Financial planning is a concern with the preparation of a financial blueprint of an organization for future operations. Financial planning ensures that enough funds are available at the right time. Financial planning is the process of determining the objectives, policies, procedures to deal with the financial activities of an organization.

Importance of financial planning are: 

1. Tool to face uncertainties: Financial planning is a tool to face uncertainties. It helps in forecasting different business situations and develop alternative financial plans to meet different situations.

2. Ensures liquidity: Financial planning would ensure the liquidity of funds throughout the year for meeting various financial commitments and thereby creating confidence in the minds of the suppliers who provide funds to the organizations.

3. Ensures adequate funds: Financial planning avoids the situations of both surplus and shortage of funds. Financial planning estimates quantity of the funds required and time when it is required to ensure the optimum fund to achieve the company objective.

4. Elimination of waste: Good financial planning through proper policy and procedures contribute to the elimination of waste of funds and facilitates maximum utilization of the available resources. It also avoids complexity and lack of coordination among various functions of an organization.

5. Better financial control: Effective financial planning predetermines the desired results and also helps to check the deviation and adopts corrective measures to achieve the desired goals of the organization.