Financial Planning and Control Essay Example | Topics and Well Written Essays - 1000 words

Financial Planning and Control - Essay Example are how the financial planning is applied to an engineering business, the effect of financial information on decision making, and how other the use of other financial techniques such as standard cost and variance analysis are used to optimize the effectiveness of an engineering business. Three questions are answered derived from a textbook written by a scholar that provides information about the topics covered in this paper. Companies dedicated to offering engineering service solution have a business structure in which each individual talent represents a unique vendor that purchases unique solution that are typically independent of each other. Each contract is a peculiar project that must be design to obtain a gross profit that satisfies the income expectations of the stakeholders of the company. In order to better serve the needs of future customer the company has to plan the financial decisions that will allow the firm to expand its productivity capacity. For example the purchases of a new mega server worth $150,000 can provide engineering the opportunity to take more IT project to increase the company’s income. If a manager plans to make such a purchase other factors that have financial implication in the costs of the company must be planned for such as its facility layout and human labor require achieving expansion. When an engineering firm takes on a new job the project manager of the contract must perform financial planning for the project to determine the budget that is needed to be able to complete the project on a timely manner. A full risk management analysis is necessary to reduce the risk of unwanted events from occurring, while at the same time developing mitigation plans to have an action option that can implemented if an unforeseen event occurs. An engineering firm working on a construction project can mitigate risks from natural disasters by making the financial decision of purchasing insurance that covers 100% of the damage causes by such an