Genome’s team is back with yet another article that dives into different types of fraudulent financial situations that people and businesses can face. And this time, card-not-present fraud is on the agenda. Want to know how to avoid scams associated with card-not-present transactions? We gathered some tips below. What is a card-not-present transaction? Before we get to the fraud part, let us first explain what card-not-present transactions are in general. Card-not-present transactions (also known as CNP transactions) are the type of payments a person makes with their debit or credit card. Such payments happen remotely, meaning that the card and
Finances are a very complicated and extensive topic for any business. A lot of careful planning and thought must be put into it not only to manage your corporate funds successfully but even to keep your company afloat.
This is where financial goals come into place, allowing you to better understand and organize financial strategy. But how do you set financial goals? Find out in Genome’s article!
What is a business financial goal?
Let’s be clear: any company needs money to operate, upgrade its services, purchase necessary equipment, pay employees, and for many more reasons. This is why businesses pay so much attention to profits, investment opportunities, financial planning, etc. But to be successful on all these fronts, there must be a structure to these processes, and setting financial goals is crucial.
Thus, financial goals are objectives that a business strives to reach when it comes to its finances and earnings. In turn, business financial goals allow better planning and managing of a company’s expenses, investments, operational costs, etc.
We can distinguish two types of financial goals:
Short-term financial goals. As the name suggests, such goals must be achieved in a short period: from a couple of months to a year. Short-term financial goals are usually quite simple and surface level, and no wonder – these are milestones you need to hit for your company to stay afloat and continue day-to-day operations. For instance, these financial goals usually refer to tax planning, maintenance, savings for emergency funds, etc.
Long-term financial goals. Such financial goals of a company will definitely take longer to complete, as they are typically set for a couple of years or longer. However, these business financial goals greatly define a company’s overall strategy and planning. The main aim of long-term financial goals is to ensure that a business develops at a steady pace, remains stable, and grows. Among the examples of long-term business financial goals are a company’s expansion to other countries and markets, sustained profitability, and establishment of a solid brand identity.
How to set financial goals
Setting financial goals literally means putting your money where your goal is. It sounds simple but requires some work on your company and complete clarity of your vision.
Before setting financial goals, it’s essential to understand your current financial status. Calculate your income, expenses, assets, liabilities, and savings. This information will help you set realistic goals and create a budget.
The non-vague vision of your financial goals is a must. Maybe you want to create a startup company and earn 100 thousand euros. To do so, you need a clear vision to figure out how you can make this amount of money.
Or maybe you already have a business and want to earn more. To increase profit, you will start considering different strategies, for example, attracting new clients through social media platforms. The key point is measurable financial goals backed by numbers.
Ensure your goal is realistic, given your current financial situation. If you have multiple financial goals, prioritize them based on their importance and urgency.
Some business financial goals may need immediate attention, while others can be long-term.
Business financial goals must always be based on a clear timeframe. Whether you are a businessman or just an individual wanting to rationalize their income, you need to learn how to set financial goals with clear deadlines.
Getting back to a previous example, a desire to make 100 thousand euros is not bad but lacks clarity. On the other hand, the goal to make 100 thousand euros within a year as a result of the achieved financial objectives of a business, such as financial optimization, is much better.
And, of course, ensure your business financial goal is realistic for achieving with unforeseen circumstances. Periodically review your goals and your progress.
Planning is good, but if calculations back it, it is even better. Nevertheless, it is important to remember that our plans don’t always come to fruition.
No matter your financial planning skill level, it would be wise not to put all your money into one basket. Plan “B” is a must when you set your financial goals.
Make sure your business has money saved in case of emergencies and unforeseen events. Your company should also have a risk management team and closely monitor the financial market.
Remember that setting financial goals is a dynamic process, and it’s okay to modify your goals as your circumstances change. The key is to have a clear plan, a plan “B,” and the discipline to work towards achieving your financial objectives over time.
Financial goals: examples for businesses
To demonstrate how setting financial goals works, let’s review some examples. Note that these are just made-up examples, and although your company may have similar financial goals, every business works with unique circumstances and has access to different resources.
Ben, the CEO of an IT company, wants to reduce operational expenses. He plans to decrease the number by 10% within a year, making it a short-term financial goal.
To achieve the goal, he and the team will first need to analyze their current operational expenses and how they have been changing over the last year. It will allow them to assess which expenses are unnecessary and can be reduced or cut down entirely.
Jack, the CEO of the e-commerce company, is thinking of increasing the revenue of his business by 20%. He hopes to reach this financial goal in 2-2.5 years, as Jack understands that many changes are required.
He and his employees need to develop a strategy to increase revenue. On the one hand, they can decide to raise prices, which is a faster solution but can alienate some of the regular customers. On the other hand, they can start a marketing campaign to popularize their products among potential future customers. Last but not least, they can diversify their production line by adding new products.
Achieve your financial goals while using Genome
Genome is an electronic money institution that offers business wallets, as well as relevant business and merchant financial services. With us, you can start multi-currency accounts and store funds in euros, US dollars, and British pounds.
You can make SEPA money transfers or instant internal Genome transfers. Order multiple virtual and physical corporate cards for all your expenses.
Need a merchant account? No problem. You can get it here, along with customizable, easy-to-integrate payment pages. Host-to-host, hosted payment mages, and mobile SDK are available.
Last but not least, you can invite members of your team to manage the business wallet together and share the workload. You can assign your employees different roles with access to various wallet features. An essential tool to improve your financial goals management.
What are the types of financial goals?
Business financial goals have a lot of variety, as companies work with different budgets and objectives in mind.
However, we can point out two general types of financial goals. These are short-term and long-term financial goals. We explained both above, but the main gist is that short-term financial goals pertain to a company’s immediate needs and are usually achieved within 3 months, half a year, or a year.
Meanwhile, long-term financial goals take longer to complete, and they are something that drives the development of the company throughout the years.
What are the four financial planning goals of a firm?
A business can set multiple financial planning goals for itself, so it is difficult to pinpoint just four. Generally, the financial objectives of a business when it comes to planning are:
- Profits. Any company wants to ensure its profitability in the long run;
- Optimization of assets. Financial planning must account for the optimization of a company’s assets and their efficient management;
- Liquidity. A business also needs to plan its operations to make sure it meets its financial obligations and covers day-to-day operational expenses;
- Risk management. Last but not least, all the financial risks must be identified and avoided with the help of the risk management team.
What are the 3 different types of financial goals you can set?
The Genome’s team has described some examples of financial goals a company can have above. Financial goals can differ vastly from business to business. The three types of different financial goals can be an increase of a net profit, expense of a market share, and the reduction of debt.