In China, small and medium-sized enterprises are generally private enterprises, their cash and management is mostly in charge of the owner of the enterprise, rarely with modern scientific and reasonable management methods to control the inflow and outflow of funds, resulting in unscientific use of cash management is not reasonable, which in turn appears two extremes, mainly in the following: On the one hand, by the investment-driven growth model. Enterprises diverted working capital for investment in fixed assets, such as the proportion of investment in the purchase of plant and equipment has increased year by year, as well as for the development of accounting information technology to purchase a large number of computers and other office equipment, which greatly exceeded the liquidity of the ability to withstand, exacerbated the shortage of liquidity, liquidity shortages of the contradiction is more pronounced, and financial difficulties; on the other hand, some small and medium-sized enterprises think that the more the better, the more the better, the more the enterprise idle cash reserves, the more the better. The more the better, the enterprise idle funds deposited in the bank, rather than applying in the production and operation activities, resulting in idle cash, the stock of cash has not been revitalized, greatly reducing the enterprise's earnings.
Many small and medium-sized enterprises do not prepare a cash flow plan, their management of cash is largely arbitrary, and rarely use the cash flow plan in business operations. Cash plan this important management tool is ignored by many enterprises, a scientific and practical management approach in reality is put on the shelf. In China's small and medium-sized enterprises, the preparation of cash plans accounted for a small proportion of enterprises, which shows that enterprises only pay attention to sales and profits, and cash management has not been mentioned to the due height. The result is that once the market changes, the economic environment changes it is difficult to make the cash fast turnover, so that enterprises into the situation of insufficient funds, a fatal threat to the enterprise's continued production and operation.
3.1.2 Accounts receivable clearance is not timely
With the development of the economy, credit sales will become more and more common, especially in the case of fierce competition, the small and medium-sized enterprises in order to resist the pressure of the large enterprises, based on the expansion of sales, compete for the market competition needs, the enterprise has no choice but to use to reduce the credit standard of the credit to compete for customers, the competition is the result of the recovery of accounts receivable risks. The result of competition is an increase in the risk of accounts receivable recovery. Coupled with unsound internal management control mechanisms and poor credit risk management, this has resulted in a large number of accounts receivable deposits, which is very likely to lead to an increase in the risk of bad debts and make the enterprise's capital turnover ineffective. At present, due to various reasons such as market downturn and global financial crisis, the risk of recovery of accounts receivable of enterprises has increased and a large amount of capital has been occupied. Due to the lack of liquidity, it leads to the tightness of the enterprise's capital chain, and a vicious circle is formed between the lack of liquidity and the increase of accounts receivable. If accounts receivable eventually become bad debts, it will reduce the enterprise's liquidity substantially.
3.1.3 Long inventory turnover cycle, resulting in stagnant funds
In terms of inventory, the main reasons that can easily lead to the precipitation of current assets are: First, lack of sufficient understanding of the increasingly diversified market, the lack of science in the production and operation of the decision-making process; do not pay attention to the quality of the product, low production efficiency, production consumption; inventory management mode is outdated and focuses on the form, light on the practical effect; the enterprises keep on Transfer of goods, the precipitation of assets to each other, resulting in the value of the false value-added, resulting in part of the backlog of goods and can not realize the final sale; liquidity flow and immobility, long-term stagnation in the field of inventory, leading to the emergence of the enterprise liquidity micro turnover of the macro stagnation of the situation. Secondly, there is no scientific management method, no inventory plan, no inventory regular supervision and inspection system, the daily inventory control is not in place, did not determine a reasonable amount of inventory reserves, occupying a large amount of funds, resulting in many small and medium-sized enterprises end of the month, inventory occupying funds are often more than its turnover more than twice the result is not only lead to a shortage of liquidity, affecting the normal operation of the production and management, but also lead to stagnation of funds and The result is not only a shortage of liquidity, affecting the normal operation of production, but also lead to stagnant funds, poor turnover, affecting the efficiency of funds. Because inventory in the short term is not easy to show the problem, so some companies do not pay attention to it, weekdays, negligent management, found that the problem of major problems inappropriate treatment, and ultimately lead to huge losses.
3.2 Insufficient capital and blind investment caused by capital constraints
3.2.1 Enterprises have a serious shortage of their own funds, liquidity ratio is unreasonable.
Small and medium-sized enterprises in the construction, due to less own funds, after meeting the equipment, plant and other infrastructure construction, often for the later production and operation of liquidity shortage, the enterprise also does not have the ability or channels to expand the production of necessary liquidity, resulting in insufficient liquidity of the enterprise.
China's long-term implementation of the enterprise is a high tax burden system, the enterprise retains less than 10% of the profits, many enterprises have to solve the problem of enterprise retirees' medical expenses, etc., especially the state-owned enterprises to accumulate less, so that the enterprise's lack of free liquidity, if not supplemented in a timely manner, it will affect the sustainable development of enterprises. Foreign financial experience data management generally believe that the liquidity ratio should be 2:1, that is, liquidity accounted for about 50% of the total funds, liquidity should be solved by long-term financing methods. And the status quo of China's enterprises is: the vast majority of enterprises in the current assets occupied by more than 90% of the funds rely on short-term financing, some enterprises current ratio is even lower than 1:1, so theoretically, as long as the bank is not willing to bear the risk of business operations, the enterprise can not expect to obtain through the bank to obtain all the liquidity needed for production.
3.2.2 Blindly expanding production, crowded working capital
Enterprises blindly expanding the scale of production, a large amount of working capital for investment in fixed assets, so that the enterprise long-term occupancy of working capital, while the enterprise retains a limited amount of profit, and self-accumulation is small, and the narrow channels of financing, resulting in the working capital accounted for the smaller and smaller proportion of the total funds, resulting in the enterprise tired of borrowing, debt repayment, thus affecting the normal operation of enterprise production. The production and operation of the enterprise is carried out normally.
3.3 Insufficient experience in enterprise management lack of internal management mechanism and institutional norms
3.3.1 Poor enterprise management caused losses, decision-making errors caused by the loss of funds.
Small and medium-sized enterprise owners are often the company's operators and beneficiaries, by the limitations of its business management concepts, business management is often errors or omissions, not only cause business losses, operating funds can not value-added, but also cause a large loss of business funds.
Enterprise financial management is weak, most enterprises are in the after-the-fact accounting stage, the lack of management of the enterprise's financial activities. Small and medium-sized business model can not adapt to the requirements of the market, management tools, backward, resulting in business losses; lack of investment decision-making research, investment decision-making arbitrariness, quick success, operating high-risk business, resulting in economic losses, crowding out the production funds.
Many managers of small and medium-sized enterprises, raw materials, semi-finished products, fixed assets and other management is not in place, no one to pursue the problem, a serious waste of assets. Enterprise internal control is not strict, property and materials from the purchase, consumption, production and sales of various aspects of the operating procedures are not standardized. As a result, the phenomenon of waste and loss of property and materials is extremely serious, leading to unnecessary loss of liquidity, exacerbating the shortage of liquidity.
3.3.2 Insufficient attention to cash forecasting management
The lack of cash forecasting management is mainly due to the lack of necessary understanding of the effective means of cash flow planning. From the point of view of the internal environment of the enterprise, there are two main constraints on the application of cash flow planning in the enterprise. On the one hand, the relevant personnel in the enterprise lack the knowledge or skills in this area. On the other hand, the management personnel of the enterprise do not understand this management method, or do not attach importance to this management work; From the viewpoint of the external environment of the enterprise, many enterprises are either ignorant of or do not attach importance to the scientific management method of cash flow plan. Affected by the traditional concept of planned economy, enterprises only pay attention to sales and profit targets, and the recovery of cash is in a secondary position, there is no commercial credit between enterprises, because after the sale of goods by the bank is responsible for supervising the recovery of the payment, the enterprise needs cash can be obtained at any time to the bank loan.
However, in today's socialist market economy, the business environment has changed dramatically, the state of small and medium-sized enterprises to carry out property rights reform, clear property rights, can not interfere with the normal exchanges between enterprises. Enterprises mainly rely on the purchase and sale of the two sides of the negotiation to deal with all kinds of relations between enterprises, cash is abundant or not entirely by the enterprise's own business policy decision. At present, China's small and medium-sized enterprises on the rough management of cash mode can not adapt to the competitive situation of small and medium-sized enterprises. Small and medium-sized enterprises to ensure that there is enough cash to pay loans and a variety of costs, it is necessary to strengthen cash management, and cash receipts and disbursements plan is an effective means of cash management.
3.3.3 Weak Awareness of Credit Management
The general neglect of credit management in domestic enterprises has led to a reduction in the cost of breach of trust, which has made the lack of credit a common phenomenon. From the viewpoint of the internal environment of enterprises, the business management personnel of enterprises lack of knowledge of credit policy, or pay no attention to it, credit conditions are not regarded as a major business strategy, the lack of prior scientific planning, within the enterprise, accounts receivable management lack of organizational guarantee, even if the credit scale of the enterprise often does not have special personnel to engage in this management work.
From the point of view of the external environment of enterprises, even if enterprises attach importance to the formulation and application of credit policy, when judging the creditworthiness of customers, due to the lack of corresponding social institutions or departments to provide corresponding services for enterprises, enterprises have to pay higher costs for this. Thus, enterprises are forced to give up this important part of management.
At present, many enterprises in China have a very weak sense of credit, small and medium-sized enterprises account for the vast majority of the total number of enterprises in the forefront of commodity production and exchange, the trend of credit crisis in the economic exchanges is getting worse, seriously affecting the development of small and medium-sized enterprises.
3.3.4 Low quality of management personnel, the lack of internal management mechanisms and institutional norms
Management personnel with low cultural level is a problem in small and medium-sized enterprises, in small and medium-sized enterprises, the proportion of the number of people in management with tertiary education or above more than 10 percent of the enterprise is only 11.7 percent; less than 5 percent of the enterprise has more than 60 percent. Enterprise management is a highly specialized work, and in most small and medium-sized enterprises in the enterprise shareholders are both bosses and operators, many of them do not know how to operate, do not know how to manage, over time will lead to leadership management failure and ineffective.
There is no or lack of a set of scientific, reasonable and very strong operational management rules and regulations, may also have some rules and regulations in the company, and these systems themselves lack of reasonableness, and even less operability, or the system can only constrain the ordinary staff, and the senior leadership is not binding on the shareholders of the enterprise and the main leader of the friends, family members of the power will rely on the power of the not very comply with the rules and regulations, the leadership is not held accountable, and the leadership is not the only one, but the shareholders are not the only ones who have the power of the company. The system will not be pursued by the leadership, which will seriously affect the enthusiasm and motivation of the ordinary employees, and the system will be in vain in the long run.
The organization and management structure of the enterprise is not clear, the division of labor is unreasonable, mainly because the enterprise set up the work position is unreasonable, many private enterprises are not set up for the matter, but set up for the matter.
Lack of supervision and constraints and incentives. The company does not have a set of effective supervision of those senior managers and in key positions, the constraints of the standardized system or measures, but some small mistakes made by ordinary employees are not soft to sanction, the contributions made to the company, long-term in the business of hard work, burying their heads in the work of employees without rewards and incentives, in the employee's wages and salaries, no increase or adjustments, which will lead to the decline in the work of the employee's motivation. Decline in motivation.
Small and medium-sized enterprises lack of scientific and effective cost control system, a considerable portion of enterprises in the cost control is still in the aftermath of the stage of accounting, quota standards, information feedback, responsibility system are not sound, before and during the control ability is low. Therefore, many small and medium-sized cost management in the cost of accounting is not real, control is not strict, control system is not sound and so on.
3.4 Single financing channel
In China, due to a variety of reasons, it is difficult for many enterprises to obtain funds for production and operation, and the difficulty of financing hinders their further development, although the role of small and medium-sized enterprises (SMEs) in the economic and social development of countries around the world is universally acknowledged, they are often in a disadvantageous position in the process of development. Financing methods for SMEs can be categorized into direct and indirect financing. Direct financing refers to a financing method in which an enterprise obtains funds from the capital market through the issuance of shares or bonds to society; indirect financing refers to a financing method in which an enterprise obtains funds through a financial institution acting as a credit medium, the most common being bank loans. At present, indirect financing intermediated by banks is still the main channel for SMEs to obtain funds, and this phenomenon will continue in the future. It can be seen that China's small and medium-sized enterprises have narrow financing channels and a single financing method.
China's small business financing difficulties arising from the causes of the external environment and internal factors: external financing environment: the financial environment constraints and government support is not enough, by the national macro-control policies. Banks generally reduce the scale of credit, increasing the loan difficulty of some small and medium-sized enterprises with poor loan qualifications, while the state directs the bank to recover a large number of loans withdrawn from the enterprise liquidity, resulting in the production and operation of the enterprise's capital constraints. Internal factors: many small and medium-sized enterprises have low level of financial management, unsound financial system, relatively small scale, unstable production, loan guarantee conditions are not available, resulting in small and medium-sized enterprises in the capital market credit is low. Some small and medium-sized enterprises for different purposes, an enterprise more than one set of statements, financial information distortion is serious, resulting in financial institutions can not understand the real financial situation of enterprises, can not judge the real business situation of enterprises, therefore, the loans to enterprises more cautious, which objectively led to the financing of small and medium-sized enterprises difficulties.