On the financial management of SMEs Analysis and Countermeasures
[Abstract] financial management is the enterprise management is the most important part, the company's operational excellence is inseparable from good financial management in the increasingly fierce market competition, small and medium enterprises in the areas extensively, products rich, flexible operation mechanism, investment small, quick, and its strong adaptability to the
environment, showing strong vitality, our country has more than 10 million SMEs, accounting for 90% of total number of enterprises, providing 75% of urban employment opportunities to achieve the country's total industrial output value of 60% for China's economic development plays an irreplaceable role, however, for how to strengthen the financial management of this problem, there are a considerable number of small and medium enterprises do not pay sufficient attention to the role of the corporate financial management has not been full paper analyzes the financial management of SMEs in China Problems and their causes, and the corresponding countermeasures.
[Paper Keywords] SMEs, financial management, status quo causes and countermeasures
An SME financial management problems
1 financing difficulties of SMEs in China is currently a serious shortage of funds the vast majority of funding is a partnership investment, registered capital less capital strength is limited, which funds many of the family owners of their accumulated wealth, which led to enterprise funds too small, while the reality is that many of the long-term growth and development of small and medium enterprises, the demand for money is very large, so the shortage of funds is bound to seriously affect their development, while at this stage SME technological backwardness, business performance is not stable, there is no sound in the financial institutional factors, such as information disclosure system to reach an open and transparent, so financing difficulties. In addition, as business is small, not much can be pledged assets, thus making it more difficult aspects of financial guarantees increased. Meanwhile, in China, the lack of specialized financial
institutions for SMEs, and universal financial institution loans for SMEs are not incentives, which also greatly increased the difficulty of SME loans.
(2) Financial Management goals are not clear pursuit of profit maximization is the ultimate goal of financial management, but many will be seen as the only goal of profit maximization, the vast majority of their business activities, are short-term behavior, the pursuit of short-term profits, hoping to return on investment , and for the pursuit of long-term profits lack of planning for long-term development of enterprises lack a sound strategic objectives. relative lack of management capacity of SMEs, excessive debt management is a common problem these companies, in this case, the company's operating costs will be greater financial pressure will increase, the ability to pay increasingly fragile in this case, companies often form a vicious cycle, increase investment, and this investment must be very blind, the direction of a larger investment mistakes, resulting in many Finally enterprises into bankruptcy.
3 Financial analysis unscientific enterprise's development is inseparable from scientific financial analysis, corporate operating results must be effectively analyzed in order to identify the problems and prescribe enables companies to develop better direction, while the financial statements of SMEs lack of authenticity and accuracy, because its original purpose are generally tax inspection in order to meet its financial analysis method is also not scientific, often a mere formality, so the role of science in financial analysis can not.
4 Financial control is poor, poor ability to resist risks for many SMEs poor cost control, operating in the production process of the lack of raw materials, semi-finished products, fixed asset management, cost of waste is very serious. Moreover, in the lack of raw materials procurement budget control, increase consumption, while staff utilization rate resulting waste of human resources, labor costs also led to greatly increased cost of production is not conducive to the improvement of enterprise product pricing, over time, lead to reduced market share, market share decline In the economic downturn of the market conditions are difficult to win promotion initiative, and the high cost of many business will inevitably lead to a chain reaction in trouble, the enterprise gradually pushed the edge of bankruptcy.
5 ideas behind corporate executives, financial officers in the vast majority of small and medium business is the low level of private nature and therefore the ability of managers and management companies lower the quality, management thought behind. Financial management business management is the most important part of the , the company's operational excellence is inseparable from sound financial management, but many SME managers due to the lack of scientific financial concepts, financial management did not make the play its appropriate role in the position can be said that many SMEs investors is its operators, centralization phenomenon seriously, using the management model is the ownership and management of the high degree of unity, this unscientific management model is bound to create confusion in financial management, giving a negative impact on the development of enterprises. Moreover, many SMEs finance staff capital gains consciousness is weak, with business activities in the emphasis on cash
transactions, early withdrawal, delayed settlement, resulting in idle and waste of funds, the loss of interest income and investment income, the second is accounts receivable turnover is slow, while most of the business in order to fight customers using credit method, but in non-accrual measures ineffective, resulting in pregnant bad debts. three funds of funds supervision makes idle wind and rain, nobody cares, capital turnover rate is much lower, the company's profitability weakened.
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Second, to address problems of SMEs Suggestions
Chinese SMEs in financial management problems are internal and external causes of all these, the external terms of macro-economic environment is not conducive to enterprise development, their financial measures are not in place exacerbated these problems, so to solve these problems must come from within and outside at the same time begin to take various measures for improvement. which is more important is their own internal management system and mode of reform and improve its countermeasures from the following aspects.
1 to solve the difficult problem of SME financing funds are the lifeblood of a business, any business development are inseparable from the financial support, especially for the relatively lack of funds for SMEs, should give some support
from the following aspects: (a state can relax loan conditions for SMEs as well as certain aspects of the financial support to accelerate the development of risk investment, expand direct financing channels, to encourage qualified SME market, drawing on some of the successful experiences of countries and regions, opening up two plates market, the development of high-tech enterprises to provide the necessary funding. (two countries should support the establishment of security agencies at the local, a multi-level security system of our country by the credit guarantee system for small and medium cities, provincial, national three institutions whose business by the guarantee and re-guarantee two parts, mainly in the cities secured basis, mainly in provincial re-guarantee basis improve the credit aspects of system support. (3 SMEs themselves also need to improve the technical level, improve efficiency, and establish a sound financial system to complete the financing as much as possible.
(2) establish the correct development of the financial management of the target company without financial management, financial management and the target is the foundation, and only with the right target, we can keep moving toward this goal, for a correct financial management objectives, from the following aspects: (a SME business activities need to coordinate the various relationships, deal with short-term benefits and long-term interests, only the implementation of good long-term strategy in order to achieve sustainable management and development. (2 small companies need to reduce the blind investment and ineffective investment before investing to make a realistic investment project feasibility study report, it must cooperate with the investigation of the market situation, and then determine the production and marketing of investment products may be. (3 modern enterprise management, particularly the effective financial management, must have complete financial information to help managers analyze past and predict the future, so that managers look further ahead, in order to enhance their sense of risk.
3. Establish scientific and standardized financial analysis mechanism corporate management must have standardized financial analysis mechanism, the SMEs concerned, particular attention should be gradually established from the following aspects. (1 pair in a report using the comparison of the data analysis method for the comparative analysis of early and late and found a gap and cause
analysis to identify problems and solve problems, improve efficiency, (2 pairs of the company's financial position and operating results requires the use of a ratio analysis for a deeper analysis, through a multi-faceted, it is found in their own enterprises and industry advanced enterprises and the level of the gap, and constantly modify their business model, and ultimately enhance operational efficiency. (3 supplementary analysis of enterprise development trends, trend analysis method can be used only to grasp Well, the future of business and industry trends, we can grasp the right direction.
4 companies in order to achieve cost control to maximize their own interests, the cost is a very important aspect, therefore improving cost control has become an essential way of operating benefits, cost includes many aspects, from the following several methods Try: (a lower purchase cost. market price is constantly fluctuating, so business must fully understand the purchase channels, shop around, in this case in order to make the optimal choice for procurement, reduce the purchase cost. (2 improved technology is to reduce the cost of the core must pay attention to technology improvement opportunities, through technical innovation and development of new products, the maximum reduction in costs. (3 strengthen the daily money management, and coordinate liquidity, safety and effectiveness of sexual relations, although enterprise funds may invest less, fast recovery, maintaining a virtuous circle.
5 to change the backward financial management concepts, improve the level of business financial management (1 in job qualifications, the financial staff in the recruitment methods, we should strictly abide by the provisions >> << accounting officer job qualifications. (2 in training aspects, financial managers often deal with job training, so that they can receive the most advanced
management concepts, new ideas, improve their quality of management, improve their professional level. (3 regulate the financial officer's conduct, the
establishment of a combination of staff responsibilities and rights management system, the use of financial incentives to improve staff's innovative spirit and ability, and conduct regular business assessment and competition. (4 law, to strengthen the SME corporate legal awareness, strengthen enterprise responsible for the financial leadership of the work, so that not only can effectively prevent
On the financial management of SMEs Analysis and Countermeasures
