In the case of a bad economic environment, what methods should corporate financial personnel use to effectively manage the company's expenditures in all aspects, reduce costs and increase efficiency for enterprises, not only improve profits, but also enhance self-worth?
It boils down to one sentence:Only by understanding the integration of business and finance and providing value to the business can you quickly promote and raise salaries, and broaden and improve your career path.
What is the integration of business and finance?
Managerial Accounting
From the perspective of management, management accounting is essentially the use of financial accounting data and other related information, the use of accounting data and other relevant information, the use of accounting, statistics and mathematical methods for the management activities of the enterprise to carry out decision-making, planning, control, and its actual implementation results for evaluation and assessmentPurposeIt is to mobilize all positive factors to the greatest extent, so as to achieve the best economic benefits.
Management accounting refers to the use of accounting information systems and other relevant data to serve all levels of enterprise management.
The basis of management accounting**, decision-making, planning, control and assessment mainly depends on financial accounting data.
The methods employed in management accounting can be accounting methods, statistical methods, or mathematical methods.
The content of management accounting can be summarized as evaluating the past, controlling the present, and planning for the future, with an emphasis on planning for the future.
The purpose of management accounting is to maximize economic efficiency, and the means to achieve the end is to mobilize all positive factors.
Financial management
It is a variety of investment and financing decisions made by the organization with the goal of creating wealth, also known as corporate financial management and corporate financial management.
The main content of the textbook:
1.Financial Statement Analysis & Finance**.
2.Basis of valuation (time value of money, risk and reward).
3.Cost of capital (cost of debt, cost of equity).
4.Investment items (cash flow, discount rate and sensitivity analysis).
5.Valuation of Claims (Financing Instruments).
6.Option Value Valuation (Financial Options).
7.Business Valuation (Business Valuation).
8.Capital structure.
9.Long-term financing (**bonds).
10.Dividend distribution split and ** buyback.
11.Working capital management (cash, receivables, inventory, short-term debt).
Business Finance
Business finance, also known as the integration of business and finance, is a word that has been frequently mentioned in the corporate finance community in recent years. There is no authoritative statement on what it means.
How traditional finance usually works
From a practical point of view, finance work is at the strategic and capital level, facing the usual work of entrepreneurs, such as:
1.Participate in capital operation.
2.Participate in strategy and business model design and justification analysis.
From a practical point of view, financial work is at the management level, facing the usual work of the business, such as:
1.Budget.
2.Analyse.
3.Cost management.
4.Internal control risk management.
5.Money management.
6.Participate in performance management.
The main job of a business leader is usually
In general, the work to be done well by business leaders includes:
1.Do your business well.
2.Nurturing talent.
3.Manage the financial results of your business.
Contrast
Traditional Finance:
1.Service Target: Traditional finance is employed by entrepreneurs and CEOs
2.Starting point: to help entrepreneurs, use financial methods to control, heavy control and light management, and pay less attention to service.
3.Control object: business and business personnel.
4.Tools: Budget analysis, etc.
5.Competency requirements: traditional finance, partial rules and control capabilities.
Business Finance -1:
1.Service Target: Entrepreneurs, CEOs
2.Starting point: Go deep into the business and help entrepreneurs manage the business at a deeper level, mainly decision support, strategic advice and promotion.
3.Control object: business and business personnel.
4.Tools: Budget analysis, etc.
5.Competency requirements: understand the business and integrate into the company's operations.
Business Finance -2:
1.Client: Focus on business area leaders.
2.Starting point: to help the business leader, to achieve performance, pay more attention to service.
3.Control object: When serving the business owner, the control object is the business personnel below the business owner.
4.Tools: Budget analysis, etc.
5.Competency requirements: understand the business and integrate into the business.
The main value of business finance
In terms of serving entrepreneurs: helping entrepreneurs manage their businesses more deeply.
On the service business owner's side: help the business owner achieve business results.
The role of the integration of business and finance
The difference is seen in the analysis work:
For example, analysis:
1.Traditional finance is mostly financial analysis, with financial data as the main object of analysis, and mostly analyzes the big performance and problems at the company level, which is not in-depth and difficult to penetrate. There are basically no suggestions for improvement. The analysis is mostly focused on finding problems.
2.Business finance: First of all, it is necessary to distinguish not only the enterprise as a whole, but also various fields and subdivisions. Combined with financial data, business data (the information is very detailed), find business problems, and need to help the business to make suggestions, analyze suggestions, and support large and small decisions. Some of the analyses go far beyond the scope of traditional finance, such as customer value analysis...
From the perspective of inventory management, we can see the difference
Business Finance Helps Inventory Management:
For example, the company's inventory has been at a high level, which has caused the company to lose a lot of money in the inventory, and some raw materials are often lost due to expiration. At the same time, when the company's old products are about to be withdrawn from the market, there are often some special materials and parts that have been stranded in the inventory for a long time due to the suspension of production.
Traditional financial practices are commonplace:
1.Analyze the inventory ratio of raw materials and look for some raw materials with a high proportion.
2.Analyze the inventory changes of raw materials, that is, compare the amount of raw materials in different months.
3.The same is done for the finished product.
4.Calculate the turnover rate.
5.The carrying amount of deteriorated and damaged raw materials is listed.
6.Analyze the cost of tied up capital.
7.Regularly list the special parts in question.
How to go deeper?
1.Combined with the ex-factory time of materials, combined with sales and production plans, regularly analyze and prompt the situation of materials with expiration risks.
2.Regularly analyze the situation of special non-complete sets of materials and parts with high value in combination with the BOM list.
3.Combined with the Xi of collection, the design material placement is convenient for the "first-in, first-out" of real logistics.
4.Analyze the preparation of materials for different products to see if there are more stocks for low-value products.
5.Analyze and determine safety stock.
6.Regularly analyze problem materials and assist in disposal.
7.Analyze and recommend stocking strategies based on receivables, payables, funding conditions, etc.
Factors taken into account by the company in analyzing and determining the amount of material inventory:
1.Analyze safety stock.
Combined with delivery lead times: Analyze transit times for different modes of transport.
Consider the equilibrium of production: the probability of different production needs.
Analyze out-of-stock costs.
2.Analyze inventory levels.
Analyze inventory costs.
Analyze the cost of transportation for different modes of transport.
Analyze other inventory losses.
The company's specific practices (common general materials):
1.Calculate the stock quantity A1. according to the daily demand of balanced production * lead time
Analyze the transportation costs of several typical modes of transport B1
Analyze the storage cost of A1 and B2
2.Considering the amount of stock for sudden demand, according to the situation of sudden demand in the past, calculate the burst demand with the highest frequency a2
Considering the out-of-stock cost of the most frequent burst of demand, i.e., the gross profit of the lost order, and the probability of the actual loss, the out-of-stock cost C1 is calculated.
Analyze the inventory cost of A2 C2
Analyze A2's other inventory losses C3
The impact of the integration of business and finance on the structure of financial organizations
Case: Design of business finance of a groupSchematic diagram of the organizational structure
Three-legged structure
Strategic Finance
Together with the group's strategy department and performance department, it forms the staff department of the corporate headquarters, and transforms strategy into policy and company will into action.
Provide guidance for the group's business decision-making and provide support for the business finance of its subordinate enterprises.
It is divided into eight specialties (corresponding to the company's eight strategies, budget, cost, material, acquisition and other eight areas).
Four research teams (Exchange Rate, Tax, Risk, Cost).
Requirements: To be specialized, such as being able to discuss a certain policy with the State Administration of Taxation, and be able to study their own cost management system. None of this can be achieved alone.
Business Finance
Sales Finance, Product Finance, R&D Finance, Overseas Finance. Don't make data, make data into information;It does not make policies, but will apply policies to practice, and is the representative of strategic finance in the business center.
Each business unit is further subdivided, and is equipped with a lower level of CFO, like a fine net.
Shared Service Center
Centralize accounting and financial information and provide standardized reports.
The requirements are standardization and specialization.
Financial requirements for the business:
Small CFO with extensive professional knowledge to assist the business unit in the analysis of business decisions, product profitability analysis, etc.
Business finance must act as a generalist with a broad perspective and knowledge;It is necessary to use a set of financial management certification system within the company.
How Business Finance works
Go out and unremittingly communicate, exchange and train other departments.
It's important for you to do your job well and get your customers to understand you.
Summary:
Impact on organizational structure
Dedicated staff are usually required.
Uniform planning and requirements are often required.
Success Factor
1.Strong support from the leadership.
2.The business is developing rapidly, and a lot of human and financial resources are invested.
3.The financial planning and design are scientific and in place.
4.The implementation is resolute and thorough.
The requirements of the integration of business and finance for financial personnel
Characteristics of the work of business finance personnel
It is quite different from traditional financial work
The tools and techniques used are largely the same as those of traditional finance.
The goal is to achieve business goals, especially financial goals, without compromising the business.
Assist in business decision-making, and assist in decision-making and operation management.
Deeply into the details of the business, no longer take bookkeeping, reporting, and tax declaration as the main work, and no longer think that the boss monitors the work of others as the main way of working. It is to promote scientific management and decision-making.
The amount of communication and coordination is very high.
It can be said: half business, half finance.
Ren Zhengfei's requirements for finance
Finance must understand the business - in order to provide the best value of accounting services.
Xi and eager to grow and progress.
Finance staff are involved in project management.
A competent CFO can take over the CEO at any time
Competency and quality requirements for business and financial personnel
Capabilities:
1.Traditional financial management capabilities.
Analytical skills. Ability to plan budgets.
Cost management capabilities.
Ability to control internal risks.
Money management skills.
2.In-depth knowledge of the business.
Understand macro policies.
Learn about the industry.
Understand the key points and rules of the internal value chain such as research, production, supply and marketing.
3.General management capabilities such as organization, communication, coordination, execution, etc.
4.Strategy, performance, culture, organizational structure and other related competencies.
Professional qualities
1.Personality and mentality.
Be open-minded.
Innovative mindset.
Service mentality.
The mindset of learning Xi.
2.Behavior-oriented.
Goal-oriented. Results-oriented.
Scientific management orientation.
Business and finance, who merges with whom?
The integration of finance and business is the so-called integration of industry and finance.
The integration of business in the direction of finance can be understood as cultivating the refined management ability or value management ability of business personnel.
*: Finance Workplace. The article is for learning and Xi exchange only, if you have any questions, please consult Yanyuan experts.