Jiangsu Jiangdu Fuchi Engineering Co., Ltd.
Wang Xinqi, Zhou Changjie, Kong Zhaoguo
In recent years, with the continuous deepening of system reform in construction enterprises, most reformed construction enterprises have widely implemented the internal contracting management responsibility system, leading to phenomena such as "management by contracting" or "contracting without managing." Some enterprises adopt a loose and out-of-control management method characterized by "paying sufficient taxes to the state, covering all enterprise expenses, and leaving the rest to the contractor's discretion," neglecting financial management within the enterprise. This has resulted in a year-on-year decline in enterprise economic benefits. As a long-term financial worker in grassroots units of construction enterprises, I deeply feel the importance of strengthening financial management, especially the implementation of internal financial control. In response to these issues, I will discuss the following aspects: how to establish the core position of financial management, strengthen internal financial control, promote the improvement of enterprise economic benefits, and how to improve and perfect financial management.
1. The Position and Role of Financial Management in Enterprises
Enterprise management takes financial management as its core, and financial management centers on capital management, which itself focuses on internal financial control. This is not determined by human subjective will but is an objective requirement of the socialist market economy.
1) Enterprise management taking financial management as its core is determined by the mission and nature of enterprises.
Enterprises exist in society as economic organizations aimed at profit-making. Under market economy conditions, pursuing their own profits is the fundamental mission of enterprises. The result of enterprises seeking value-added is the maximization of social wealth. Only when enterprises adhere to legal operations and pay taxes according to law, does greater profitability indicate a greater contribution to society. In this situation, enterprises must transform post-event accounting under traditional planned economies into pre-event prediction. If we make an investment decision, we cannot easily conclude based on experience figures; instead, we must conduct pre-event predictions, analyze the input-output of that investment through capital flow analysis, and perform financial feasibility analysis before making decisions. Therefore, placing financial management at the core of enterprise management and strengthening internal financial control is an objective requirement for enterprises to pursue maximum profits under market economy conditions.
2) The nature of financial management determines its position and role in enterprise management. First, financial management is a form of value management. It is generally believed that enterprise financial management involves managing the entire process of corporate capital flow. Capital flow is the monetary representation of a company's production and operation activities. From a physical perspective, a company’s production and operation activities are manifested as the continuous purchase, consumption, transformation, and sale of material wealth and labor. From a value perspective, with the continuous purchase, consumption, transformation, and sale of material assets, it is represented as the continuous flow of funds, as well as predictive, decision-making, control, analytical, and evaluation activities conducted in value terms. Second, financial management is a comprehensive form of management. Since financial management is a form of value management, its management object represents the entire process of a company’s production and operation activities expressed in value form, making financial management a comprehensive form of management. Wherever there is economic activity, there is capital flow, and wherever there is capital flow, it falls within the scope of financial management. Various business activities and all management work of an enterprise are closely related to financial management. Thirdly, from the perspective of enterprise management objectives, since its main goal is the maximization of financial results and financial status, all the enterprise’s work should revolve around this goal, using it as the starting point and ultimate aim of all management work. The determination of this goal, information feedback during its implementation, and the assessment of goal achievement cannot be separated from financial management and are mainly realized through financial management work. This is because only financial management possesses the nature of value management and comprehensive management, thereby having such functions. Therefore, the entire process of all enterprise management work cannot be separated from financial management.
Management itself is not the goal but a means, with the goal being to maximize the improvement of enterprise efficiency. Enterprise management itself is a financial management activity for its own speculation. Management is productivity, and achieving efficiency through management requires high attention to enterprise management. Profit-seeking enterprises must place financial management at the core of enterprise management.
2. How to Establish the Core Position of Financial Management to Promote the Improvement of Enterprise Economic Benefits
Enterprise management taking financial management as its core is necessary for establishing the socialist market economy system and modern enterprise systems. Strengthening financial management and implementing internal financial control aims to promote the improvement of enterprise economic benefits. Financial work must adapt to new situations and achieve the goal of promoting the improvement of economic efficiency.
1) Strengthening capital management and activating funds is the key work of enhancing financial management.
Capital is the lifeblood of an enterprise and the foundation upon which it survives. All production and operation activities of an enterprise are manifestations of capital flow. Smooth capital operation displays vitality in production and operations, while obstacles in capital operation lead to difficulties in production and operations.
To enhance capital management, the first step is to strengthen the adjustment of capital and concentrate on controlling the direction of capital flow. To ensure reasonable capital operation, it is necessary to consider the overall situation and centrally adjust. If the financial authority of an enterprise is overly dispersed, large amounts of capital cannot form a cohesive force. Although some local prosperity or vitality may appear, the entire enterprise will inevitably fall into a deadlock. Enterprise financial management must adhere to forecasting, planning, controlling, evaluating, and assessing, adhering to realistic principles and maintaining a principle of living within one's means. Reasonable arrangements should be made for investment directions, sequences, and intensities. It is essential to correctly handle the relationship between the state, enterprises, and individuals, focusing on handling the structural relationship between fixed asset investments and operating funds. When allocating capital plans, priority must be given to ensuring sufficient production and operation funds, avoiding gaps in production and operation funds, preventing the encroachment on operating funds or excessive borrowing for purchasing and constructing fixed assets. Especially for non-productive fixed asset purchases and constructions, decisions should be made cautiously. Blind payments must not cause short-term funding shortages or heavy long-term burdens due to investment decision errors.
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