SME financial management: current problems and countermeasures

Abstract SMEs to improve the overall level of financial management not only affect the economic benefits of a single independent small and medium enterprises, but also related to a certain area, an industry development goals and social employment, stability and other social benefits. Based on the current situation of SMEs in China, analyzes the current problems in financial management and put forward corresponding countermeasures. Keywords:
SMEs; financial management; financial control

With the rapid development of China's economy, private companies continue to rise and growth of SMEs in the social and economic life has become an integral part of the . Since reform and opening, China has more than 1 0 million SMEs, accounting for 90% of the total number of enterprises, providing employment opportunities for 75% of the town, the country's total industrial output value of 60%, profit and tax accounting for 60% about 60% of our exports. Thus, the development of SMEs to economic and social stability plays an important role.


First, the current status of the financial management of SMEs in China

present, the following common situation of SMEs in China:
(a) most SMEs lack the concept of financial management systems
considerable part of small and medium enterprises are the private sector, investors are operators, most of its financial staff are not born, but also with business-based, and its decisions are often judged by business standards, the lack of global financial concepts, financial management infrastructure weak. Many SMEs are developed from the workshop by the family, the husband is the manager, his wife is an accountant, cashier. Despite the development of enterprises, but many companies do not change that habit. Cause of financial accounting and management control by non-professionals, accounting accuracy is poor, the more confusing the accounts, financial management going.

(B) Most SMEs lack the financial management system
many SMEs from small to large, enterprise management can not keep up, enterprise system gaps, most of the major operators rely on the experience of judgments, subjective , arbitrary large, the lack of scientific basis, it is prone to operational risk and financial risk.

(C) financial management in business management in a passive position and by the contempt the pretense of streamlining
many SMEs, the finance staff as support staff, is dispensable difficult to retain outstanding professionals, resulting in financial accounting, financial management is poor, hard-to-business production, supply, marketing to correctly reflect, it is difficult to have supervision.

(D) the financing difficulties faced by SMEs in general
With the deepening of reform and opening up and development of open space, small and medium growing demand for capital. As China's securities market is relatively underdeveloped, the listed high threshold, only a very small number of SMEs in the capital market to finance. In China, banks are the loan conditions are more stringent, these facts led the financing difficulties of SMEs is much higher than large enterprises or foreign companies.


Second, the small and medium enterprises in the financial management and analysis of the main problems

(a) of the funding difficulties, anti-risk ability, a serious shortage of funds, the slow development of
enterprises should continue to operate expanded reproduction must have sufficient financial support. But lack of funds is the main problem plagued the development of SMEs, so raising money is the most important issue facing small and medium enterprises. Although the initial establishment of SMEs in China is currently a more independent and diverse sources of financing system, but because of 1. SME small-scale business risk, less freedom of capital, assets and liabilities rate, borrowing from the bank the ability to obtain particularly poor. Small Capital smaller scale, determine their inherent ability to resist risks. 2. The Government has not managed dedicated SME support institutions, the state's preferential policies for small and medium enterprises are not inclined to make long-term disadvantage. 3. Commercial bank loans increase in the cost of these reasons, SME financing, SME financing led to difficult, security is difficult. 4. Mortgage guarantee system for SMEs needs to be improved, with initial operating conditions of SMEs is difficult to provide collateral, collateral and so on. 5. No matter how many loans banks must carry the full financing procedures, cumbersome procedures discourage many SMEs so.

(B) the weak financial control, financial control lax is a common problem for SMEs
financial control weaknesses mainly as follows: First, poor management of cash, resulting in idle or insufficient funds. Accounts receivable turnover is slow, resulting in difficulties in the recovery of funds, and no effective collection measures, the formation of a large number of bad debts. Second, inventory control is weak, resulting in financial slack. Use of funds by the end of many companies tend to stock more than doubled its turnover over, resulting in sluggish capital, working out of order. Money is not heavy weight, loss of assets waste. Disadvantage of inventory control, a lot of money takes a lot of inventory, resulting in sluggish capital, cash flow problems. Third, the intermediary is not perfect, the lack of services specifically for small business loans and loan guarantees financial intermediary institutions, without a sound credit management system for SMEs.

(C) the number of SMEs are weak financial officer
accounting costs by the organization, scale of production and human resources constraints, SMEs, financial management organizations are very simple, professional and is not strong, weak internal controls. Accounting is not strong, the accounting system is not perfect. Poor quality of the services of accountants, financial analysis difficult to correct, leading to corporate decision-making difficult to make accurate decisions.

(D) management model for SMEs rigid, outdated managerial concepts such as
a considerable portion of the small and medium enterprises are private nature, the typical management model is the high degree of unity of ownership and management rights, corporate investors, but it is also the operator , this model is bound to the enterprise financial management have a negative impact. Under this system, decision-makers often do not advance sufficiently through the financial officer or the subjective measure and my personal feeling closed to decide, or ultra vires act, causing confusion in financial management, accounting information distortion. In addition, companies do not or can not establish an internal audit department, even if it is difficult to ensure the independence of internal audit. Some business managers on their own reasons, not the financial management into an effective mechanism for enterprise management, the lack of modern financial management concepts, so that financial management in business management has lost its rightful place and role. Links to Research Papers Download http://www.hi138.com