Abstract: In the process of enterprise merger and acquisition, financial integration is the core link. Financial integration is mainly the unified management of enterprise financial system and accounting system after merger and acquisition. Aiming at the realization path of financial integration effect after enterprise merger, this paper first introduces the related concepts of enterprise merger and financial integration, then expounds the principle requirements and integration mode of enterprise financial integration, summarizes and analyzes some problems in the realization of financial integration effect after enterprise merger, and makes in-depth discussion and analysis on the realization path of financial integration effect after enterprise merger.
Keywords:: enterprise mergers and acquisitions financial integration effect integration mode implementation path
As an important form of modern enterprise capital operation, M&A is also a common activity in the process of large-scale development of enterprises. M&A can promote the optimization and adjustment of enterprise industrial structure and improve the level of resource allocation. For enterprise mergers and acquisitions, the success of mergers and acquisitions mainly depends on the integration after mergers and acquisitions, and the key to mergers and acquisitions integration lies in financial integration. Only the successful completion of financial integration can ensure the successful completion of the merger and acquisition objectives of the whole enterprise. However, the post-M&A financial integration is a very complicated work, and we must attach great importance to the important role of financial integration in M&A. Through the financial collaboration after M&A, we can further reduce the post-M&A financial risks, improve the utilization level of financial resources, enhance the financial management ability of enterprises, and then promote the maximization of enterprise value after M&A through financial integration.
1 Overview of related concepts of enterprise merger and financial integration
Merger and acquisition (M&A) mainly refers to the behavior that an enterprise acquires another enterprise or institution with independent management rights and independent property rights by paying cash, transferring equity, transferring debt or issuing bonds, so as to grasp the resource advantages of the other party through M&A and realize the maximization of enterprise value after M&A. The motivation of enterprises to implement M&A is mainly reflected in the following aspects: First, to achieve economic or financial cooperation through M&A, That is, to acquire upstream and downstream enterprises or enterprises with the same level of development through cash or securities, further expand the scale of enterprises, improve their capacity and production efficiency, extend the industrial chain, and promote the integration and diversification of enterprise development. Secondly, M&A can realize the diversification of enterprise investment, especially for enterprises in the period of high growth. Because there is no complete and mature market system, M&A can further improve the enterprise market system and reduce the risk of enterprise operation and development. Third, relying on mergers and acquisitions can effectively enhance the market share of enterprises. For similar products or services in the enterprise's field, it can further enhance the market share of the enterprise and increase the market share, which is also of great significance to improve the brand value of the enterprise. Fourth, relying on mergers and acquisitions can realize the adjustment of the enterprise's own development strategy, especially relying on the superior resources and strength of enterprises to develop advantageous industries, which is very conducive to further strengthening the market competitiveness of enterprises.
Financial integration is an important content of post-merger integration of enterprises, and it is also an important path to realize the strategic development of enterprises after merger and acquisition. The concept of financial integration is mainly to comprehensively integrate financial objectives, financial structure, accounting, fund management, assets and liabilities, etc. According to the relevant requirements of enterprise accounting standards, improve the efficiency and quality of financial management, and finally realize the financial synergy effect of enterprises. In fact, the financial integration after merger and acquisition is to optimize, adjust, reform and improve the financial management system of enterprises in an all-round way. The importance of financial integration is mainly reflected in the following aspects: First, the effect of financial integration is directly related to the smooth realization of enterprise mergers and acquisitions. Only perfect financial integration can establish a perfect financial framework within enterprises, which is very important to promote the standardization and institutionalization of financial management after mergers and acquisitions. Second, financial integration is an important way to optimize the financial resource structure of enterprises. Through financial integration, we can effectively deal with the cost management, asset structure optimization and capital turnover investment efficiency after enterprise merger and acquisition management, so as to promote the realization of the synergistic effect of enterprise financial management. Thirdly, financial integration is a systematic project, which involves the utilization of financial resources and the transmission of financial information within the enterprise, and is also the key to promote the smooth realization of the strategic development goals of the enterprise.
2 Overview of the process and mode of financial integration after M&A
The financial integration process after the implementation of M&A mainly includes the following aspects: First, accurately define the strategic objectives of M&A integration, further refine and determine the financial integration objectives of enterprises according to the overall strategic objectives after the merger, and at the same time, according to the differences in financial resources between the two companies after M&A, prepare to integrate and form the financial management team of enterprises after M&A, and clearly refine the post responsibilities and post personnel of financial management. Secondly, conduct a comprehensive review before the financial integration of enterprises, and make clear the control indicators in the process of financial integration. The key point is to accurately understand the financial situation and specific financial data of both parties before financial integration, analyze financial data and evaluate financial risks. Third, according to the comprehensive financial management system, further establish and improve the corresponding financial supervision system.
In the process of merger and acquisition, it is very important to determine the financial integration model of enterprises. At this stage, the more common financial integration modes after M&A are as follows:
First, the transplant model. Transplant mode is mainly suitable for both sides of enterprise merger and acquisition. One party's overall strength is relatively strong, and it is more mature, advanced, scientific and reasonable in financial management mode, financial operation mode and financial fund management, and directly applies the financial management system of the merged enterprise of both parties to the financial integration mode of the merged enterprise. The biggest advantage of financial integration by transplanting mode is that the financial integration is faster, and the merger can be completed quickly in a short time, and then the merged business activities can be carried out. However, the financial transplantation mode belongs to rapid integration, so it is difficult to objectively and deeply understand the financial situation of the merged enterprise, accurately predict the possible financial management problems after the merger, and scientifically guide the formulation of financial risk control measures.
Second, the integration model. In the process of M&A activities, if there are great differences between M&A enterprises and the merged enterprises in financial management, financial organization, financial system and financial activities, if M&A enterprises insist on the financial management reform of the merged enterprises according to the M&A enterprise model, it is likely that various irreconcilable contradictions will appear in the post-merger business process. However, the integration mode is mainly to integrate the financial management advantages of M&A enterprises into M&A enterprises by establishing financial integration institutions and on the basis of in-depth understanding of the financial situation of both M&A enterprises, so as to realize the coordination of financial management and the overall synergy through financial integration.
Third, discrete mode. Separation mode is mainly suitable for M&A activities. M&A enterprises are not closely related to the acquired enterprises in business. M&A enterprises and acquired enterprises are relatively independent, and both have relatively independent financial management systems in enterprise management. At the same time, M&A mainly carries out capital supply and capital operation. In this case, the M&A of enterprises often adopts the separation mode.
3 Analysis of the problems existing in financial integration after enterprise merger and acquisition
3. 1 Ignore the implementation of financial integration in the process of enterprise mergers and acquisitions
Financial integration plays a vital role in the success of M&A, but at this stage, many enterprises often fall into misunderstanding in the specific implementation process of M&A, especially some enterprises are lucky in the M&A process center, and some enterprises often blindly expand their business development scale or realize short-term profits in the M&A process, but they have not yet formed a systematic and accurate understanding of M&A objectives and financial integration implementation, and even some enterprises slack off in M&A and fail to implement financial integration.
3.2 lack of strategic thinking in the process of financial integration of enterprise mergers and acquisitions
In the process of financial integration of enterprise merger and acquisition, it is necessary to preliminarily determine the strategic objectives after merger and acquisition to ensure that the follow-up work after merger and acquisition can be carried out in accordance with the established objectives of the enterprise. However, at present, many enterprises often ignore the strategic planning of financial integration in the process of financial integration after mergers and acquisitions, which often leads to blindness in the process of financial integration after mergers and acquisitions. Moreover, due to the lack of financial integration planning, the strategic objectives between M&A enterprises and the merged enterprises often differ, even there is a big gap with the expected objectives before M&A, which leads to the failure of M&A.
3.3 post-merger financial integration is not balanced enough
After M&A, the content of financial integration is relatively more, involving financial objectives, financial institutions, financial systems, assets and liabilities, performance evaluation and financial personnel. However, some enterprises did not establish a perfect financial integration implementation system during the M&A period, which led to the uneven promotion of various tasks in the process of financial integration and the uncoordinated docking of financial integration after the M&A. In addition, in order to ensure the smooth progress of financial integration after the merger, it is often necessary to hire a professional accounting firm to evaluate financial information and financial status. However, in the process of promoting M&A, many enterprises do not make full use of the role of intermediary agencies such as accounting firms in order to reduce and constitute costs.
3.4 There are hidden risks in the process of financial integration.
There are various hidden risks in the process of enterprise merger and acquisition. On the one hand, there are many uncertain factors in financial integration, and many factors, such as business cycle, investment strategy, business value, changes in human resource costs and so on, may have an impact on financial integration. On the other hand, the information asymmetry in the process of enterprise merger and acquisition, especially the inaccurate grasp of the asset quality, potential liabilities or financial structure of the merged enterprise, often leads to the inability of the merged enterprise to accurately grasp the authenticity, integrity and comprehensiveness of the financial information of the merged enterprise, and may affect the implementation of financial integration due to misjudgment.
4. Research on the implementation countermeasures of financial integration after M&A.
4. 1 unifies the financial integration goal after enterprise merger and promotes the realization of synergy.
After carrying out M&A activities, enterprises should focus on the strategic development goals of enterprises, that is, improving the core competitiveness of M&A enterprises and merged enterprises, promoting the maximization of enterprise value after M&A, further clarifying the financial integration goals of enterprises, focusing on clarifying the advantages of financial resources of both M&A enterprises and realizing the financial synergy effect of enterprises. In order to achieve this goal, the financial integration of enterprises should be carried out step by step, and implemented step by step according to the principle of consistent financial integration objectives, coordination and unity, and cost-effectiveness. In the specific implementation process, M&A enterprises should organize financial departments to deeply grasp the actual financial situation and business essence of the merged enterprises, further strengthen the integration of M&A and the merged enterprises, and reduce the possible risk problems in the financial integration of M&A.
4.2 Improve the enterprise financial management system and realize the unification of enterprise financial requirements.
In terms of financial integration, the first task is to make more efforts in clarifying the rules and regulations of financial management of enterprises after mergers and acquisitions, especially to further improve the examination and approval management system of enterprise fund management after mergers and acquisitions, such as fund raising management, project investment management, fund use management, etc., and to refine and clarify financial accounting, asset disposal, depreciation, impairment treatment, debt repayment preparation, etc. involved in production and business activities. In the aspect of financial unification, it is crucial for M&A enterprises to define their daily financial management activities with a unified financial management system. Through the arrangement of the financial system, after the merger, enterprises can accurately grasp their financial culture and financial standards, and fully grasp their assets and liabilities. At the same time, according to the development and changes of market conditions, they can calculate the equity assets and liabilities of the fair value accounting of the merged enterprises to ensure the accuracy of the accounting of their financial statements. After mergers and acquisitions, we should also improve the financial system of enterprises according to the basic post setting principles of financial accounting in the Accounting Standards for Business Enterprises and related regulations. At the same time, according to the actual operation of enterprises after mergers and acquisitions, we should revise and improve the financial system, especially the information disclosure system for enterprises, and disclose financial information such as financial statements, current accounts and inventory lists to guide scientific financial decisions.
4.3 Streamline the organizational structure of the enterprise and appoint the person in charge of finance.
Usually, before financial integration, there is a big gap between M&A enterprise and the merged enterprise in organizational structure, so it is necessary to optimize and adjust the financial accounting department, cashier position and audit supervisor of the merged enterprise, especially to streamline and improve the financial organization after merger and integration. At present, many enterprises have adopted CFO management mode under the unified leadership of M&A enterprises in financial integration after M&A. In this way, the unified financial leadership of M&A enterprises has been strengthened, the rights and responsibilities of financial positions have been clarified, and the efficiency of financial management has been effectively improved. In the specific setting of the financial organization of the merged enterprise, under the supervision of the board of directors, a chief financial officer is set up, who is mainly responsible for the setting of financial institutions, the allocation of financial personnel, the decision-making and implementation of financial management. At the same time, a chief financial officer is appointed to the merged enterprise to participate in major decisions related to the financial management of the merged enterprise, supervise and manage the daily financial management, and regularly report the business management status of the merged enterprise to the company headquarters. Submit financial statements regularly, so as to timely and accurately grasp the specific situation of the business operation and financial operation of the merged enterprise, and then promote the realization of the financial integration goal. In this way, it can not only ensure the stability of the financial team of the merged enterprises, but also further strengthen the role of financial management services and financial supervision.
4.4 Unify and improve the financial accounting management system of the post-merger enterprises.
In the process of enterprise merger and acquisition, the difference of financial accounting management system standards between the merged enterprises and the merged enterprises is a common problem. In order to ensure the smooth progress of financial integration, the financial accounting management system of the merged enterprise and the merged enterprise should be unified. In this regard, in the process of implementation, we should take the accounting standards and accounting system for enterprises as the basic mode of financial integration, establish a standardized and unified accounting system for enterprises, and establish a set of account management mode to ensure the timeliness and accuracy of consolidated financial statements after mergers and acquisitions. In terms of specific financial links after enterprise merger and acquisition, we should pay more attention to various disclosures in financial statements, the specific proportion of enterprise capital structure, the accounting of major asset transfer of enterprises, and internal transactions of enterprises, and establish a unified and standardized enterprise financial accounting system within enterprises.
4.5 Improve the centralized management and control mode of enterprise funds, and improve the efficiency of the use of enterprise funds after mergers and acquisitions.
Mergers and acquisitions are often in a period of rising development. If the fund management is improper, it is easy to cause financial risks due to the fund problems after the merger. Therefore, it is necessary to establish a perfect fund management model within enterprises to further improve the speed and efficiency of capital turnover. First of all, the enterprise should set up a perfect fund management department within the enterprise, establish an internal bank to adopt a centralized fund management model, and specifically control and manage the funds in all aspects of fund raising, investment and business activities of the enterprise after the merger. At the same time, in order to speed up the capital turnover and operational efficiency, we can implement hierarchical management in the internal capital management of enterprises and conduct a unified audit of the funds after mergers and acquisitions. Secondly, in terms of financial integration after M&A, we should pay attention to further strengthening capital projects with relatively strong liquidity, such as cash and deposits, and further improve the cash turnover rate of enterprises. At the same time, we should manage funds according to the amount of capital budget to ensure that the business development of enterprises can obtain sufficient financial guarantee.
4.6 Do a good job in the integration of stock assets and liabilities in financial integration.
In terms of asset integration, we should first identify assets, take the assets of M&A enterprises as the basis of asset integration, pay attention to absorbing good assets and stripping off bad assets, ensure that all assets play an active role in the production and operation activities of enterprises after M&A as much as possible, and reduce all kinds of idle assets or useless assets. This can not only effectively improve the utilization efficiency of assets of enterprises after M&A, but also effectively improve the asset-liability ratio of enterprises, which is of great significance to enhancing the development vitality and overall strength of enterprises. In terms of debt integration, the focus is on optimizing the capital structure of enterprises and paying attention to appropriately reducing the debt pressure after mergers and acquisitions. Specifically, for accounts receivable formed in the process of business development, such as accounts payable, accounts received in advance, taxes payable, other payables, etc., we should pay attention to converting various short-term liabilities into long-term liabilities or converting liabilities into equity in various ways to avoid financial pressure caused by short-term debt repayment.
To enhance the financial integration effect after enterprise merger and acquisition, we should attach great importance to the importance of financial integration, improve the modern enterprise system design after enterprise merger and acquisition, strengthen the integration of objectives, accounting, assets and liabilities, risk management and evaluation in the process of financial integration, realize the enterprise integration effect, synergy effect and economies of scale, and promote the promotion of enterprise market value.
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