What are the problems of financial management of small and medium-sized enterprises?

In this economic crisis, due to China's most small and medium-sized production exists in the small scale of operation, capital and technical force is weak and other inherent problems, coupled with the traditional system and the external macroeconomic impact, in the financial management of their own development and the market economy are not adapted to the situation, by the unprecedented impact. Small and medium-sized enterprises should strengthen financial management, and actively prevent and resolve financial risks, and ultimately realize the key to sustainable development.

I, the current economic environment of small and medium-sized financial management of the main problems

In this economic crisis, due to China's most small and medium-sized production exists in the small scale of operation, capital and technical strength of the inherent problems, coupled with the traditional system and the external macro-economic impact, there are in the financial management of their own development and the market economy is not adapted to the situation by the unprecedented impact. Unprecedented impact. According to a research report of Chinese Academy of Social Sciences, 40% of SMEs have closed down in this financial crisis, 40% of enterprises are hovering on the life and death line, and only 20% of enterprises are not affected by this financial crisis. The main problems are:

1, weak internal financial control, low level of financial management

One is that the owners and operators of the financial management of the enterprise concept of obsolescence, the excessive pursuit of short-term profit maximization, the management of the absolute amount of focus on controlling the cost of relying on the reduction of short-term investment in order to improve corporate profits. Secondly, financial management insider control, accounting staff appointment "family", "kinship". Third, the financial management function can not be played, heavy accounting, light financial management. Fourth, accounting information distortion, accounting fraud, serious violations.

2, narrow financing channels, a serious lack of funds

Insufficient funds has been the first adverse factor in the development of small and medium-sized enterprises in China, the funds raised mainly rely on endogenous financing, the lack of exogenous financing channels. The main reasons can be summarized in two aspects: one is the small and medium-sized enterprises themselves: mainly for the small scale of production, can not form the economies of scale: backward management, business risk, short-term behavior is more common to repay the loan integrity is not enough to loan risk; two is the reason for the institutional arrangements, mainly in the direct capital market financing basically does not take into account the small and medium-sized enterprises, there is no venture capital market; indirect financing, there are no policy financial institutions dedicated to serving small and medium-sized enterprises. Policy financial institutions specializing in serving small and medium-sized enterprises.

3, blind investment, lack of scientific

Small and medium-sized enterprises due to the lack of investment funds, the pursuit of short-term goals in the investment process, little consideration for the expansion of their own scale, resulting in the investment process there is a greater blindness, and some business managers and even in making investment decisions, did not do the project evaluation, only personal experience and imagination to make decisions, the direction of investment is difficult to grasp, a greater waste of funds. The investment direction is difficult to grasp, and the funds are wasted.

4, the lack of capital operation mechanism

SMEs cash management inefficient, idle or insufficient funds. Some SMEs believe that the more cash the better, resulting in idle cash, loss of value-added opportunities; some because of the lack of planning arrangements for the use of funds, excessive acquisition of real estate, resulting in poor liquidity, trapped in financial difficulties. Accounts receivable turnover is slow and the proportion of bad debts is high. Because there are no strict credit standards, credit conditions and collection policies, no scientific and reasonable credit investigation and evaluation methods and effective collection methods, accounts receivable cannot be honored or bad debts are formed, and capital turnover is out of order. Weak inventory control in SMEs results in stagnant funds.

5, rigid management model, management concepts old

On the one hand, the typical management model of small and medium-sized enterprises is a high degree of unity of ownership and operation, the enterprise's investors at the same time is the operator, this model is bound to bring the negative impact of the enterprise's financial management. A considerable portion of small and medium-sized enterprises belong to the individual, private nature, in these enterprises, business leaders centralized phenomenon is serious, and for the theoretical approach to financial management lack of due knowledge and research, resulting in its responsibilities are not divided, act beyond the authority, resulting in chaotic financial management, financial monitoring is not rigorous, distortion of accounting information, etc.. Enterprises do not or cannot establish internal audit department, even if there is, it is difficult to ensure the independence of internal audit. On the other hand, the management ability and management quality of enterprise managers is poor, backward management ideas. Some enterprise managers based on their own reasons, not the financial management of enterprise management in the effective mechanism, the lack of modern financial management concepts, so that financial management has lost its due status and role in enterprise management.

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