Characterization Of Failure Of Financial Management In Small And Medium Sized Enterprises

1. SMEs often focus on production and sales, ignoring financial management.

Due to the lack of professional management personnel, small and medium-sized enterprises often focus on production and sales, light management and internal management.

Especially in the period of economic prosperity, small and medium-sized enterprises are more likely to ignore financial management in the face of a large number of alternative market opportunities.

Once the economic climate changes and the market competition is fierce, the consequences of SMEs' neglect of financial management will be fully exposed.

Because SMEs will be troubled by overstock and accounts receivable on the one hand during the economic downturn. On the other hand, they will face difficulties in raising short-term funds.

Two

Weak working ability.

Suffer

As for the limits of production scale and talent resources, the financial management institutions of small and medium-sized enterprises are very simple, their professionalism is not strong, and the internal control is weak.

Small and medium-sized enterprises have weak accounting practices, and accounting systems are usually not sound.

Due to the lack of attractiveness to excellent financial managers and the poor quality of accountants, the highest decision-makers are hard to understand the role of financial management and financial analysis correctly, ignoring the relationship between production, management and efficiency.

3. lack of internal

Randomness is greater.

Compared with large enterprises, the management level and related capital turnover rate of SMEs are relatively low. Small and medium enterprises often lack the strict capital utilization plan, lack of necessary internal control system with inventory management and paction settlement, and so on.

In addition, small and medium-sized enterprises, because of their limited scale and single structure, do not have the capability of internal capital allocation of large enterprises.

In addition, the accounting quality is not high, the management history is not long, and the financial information is not enough.

4., it is difficult to apply scientific and effective analytical tools.

It is difficult to adopt scientific and effective analysis tools to conduct financial management, such as a scientific and effective analytical tool, which is generally recognized as a scientific and effective analytical tool. The cash flow discount analysis is difficult to be adopted in small and medium enterprises. The reasons are: first, the management resources of small and medium enterprises are scarce; the operators can not use scientific decision analysis tools without good professional training; secondly, because of the simple organization and management behavior of SMEs, the operators are poor in dealing with daily affairs and do not have enough time to make use of discount analysis technology. Enterprises adopt simple analysis as a rational economic behavior; thirdly, the analysis cost of discount technology is too high; fourthly, the primary concern of small and medium enterprises is survival, paying attention to the recent rather than long-term cash flow. Small and medium enterprises are internal and external.