Long term financial planning
The information required, processes and outputs of the financial informing strategy are detailed below.
What do I have to gather?
The following information is gathered when developing and progressively updating the financial informing strategy:
- The start of any planning or reviewing process needs to commence with assumptions. These are the foundation upon which the plan is developed. Assumptions can include: the expected rate of growth, acceptable level of debt etc.
- The key input is to integrate the components of the Asset Management Plan; particularly the Capital Works Schedule, whole of life asset costs and implications of addressing the renewal funding gap.
- Service Plans also need to be integrated to ensure changes in service delivery (type or level) are costed.
What do I do with it?
During the development of the financial informing strategy the following key processes are used:
- Financial analysis - determine the income and expenditure projections, balance sheet, cash flow statement and any other statutory reporting requirement.
- Revenue planning - determine the rates, borrowings, commercial activities, investments, fees and charges and grant opportunities to maximise available revenue.
- Sensitivity analysis - determine those factors or assumptions that if varied are most likely to impact the Financial Plan.
- Scenario modelling - prepare the projections/estimates in the plan based on different scenarios (e.g. expected, best case, worse case) to understand the impact of variation.
What do I end up with?
The following are outputs of the financial informing strategy processes:
- Financial plan - outlining assumptions, projections, statutory reports, revenue strategy and sustainability indicators that address the minimum requirements outlined in the National Frameworks.
- Up to Date financial capability information - can be used to inform other components of the Framework.