Financial Management of Small and Medium Enterprises

Paper Introduction: As an important part of the SME our national economy, China's economic development and social stability plays an important role in promoting. But in the process of development of their health, there was a considerable number of enterprises only pursuit of sales and market share, ignoring the core of financial management.
Keywords: SME, financial management, strategy

As an important part of small and medium enterprises of the national economy, China's economic development and social stability plays an important role in promoting. But in the process of development of their health, there was a considerable number of enterprises only pursuit of sales and market share, ignoring the core of financial management. It allows businesses to manage limited production and operation management structure into the role of financial management can not be fully realized. Causing it difficult to cope with the fierce market competition, and even endanger the survival. How to market economy conditions, seek healthy development of SMEs, and establish a strengthened financial management as a symbol of a modern enterprise system, scientific capital operation, is cause for concern.
1. The financial management of SMEs 1.1 Problems financing difficulties, a serious shortage of funds for SMEs At present, China initially established a relatively independent channels pluralistic financing system, however, difficulties in financing, guarantees difficult to restrict the development of SMEs is still the most prominent issues. The main reason: first, excessive debt and high financing costs, risk, resulting in SME credit rating is low, relatively poor credit. Second, countries do not have dedicated SME management support institutions, the state preferential policies to SMEs is not inclined to make long-term disadvantage. Third, most small and medium non-state-owned enterprises, some banks are subject to the influence of traditional ideas and administrative intervention was not keen enough on its loans. Fourth, the lack of financial management strategies.
1.2 First, weak financial controls cash management lax, resulting in unused funds or insufficient. Some SMEs think that cash as possible, resulting in idle cash, did not participate in the production turnover; lack of funds, some companies use to schedule, taking into account seasonal price fluctuations sided, excessive purchase of real estate, management can not cope with much-needed capital, financial trouble. Second, the accounts receivable turnover is slow, resulting in the recovery of funds difficult. Third, inventory control is weak, resulting in sluggish capital. Free papers reference network. Fourth, the money is not heavy weight, a serious loss of assets waste.
1.3 is difficult to avoid the trap of over-indebtedness of financial liabilities can be said is a typical high-speed growth of enterprises common problem, but also the root causes of the financial crisis. Strategic demand effects from the strategic layout of your enterprise drive, or the performance of the development of the existing business, the size and number of expansion often significantly faster than the expansion of the connotation of quality, high-growth stage will be some degree of shortage of funds. Therefore, high-growth companies to achieve rapid expansion purposes, generally take debt management strategy.
2. The causes of the problems 2.1 The financial management system is determined by the economic management of the company's financial management, business process from a socialist planned economy to a socialist market economy. Forty years, corporate summary financial results can be summarized as four processes: First, summarize the process of achieving profitability; the second is the process of summary profits; the third is a summary of the process of achieving taxes; four is a summary of placement social employment process.
2.2 Government's decision to conduct business as companies are not legal personality entity, but as a government appendage. Therefore, from the business start-up, determined to purchase the appointment of operators, plant site location, equipment, and production projects, Workforce composition, raising funds for production of iron, raw material requirements for the organization of fuel, operating results, no Do not rely on 'red tape' and the executive heads of the 'green light.' This government has decided to conduct business management practices, will inevitably produce blindness. Free papers reference network.
2.3 financial management system is not perfect due to the business regardless of market orientation, must loosen economic accounting, not to sound financial management. In recent years have been some strange phenomenon, because the accountants are not hiring, unpaid work outside the home, business partially stopped, and financial officers no work, no corporate year-end financial statement preparation. In this regard, the financial sector can be responsible for the preparation of the financial period wages report, the accountants prepare financial statements back to complete the year-end accounts compilation of the financial sector, to facilitate the escalation of the overall financial statements.
3. Solve the problem in the financial management of SMEs measures 3.1 3.1.1 Government Transformation external environment conducive to the development of SMEs should improve as soon as the relevant laws, regulations and policies At present, China has issued 'to encourage and promote the development of SMEs The number of policy advice ',' SME Promotion Law 'is also forthcoming, we can see our work in this area has achieved some results, I hope the Government can speed up the process, continue to improve policies and regulations, to SMEs more equal competition opportunities.
3.1.2 establish a good credit awareness SME financing problems largely because of credit for SMEs in the community is relatively poor, so its banks are reluctant to provide loans, in the face of such adverse situation, companies should strive establish a good image in the community, to strengthen the mutual understanding of each other, at the time of maturity of the loan to repay the principal and interest on loans, to comply with the credit, the basis for the work carried out in the future.
3.1.3 the establishment of SME credit guarantee credit guarantee system for SMEs based services for the purpose of intermediary organizations, rather than profit as the main purpose of a guarantee fee can not be to increase the cost of financing small and medium enterprises at the expense of establishing credit provide a variety of services for the financing guarantee business process should guarantee system of credit guarantee system and other forms together.
3.2 companies to hard skills, strengthen financial management and strengthen financial control 3.2.1 awareness, to strengthen the implementation of financial management as an important part of the modern enterprise system, the implementation of the various functional departments within the enterprise. The use of working capital was involved in all aspects of the enterprise, business owners should change their ideas, recognizing tube good use, good control of the funds is not only the responsibility of the finance department, but to the various departments of enterprises, production and operation of various aspects event. So to every level, common management of corporate funds to contribute.
3.2.2 efforts to improve efficiency in the use of funds, make use of funds to produce the best results. To do this, first make the source of funds and the use of effective cooperation. Secondly, the accurate prediction of the funds and pay back time. Free papers reference network. Finally, reasonably allocate funds, working capital and fixed capital occupation should be reasonable combinations.
3.2.3 strengthen property control. Property management and records must be separated to form a strong internal check, never able to asset management, records, inspection checks and handed over to a person to do. Regularly check inventory, in order to expose the problem and promote the strengthening of management improvement and accountability.
3.3 optimize the financial structure, balance high growth and healthy development of enterprises optimize the financial structure is the key to financial stability, the specific sign is comprehensive and low cost of capital, financial leverage, high efficiency, moderate financial risk. Enterprises should be based on changes in the business environment, to ensure a dynamic and constantly optimize the financial structure through stock adjustments and variable adjustment (increment or decrement) means. Corporate financial structure management focus is on capital, liabilities, assets and investment in restructuring to maintain a reasonable proportion:
3.3.1 optimize the capital structure. Enterprises should be determined between equity capital and an appropriate proportion of debt capital structure, the debt level will always be maintained at a reasonable level, should not exceed their carrying capacity. SMEs limited business scale, the ability to bear the financial risk is relatively low, therefore, form a reasonable capital structure, determine a reasonable debt ratio is particularly important.
3.3.2 optimize debt structure. Liability management is focused on the structural debt maturity structure. Because of expected cash flows is difficult to maintain harmony with maturity and amount of debt, which requires companies to allow cash flow fluctuations in the premise, to determine the maturity structure of debt should be kept safe margin.
3.3.3 optimize the asset structure. Optimize the asset structure is primarily determined not only to maintain a normal production and operation, but also at a reduced or no increased risk to the enterprise premise as much liquidity level of profits, the core index is a reflection of current assets to current liabilities the difference between 'net working capital.'
Therefore, professional training of accountants and political and ideological education, in particular to strengthen accountants professional ethics and professional discipline, and enhance the supervision of accountants consciousness. Second, to the full quality education, generally improve the quality of employees. By the business leadership and focus on management, to strengthen the business management knowledge and learning, education, conduct legal education in the enterprise, improve the overall legal awareness, enhance their legal awareness.

References
[1] Di Shengxia. On the New Situation and Countermeasures SME Financial Management. Economist, 2007, 6.
[2] Zheng Hai Yuan strengthen financial management of SMEs countermeasures Guangxi accounting, 2008.
[3] Problems Miss Scarlet and medium enterprises in the financial management of the East China Economic Management, 2007,5.
[4] Pengshan Li. Problems and Solutions in SME Financial Management. Hunan Business College, 2006, 7.

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