Information Technology Enabled Services are the significant sector help many organisations to improve the efficiency of the work. India and Philippines are major hub for Information Technology Enabled Services.
ITES services majorly include medical transcription and coding, data mining, Back Office operations, Business process outsourcing, knowledge process outsourcing, Legal Process Outsourcing, and also logistic management.
Many business organizations need ITES services for smooth operations.
Top 4 elements for successful financial plan for ITES business-
Since financial plan for ITES business is an overview of financial situation for further growth.
There are namely 4 constituents for ITES business to determine the financial plan –
a) Sales forecasting
b) Expense Outlay
c) Statement of financial position
d) Break even analysis
These four constituents help to determine any other financial condition of the ITES company.
A) Sales Forecasting –
It is a general practise by the CEO, CFO, of the companies to have sales revenue for every quarter or for a year.
This helps them to get the better understanding to know detect any sales cycle pattern.
Sales forecasting also helps in the other marketing initiatives and growth strategies.
Every business tries to accomplish the financial goals in the existing financial year. However, there are some businesses who are ready by understanding correlation in up and down because of any external factors like economy, pandemic and etc.
B) Expense Outlay –
While setting up the financial planning of any ITES company or any company for that matter, keeping eye on expenses and planning of those expense is more important.
Those expense would be categorised into three segments namely regular expense, future expense and associated expense.
Regular expense is those which is related to ongoing cost of the company, this also includes operational cost, rent, utility cost and also payroll.
Future expenses are those expenses of ITES business which needs to be spend under maintenance cost, future cost in tax rate increment, increase in minimum wage cost. Also, any man made or natural calamity causes business loss can cover under Future expenses.
And more importantly associated expenses those which is the overall cost of various initiatives like investment on new talent hire, to train them for specific job etc.
This associated expense is the one which help to properly manage future growth and prevents businesses from exceeding costs.
C) Statement of Financial Position –
In any ITES business Assets and liabilities are the most important aspects of business.
This will decide the overall net worth of the company.
IF tracking both of ITES business this would ensure the future business potential value.
To find the answer of the question of how the business has performed over a specific time period, profit and loss statement plays a crucial role.
And to understand the financial position of the business on any day balance sheet gives the clear idea.
D) Break Even Analysis –
Break even analysis is very helpful for understanding the business revenue and potential costs against the profits of expansion of the output of the company. Getting company’s all expenses elaborated, the company’s break-even analysis is more accurate and turn out to be more useful.
Conclusion –
This has been observed many business leaders or owners, financial planning put aside and focus more the very next challenge what they face. Most of time those are operational issues.
This is where the organisation is in rapid growth and resources are stretched.
If financial planning of ITES companies is done for longer period of time, then it gives more positive returns when company Is in financial trouble.
