On the problems and countermeasures of financial management in small and medium-sized enterprises Abstract: Financial management is an important part of enterprise management, which is directly related to the survival and development of enterprises. This paper discusses the problems existing in financial management of small and medium-sized enterprises, and puts forward corresponding countermeasures and suggestions. Keywords: small and medium-sized enterprises; Financial management; Problems; Countermeasures After years of reform and opening up, China's small and medium-sized enterprises have made brilliant achievements and played an important role in China's national economy. However, at present, small and medium-sized enterprises are struggling with high failure rate, and the average life span of enterprises is only one year. An extremely important reason is that financial management can't keep up with the needs of enterprise development. Under the condition of market economy, in order to survive, develop and make profits, enterprises must establish a modern enterprise system and carry out capital operation scientifically, which requires strengthening financial management. First, the problems in financial management of small and medium-sized enterprises (1) lack clear industrial development direction and scientific demonstration of project investment (1) unilaterally pursue "hot" industries, ignore objective conditions and their own capabilities, and ignore the impact of national macro-control on enterprise development. Second, there is a lack of scientific planning and deployment of the investment scale, capital structure, construction period and source of funds of the project, and a lack of reliable prediction of the cash flow that will occur during the construction and operation of the project, so it is hastily launched. Once the state strengthens macro-control and tightens bank credit, so that the construction funds cannot be put in place as scheduled, enterprises will face a dilemma and even cause huge economic losses. In recent years, due to financial difficulties, many enterprises have invested in projects such as steel, electrolytic aluminum and cement, or "cut meat" for sale or become permanent "projects under construction". Not only have the enterprises paid a heavy price, but some banks have also been dragged into the quagmire. (B) Lack of funds, financing difficulties At present, China's small and medium-sized enterprises encounter many difficulties in the process of financing because of their small investment scale and low capital and technology composition, which restricts their development. On the one hand, the main reason for financing difficulties comes from the quality of enterprises themselves. Small and medium-sized enterprises are small in scale, lack of their own funds, low in reputation and generally low in credit rating; On the other hand, the approval authority of state-owned commercial banks for fixed assets investment loans is too centralized, and the proportion of non-performing loans is high at present, making it difficult to collect loans. At present, the country's credit guarantee system for small and medium-sized enterprises is not perfect, which makes financial institutions unable to effectively prevent bad business practices. In order to reduce the loan risk, financial institutions have to be cautious. Secondly, SMEs have no private financing channels. In areas with more private investment, most of them adopt private fund-raising to solve the capital problem, relying entirely on personal credit and high interest. The financing cost is very high, and the risk is much greater. As a result, small and medium-sized enterprises are seriously short of funds and their investment ability is relatively weak, which hinders their development. (3) The management mode is rigid and the management concept is outdated. On the one hand, the typical management mode of small and medium-sized enterprises is a high degree of unity of ownership and management rights, and the investors of enterprises are also operators, which has brought negative effects to the financial management of enterprises. A considerable number of small and medium-sized enterprises belong to individual and private nature. In these enterprises, the phenomenon of centralized management and family management is serious, and the theoretical methods of financial management are lack of proper understanding and research, which leads to confusion in financial management, lax financial monitoring and distortion of accounting information. Enterprises do not have or cannot establish an internal audit department, and even if they do, it is difficult to guarantee the independence of internal audit. On the other hand, the management ability and quality of enterprise managers are poor, and their management ideas are backward. Due to their own reasons, some enterprise managers failed to bring financial management into the effective mechanism of enterprise management and lacked modern financial management concepts, which made financial management lose its due position and role in enterprise management. (D) weak management foundation and lax internal control. Because the management mode of small and medium-sized enterprises integrates ownership and management rights, enterprises have great subjective arbitrariness in decision-making and management, and lack a set of relatively standardized and operable financial control methods. First, lax cash management leads to idle or insufficient funds. Second, the turnover of accounts receivable is slow and it is difficult to recover funds. The reason is that there is no strict credit policy and no effective collection measures, and accounts receivable cannot be cashed or bad debts are formed. Third, the inventory control is weak, resulting in sluggish funds. Fourth, money is more important than power, and the loss of assets is serious. Many managers of small and medium-sized enterprises have poor management of raw materials, semi-finished products and fixed assets, and their financial management responsibilities are unclear, resulting in serious waste of assets. (5) Low quality of accountants, lack of senior financial managers and unreasonable financial institutions. Most accountants in small and medium-sized enterprises have not received special and systematic knowledge education, and the phenomenon of taking up jobs without a license is extremely serious. Finance and accounting are not divided, there is no full-time financial manager, and the function of financial management is part-time by accounting or enterprise executives, which leads to internal management confusion and unclear responsibilities. II. Countermeasures and Suggestions for Strengthening the Financial Management of Small and Medium-sized Enterprises (1) Market-oriented and adopt scientific investment strategies. On the one hand, in order to avoid investment risks, small and medium-sized enterprises should manage their finances steadily and expand their scale in a timely manner. The growth of small and medium-sized enterprises is full of risks. The key to the development of small and medium-sized enterprises is sound financial management and scientific investment. High-risk projects and risk schemes with uncertain decisions should be avoided actively. In practice, small and medium-sized enterprises should adopt short-term investment mode as far as possible, strengthen the investigation and demonstration of investment projects, and constantly optimize investment plans. In addition, we should seize the favorable opportunity to achieve development and expand the scale. Secondly, it is to concentrate advantages and operate professionally. Small and medium-sized enterprises are weak, and they often can't manage a variety of products to spread risks. However, they can concentrate on specialized management by choosing market segments that can make enterprises give full play to their own advantages, increase market share and achieve commercial success. Thirdly, fill the gaps in the market with our own products, make full use of the flexible characteristics of small enterprises, and find the gaps in the market to invest, expand the space and develop in the direction of specialization according to the principle of "no one has me". On the other hand, the investment of small and medium-sized enterprises should be mainly inward investment. First, the investment in trial production of new products. The product market share of small and medium-sized enterprises is limited, and the fist products of enterprises also have a certain life cycle. If marketable new products are constantly put on the market and old products are constantly eliminated, they will always be in an invincible position in the market competition. Second, we should attach importance to the investment in the renovation of technical equipment as a long-term strategy of enterprises. Third, investment in human resources, especially the possession of management and technical talents, is a magic weapon for enterprises to win. Talents can be introduced through recruitment; You can also improve the skills and quality of existing internal personnel through training. (2) To optimize the external environment of enterprises and broaden the financing channels of enterprises, the government should improve the laws, regulations and related policies conducive to the development of small and medium-sized enterprises as soon as possible. At present, China has issued "Several Policy Opinions on Encouraging and Promoting the Development of Small and Medium-sized Enterprises" and "Small and Medium-sized Enterprises Promotion Law", which shows that China has made some achievements in this field. I hope the government can speed up the process, constantly improve policies and regulations, and give small and medium-sized enterprises equal opportunities to compete. Small and medium-sized enterprises can set up financial institutions, such as setting up small and medium-sized enterprise funds, so as to broaden the financing channels of enterprises and solve the financing problem to some extent. Establish credit guarantee system for small and medium-sized enterprises. SME credit guarantee is a service-oriented intermediary organization. The guarantee fee should not be charged at the expense of increasing the financing cost of SMEs. In the process of establishing the credit guarantee system, the credit guarantee system should be combined with other forms to provide diversified services for the financing guarantee of enterprises, thus providing financing opportunities and solving the financing difficulties of enterprises to some extent. The financial sector should become the driving force for the development of private economy. In order to give full play to the role of the financial sector, financial institutions should change their concepts, break through the barriers of traditional concepts and systems, speed up the reform of the credit management system, and adapt to the development needs of the private economy. The healthy development of market economy has injected great vitality into small and medium-sized enterprises. The financial sector should break through the concept, absorb and introduce international and domestic advanced financial products, such as patent loans and brand pledge loans, so as to better promote the healthy and rapid development of small and medium-sized enterprises, improve the loan decision-making procedures, and establish a credit approval mechanism suitable for small and medium-sized enterprises. It is necessary to establish a credit management mechanism that combines incentives and constraints to improve the credit marketing enthusiasm of credit personnel. (3) Changing the concept of enterprise financial management in an all-round way is the value of guiding the practice of financial management and the starting point of thinking about financial management issues. Facing the new financial environment, it is difficult for enterprises to win a place in the fierce market competition if they can't completely change their financial management concepts. Establish the concept of people-oriented financial management. Paying attention to human development and management is the basic trend of modern management. Every financial activity of an enterprise is initiated, operated and managed by people, and its effectiveness mainly depends on people's knowledge, wisdom and efforts. Therefore, in financial management, we should establish the idea of "people-oriented", abandon the concept of "material-oriented", understand and respect people, standardize the behavior of financial personnel, establish a financial operation mechanism combining responsibility and rights, and strengthen the incentive and restraint to people. The purpose is to fully mobilize people's enthusiasm, initiative and creativity in scientific financial management. Establish the concept of capital diversification and financial management. After China's entry into WTO, the capital market will be opened and the market entry threshold will be lowered. A large number of foreign banks and foreign-funded enterprises will be stationed in China, and a large number of foreign capital will flood into the China market. Small and medium-sized enterprises should seize this opportunity, actively seek cooperation with foreign capital, improve management level, realize diversification of investment subjects and optimize corporate governance structure. Establish the concept of risk financial management. In the modern market economy, due to the role of market mechanism, the interests of any market subject are uncertain, and there is the possibility of suffering certain economic losses, that is, it is inevitable to bear certain risks. In the era of knowledge economy, enterprises will face greater risks. In financial management, we should establish the concept of risk, be good at making scientific predictions about the uncertain factors brought about by environmental changes, and take various preventive measures predictably to minimize possible losses and improve our ability to resist risks. There are two important ways for small and medium-sized enterprises to guard against risks: first, to formulate detailed financial plans and determine uncertain factors through financial plans, so that enterprises can have a mechanism to cope with changes and reduce the impact of future risks; The second is to establish a risk prediction model to identify possible risks in a predictable and systematic way, so as to change passivity into initiative and nip in the bud. (4) Strengthen the management of funds and accounts receivable, strengthen financial control, improve the efficiency of fund operation, form a reasonable capital structure, determine a reasonable debt ratio, and make the best use of funds. While improving the capital structure, we should maintain a certain cash capacity, ensure the flexibility of daily capital use, prevent market fluctuations and loan difficulties, and determine the best cash holdings. Generally speaking, assets with strong liquidity have low returns, which means that enterprises should reduce idle funds as much as possible. Even if they don't invest in their own assets, they should invest in other assets that can generate income to avoid the losses caused by idle funds. When the actual cash balance of an enterprise is greater than the optimal cash holdings, strategies such as repaying debts and investing in securities can be adopted to adjust the actual cash balance. On the contrary, when the actual cash balance is less than the optimal cash holdings, short-term financing can be used to adjust the actual cash balance. Strengthen the management of accounts receivable. After the occurrence of accounts receivable, enterprises should take various measures to recover the money as soon as possible, otherwise they will have bad debts due to too long overdue time and make enterprises suffer losses. Analyze the aging of accounts receivable and prepare an aging analysis table to see how many debts are in the credit period and how many debts exceed the credit period. Enterprises should adopt different collection methods in different periods and formulate economic and feasible collection policies. For possible bad debt losses, they should withdraw bad debt reserves in advance and fully estimate the impact of this factor on profits and losses. Strengthen property control. Establish internal control system, improve property and material management, establish standardized operation procedures for material procurement, material acquisition and sample management, plug loopholes and maintain safety. Property management and recording must be separated in order to form a strong internal inspection. Asset management, recording, inspection and verification must never be entrusted to one person. It is necessary to make regular inventory, expose problems, and promote the improvement of management and the strengthening of responsibilities. Finally, check it irregularly, and urge managers and recorders to be vigilant and not to be negligent. (5) Strengthen the construction of accounting team and improve the management quality of all employees. At present, many small and medium-sized enterprises have unclear accounting accounts, distorted information and chaotic financial management; Business leaders often participate in corruption and bribery; Enterprises set up off-balance-sheet accounts and practise fraud, resulting in false profits and real losses or inflated profits. The reasons are as follows: first, the financial foundation of the enterprise is weak, the quality of accountants is not high, and they are subject to the leadership and cannot exercise their supervisory power; Second, the legal concept of enterprise leaders is weak, ignoring the seriousness and compulsion of financial system and financial discipline. In order to solve the above problems, firstly, small and medium-sized enterprises should strictly implement the employee pension and medical security system to attract senior financial managers to play a role in small and medium-sized enterprises. Second, enterprise accountants should strengthen training and ideological and political education, especially study accounting law, accounting standards and accounting system, enhance the supervision consciousness of accountants, and require accountants to hold certificates. Third, enterprise leaders should constantly improve their legal awareness and enhance their legal concepts. Only through the joint efforts of financial personnel, leaders and even all employees can we improve the operating conditions, financial management and competitive strength of enterprises. References: Zhang Ruijie. Discussion on Financial Management of Small and Medium-sized Enterprises in China [J]. Science and Technology and Economy, (). Yuxi SME Credit Promotion Association was established with the first batch of members [N]. Yuxi daily. -... Huang Liping. Problems and countermeasures in financial management of small and medium-sized enterprises in China [J]. Special economic zones, (). Bing Xu. 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