Financial Escalation In CFO'S Eyes

According to the survey of the status quo of financial management of Chinese enterprises by the headquarters of the international financial management association, most enterprises in China lack sufficient understanding of the importance of financial management and the role they should play.

In a large number of enterprises, the financial management department is regarded as a service department only, and the decision-makers and heads of financial departments generally lack a deep understanding of the financial management of enterprises in the market economy.

Among them, more than 75% of China's large and medium-sized enterprises' financial management team is still performing the most basic functions of traditional financial management. Most of the financial management work stays at the level of passive execution activities such as bookkeeping, accounting and so on.

Severe economic environment and backward development require Chinese enterprises to pform traditional financial management.

Through reform, traditional financial management functions will gradually weaken, and participation in decision-making, monitoring risk and creating value will gradually become the main function of financial management.

There is no coincidence.

The report on the employment situation of Chinese accountants under the economic crisis, conducted jointly by NASDAQ:JOBS and ACCA, shows that tight cash will urge employers to ask accountants to speed up their role pformation.

The accountants who participated in the survey generally felt the pressure of controlling costs and tight budgets.

Most of the 365 employers regard "cost control" and "tight budget" as the main means of maintaining operation.

They require that the finance department take the lead in taking actions according to the changes in cost and investment and formulate feasible contingency plans.

At the same time, 65% of employers believe that accountants should be responsible for the current business situation. At least, they should be aware of changes in the cash flow and remind managers.

If the functions do not improve and the roles do not change, there will no doubt be substitutions.

The original financial management framework also needs evolution.

Bell Sten, Merrill Lynch and Lehman brothers, three of Wall Street's five largest financial institutions, have been closed down.

Under such a chaotic situation, how to stabilize finance has become a topic of concern for various group enterprises and their parent subsidiary companies.

The construction of centralized financial management mode is a good choice.

CFO suggests that the original financial organizational framework of the group should be broken, for example, the "seven center" model.

1.

Investment management center.

The investment of group parent and subsidiary companies should be incorporated into the group's financial strategic planning, and the cash flow of various investment activities can be controlled through financial budget management.

The parent company should firmly control the decision-making management power and the disposal right of exceptional investment matters that have direct or potential impact on the development structure and control structure of the group.

Under the financial crisis, the parent company should strengthen the control over its own and its subsidiaries' investment projects, and abandon the projects with low revenue and slow occupation, so as to return the funds as soon as possible.

2.

Financing management center.

The parent company's finance department should highly centrally manage the external financing rights. The management responsibilities should include: the formulation, inspection and supervision of major financing matters; the monitoring group's asset liability ratio and borrowing risk; the compilation of cash flow budgeting for the whole group's financing activities; the implementation of total debt control and capital structure adjustment and optimization.

3.

Capital settlement center.

The capital settlement center centrally and uniformly manages the whole group's funds, including the unified management of the subsidiary's bank accounts, the adjustment of the surplus and deficiency in the group, the examination of the subsidiary's external payment quota, the extra budgetary payment and the application of the internal loan, and the control of the whole group's circulating capital stock and the total amount of accounts receivable.

Four

Operation monitoring center.

The group leaders should fully exercise the decision-making power of group capital changes and capital operation activities, and be responsible for the management and monitoring of the group capital operation process and capital operation activities by the capital operation and management department.

Five

Management center.

The tax administration department collects and collects all kinds of taxes, fees and funds in the group.

Six

。

The main contents of the parent company in the financial budget control system include: summarizing and compiling the whole group's financial budget, checking and monitoring the budget execution process and the situation, and putting forward suggestions for handling the deviation in the process of budget execution.

7. financial accounting management center.

In addition to formulating the unified financial and accounting system and policies of the Group subsidiaries, and checking and supervising the financial accounting work of various units within the group, we should also unify the management group finance department to send financial personnel and strengthen the construction of the group accounting computerization network system.

In addition, a financial analysis system for the whole group should be established to analyze and grasp the operation and financial situation of all units in time.

In this way, the seven department managers of the group CFO originally managed to follow people.