IMPACT OF FINANCIAL PLANNING AND CONTROL SYSTEMS ON ORGANIZATIONAL PERFORMANCE

Abstract

Financial Planning and Control Systems (FPCS) impacts organization’s performance greatly and business management conducts intense study on them. Planning, monitoring and evaluation of financial performance in the context of strategy, referred to as financial planning and control systems (FP&CS) comprise of the processes, tools and frameworks used to achieve these processes. The application of FPCS in the organization is a measure that helps guarantee effective decisions, facilitate the flow of resources towards meeting organization's goals, and improving on organization's costs reduction. The relationship between FPCS and organizational performance is analyzed, as well as the contribution of the quality and the integration of financial planning and control means to profitability, productivity and growth. Financial risk can be reduced, financial activities can be linked to business strategy and performance targets achieved with evidence and insight from empirical analysis and insight from theory that robust financial controls help. The research also shows that for a firm to continuously succeed in dynamic business environment, its financial system must continuously improve and therefore be flexible.