In the normal operation of enterprises, working capital plays a very important role, and the management of working capital is directly related to the survival and development of enterprises. The following is what I arranged for you. I hope you like it.

Analysis on Working Capital Management

China Library Classification. : F275 document number: a document number:1009-4202 * * 2010 * *10-062-0/.

Working capital management has always occupied an important position in enterprise financial management. The management level of working capital directly affects the liquidity of industrial funds, and then affects the cost and benefit. With the rapid development of modern social economy, the importance of working capital management is particularly prominent. This paper first gives a brief overview of working capital, and on this basis, puts forward the problems existing in the management of working capital of Chinese enterprises and puts forward some countermeasures, with a view to having positive significance for the management of working capital of enterprises.

Keywords: working capital, current asset management

I. Overview of Working Capital

Working capital, also known as working capital, is divided into broad sense and narrow sense. Working capital in a broad sense, also known as total working capital, refers to the funds occupied by current assets in the production and operation activities of enterprises, including cash, marketable securities, accounts receivable, inventory and other funds. Narrow working capital, also known as net working capital, refers to the balance of current assets minus current liabilities. Working capital, whether in a broad sense or a narrow sense, should be the sum of the relationship between current assets and current liabilities from a financial point of view. The "harmony" here is not a simple sum of quantity, but a reflection of relationship.

Working capital management is an important means for enterprises to obtain benefits from management. In order to effectively manage the working capital of enterprises, it is necessary to study the characteristics of working capital of enterprises in order to carry out targeted management. The working capital of an enterprise generally has the following characteristics: First, the turnover time is short. According to this feature, it shows that liquidity can be solved by short-term financing. Second, non-cash working capital such as inventory, accounts receivable and short-term marketable securities is easy to realize, which is of great significance for enterprises to cope with temporary capital needs. Third, quantity fluctuates. Current assets or current liabilities are easily affected by internal and external conditions, and the quantity often fluctuates greatly. Fourth, the sources are diverse. The demand for working capital can be solved by long-term financing and short-term financing.

Second, the main problems in the management of working capital of Chinese enterprises

* * * A * * * financing difficulties, a serious shortage of liquidity.

At present, some enterprises in China have initially established a relatively independent and diversified financing system. Local levels also provide financial support to some small and medium-sized enterprises; The People's Bank of China also encourages commercial banks to increase credit support for SMEs. These measures have improved the financing difficulties of some enterprises. However, financial institutions still have defects in improving financial services, developing financial products suitable for the development of small and medium-sized enterprises, and regulating credit. Therefore, financing difficulty is still the most prominent problem for most enterprises in China.

* * * 2 * * lax cash management, resulting in idle or insufficient funds.

Some enterprises pursue the concept of "cash is king", thinking that the more cash, the better, which leads to idle cash, leading to an increase in cash management costs and opportunity costs; Moreover, most enterprises do not prepare cash plans and do not make full use of idle funds; Some small-scale enterprises lack plans for the use of funds, over-purchase real estate, have a high proportion of loan investment, and are facing increasing risks. They always recover their investment as soon as possible and rarely consider expanding the size of the suite.

* * * Three * * * do not pay attention to cash flow management, and the liquidity fluctuates greatly.

At present, many enterprises pay more attention to sales than financial management, and do not pay attention to the management of daily cash flow, so the working capital fluctuates greatly. When the economy is prosperous, we can't correctly predict business risks and financial risks, and blindly expand the scale of production. Once the external environment of the enterprise changes, the product cost increases, the operating cash inflow drops sharply, or the new project is slow to take effect, the original operating funds are in a hurry, or the debt expires, and the financial risk increases, the problems and crises are fully exposed. Therefore, it is imperative to master cash flow management.

Three, improve the management of enterprise working capital countermeasures

* * * A * * cash management countermeasures

Strengthen the financial management of enterprises with cash flow as the core, and enhance the "immunity" ability of enterprises. At present, enterprises usually encounter the crisis of broken capital chain, and it is very important for enterprises to ensure adequate cash flow to maintain production and operation. We should strengthen cash management, determine the best cash holdings, save cash management costs, and do a good job in cash recovery and expenditure. Pay attention to the investment of idle funds and increase cash income. Faced with the increasingly complex external environment, enterprises should form a good atmosphere and ideology that requires benefits from management and development from science, strengthen daily management and require benefits from within enterprises. Strengthen the cash flow management of various functional departments within the enterprise. Recognize the importance of managing, using and controlling cash flow, clarify the responsibilities of financial departments, and adhere to the implementation of financial management at all levels.

* * * II * * * Accounts receivable management countermeasures

1. Reasonable credit policy. Extending the credit period will certainly increase sales and have a favorable impact, but the losses of accounts receivable, reminders and bad debts will also increase at the same time, which will have a negative impact. Therefore, it is necessary to formulate a reasonable credit policy, accelerate capital turnover, improve the efficiency of capital use, and reduce the loss rate of bad debts.

2. Establish an internal control system for accounts receivable. Enterprises should establish accounts receivable collection responsibility system, so that accounts receivable can be implemented to relevant personnel, so as to comprehensively monitor the debt repayment of customers and the collection of accounts receivable. The salaries and bonuses of relevant personnel can be linked to accounts receivable, and collection companies can be used when necessary.

* * * Three * * Inventory Management Countermeasures

Establish and improve the rules and regulations of inventory management, and establish standardized operating procedures in material procurement, acquisition, sales and sample management to plug loopholes and maintain safety. Inventory management and recording must be separated to form a strong internal inspection, and asset management, recording, inspection and verification must never be entrusted to one person. Combined with the characteristics of the enterprise, take regular inventory and take turns to take stock of the actual quantity of property and materials, properly handle the inventory surplus and inventory deficit, and ensure that the accounts are consistent with the facts. As far as possible, we should compress outdated inventory materials, avoid capital stagnation, and ensure the optimal structure of inventory funds by scientific methods.

* * * IV * * Strengthen the financial budget of enterprises and improve the operational efficiency of enterprises.

Financial budget enables enterprises to correctly predict risks, get all kinds of information of funds in time, take measures to prevent risks and improve efficiency. At the same time, it can also coordinate the work of various departments of the enterprise, avoid conflicts between departments and improve the efficiency of internal cooperation. In addition, under the guidance of sales, expenses and other budgets, the sales department can also have a certain understanding of the market in advance, grasp the market changes, and reduce the market risk of inventory. Therefore, financial management should stand in the perspective of the whole enterprise, build a scientific forecasting system and formulate a scientific budget, including sales budget, procurement budget, investment budget, labor budget and expense budget.

Four. Concluding remarks

At present, China's enterprise system reform is gradually deepening, and the market economy is still in the process of continuous development and improvement, and gradually moves towards internationalization, which is the external environment faced by Chinese enterprises to strengthen working capital management. Judging from the operating conditions of enterprises themselves, a considerable number of enterprises have low management level, poor management, backlog of products and shortage of funds. The internal environment for China enterprises to carry out fund management is also not optimistic. Therefore, in the course of business operation, enterprises should strive to realize the efficiency of capital utilization, obtain the maximum output with the minimum input, and ensure the reasonable operation of enterprise funds.

References:

[1] Guo. How to strengthen the management of enterprise liquidity? Finance and accounting. 2008*** 19***.

[2] Cheng Bo. A summary of research on working capital management. Journal of Hunan University of Technology * * * Social Science Edition * * 2009 * * * 02 * *.

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