilities and current assets, then you are dealing with net working capital. When it comes to the management of working capital, then you should know that it is about the management of both current liabilities as well as current assets. Nonetheless, it will have to be the management of current assets that is the major thrust. This is an expectation owing to the fact that current liabilities only arise if current assets are present. Working capital management is an important area in the job of a certified financial planner. This is because when you invest in current assets, it will also have a bearing on your total investment.Financing: 10 Mistakes that Most People Make