Shortage of funds because commercial enterprises a

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Reasons for the shortage of funds commercial enterprises and Countermeasures

Survival and development funding is the basis for the existence of the soul of the enterprise. Enterprise management process is a form of capital flows and the changing process. The existence of money is significant, and only have a certain amount of money, companies can serve as initial capital to begin operation. After normal business, enterprises face ever-changing environment, a variety of reasons why a certain part of the backlog of funds, resulting in a shortage of funds, so the enterprises are to achieve a smooth cash flow, when necessary, to inject some capital . Also in the technological advancements of the modern economy, product upgrading, companies must continue to introduce better, newer and more popular products by customers, can a foothold in the market, which requires companies continue to expand the production scale, improve product quality, ongoing re-investment. A commercial business reasons for the shortage of funds enterprises operating in a variety of reasons the shortage of funds, commercial enterprises as the circulation of intermediate links, a significant backlog of capital, operating in the bear great risk, study its causes, the reasons for the shortage of funds there are several, one: the original insufficient capital investment enterprises, mainly by loans to maintain, together with the rapid expansion of business, in operation too much money out of funds occurs flow difficulties, such as updating equipment, adding new stores, etc.; Second: business due to management not in place, a particular aspect of cash flow disruption caused by such a large number of inventory backlog, Waiqian payment increase, etc.; the three: loss of business occurs. When an enterprise losses, especially losses greater than the amount of enterprises extracting depreciation, the direct result of the liquidity is gradually reduced, causing a shortage of funds. Further deterioration of inventory, property damage, bad debt losses will lead to a shortage of funds business. In addition to their own reasons, the commercial enterprise market, the shortage of funds also seasonal changes, fluctuations in the economy led to changes in spending power, inflation and the strength of other competitors in the same area have a certain relationship, mainly in the following specific reasons Several: 1, lack of capital and financial strain caused by blind investment With the continuous development of commercial activities gradually from a single department stores to shopping malls, supermarkets, convenience stores, etc. the development of multiple formats, they were attracted by its unique advantages of their respective consumer groups. From the old way of doing business in new ways to change, many companies lack adequate sources of funding or the amount of investment is too large, resulting in fixed investment, lack of management to achieve the desired purpose; or even put enough fixed, but a lot of liquidity squeeze funds, resulting in flow difficulties, benefits decline. A City's commercial outlets are concentrated in large West Street, the annual spending power reached nearly one-third of A City. The early 80s, A large commercial business is essentially the city are concentrated in this, but quite good efficiency into the early 90s, the market economy gradually, department stores are gradually restructuring, business sales of goods from a single shift at the same time as customer service, including of course a good shopping environment. However, in this process belongs to the main network Business Bureau basically disappeared, the reason in addition to institutional constraints, the very important reason for this is because at that time the state has invested very little capital, and the accumulation of too little business, due to its own lack of funds, resulting in inability to transform, but to the sale or rental. 90 late, A City in the Great West has formed a number of new business enterprises. Should be the most representative of the Oriental Plaza. Oriental Plaza, a total investment of 110 million yuan, built in 1996, the operation of commercial retail, entertainment, sauna and other projects. The company less than 10 million yuan in capital cases, started by 60 million yuan of bank loans, the funds are still gaps, so the way to absorb the financing of private investment. That After the completion of the mall and put into use immediately, just in the domestic economy is weak, business-round landslide, coupled with little working capital the company can only be maintained by the rental counter. And the fifth floor above the dining and entertainment had been left idle due to lack of funds, until barely 99 at the end of business. But entering 2000, due to private fund raising, interest has been outstanding, and there was a serious fund-raising creditor disputes, and thus triggered a management crisis. Oriental Plaza is produced under the market economy a new thing, why is it difficult to maintain but also come to the point of it? Behind their failure, there are many reasons of course, but denied its investment in the lack of scientific decision-making, inadequate capital and the negative impact of financial leverage is also a decisive factor. First the company did not invest in scientific decision-making, lack of expected investment returns and investment risks of the scientific decision-making, triggering a series of problems. Investment companies are for profit, is the profitability of the investment and risk based decision-making than more. Companies must consider the scale of benefits and risks and other factors, investment in physical assets but more by the timing of investment, the overall integral, mobility, and many other factors. So the physical investment, especially in the context of limited financial resources must consider the construction period, the availability of funds, the investment scale, and many other factors. The Oriental Plaza, with more than ten times the size of financial strength to invest in a turnaround a long period, poor mobility, but an integral project, and ultimately the company nearly twice higher than the bank rate absorb the cost of private capital. Followed by the negative effects of financial leverage lack of knowledge. Once the loan size and interest rates determine the level of interest burden of enterprises also fixed. Since the existence of a fixed interest rate, debt to have the financial leverage effect. The financial leverage is a even at a loss. The hot money in banks and private support, embarked on a But in 1997 the Asian financial crisis, A City of raw coal production and sales of large-scale landslides, residents purchasing power decline, A City business slump, the fifth floor of the plaza to be renovated over the part of business downtime is also idle. Its sales and profits were not achieved their intended purpose, the original idea of the high return on private investment has become impossible. Thus, Oriental Plaza, the resulting leverage financial leverage is negative, not only failed to improve the profitability of the enterprise, but to pay because of huge pressure on the enterprise is difficult to extricate themselves caught in the financial crisis. 2, poor management of enterprise fund tension a, inventory management of goods extensive circulation of commodities in commercial enterprises as an important part of achieving the thrills of goods to the monetary hop. Throughout the course of operation of commercial enterprises, is nothing more than the purchase of goods, sales of goods, the monetary accumulation of goods are the normal operation of commercial enterprises, the occupation of one of the largest capital asset, for commercial purposes has a pivotal position to achieve. Present, most commercial companies has continued the traditional mode of operation in the management of the implementation of category management, in accounting practice on the way into the net price. Even with computer Most companies can only do single operation, the auxiliary management. But with the increasing number of goods, consumption structure and habits gradually changed, the traditional management style more suited to modern business development. The first is not timely, accurate, scientific forecasting purchase amount. If a purchase a large amount of inventory can easily cause the one hand, capital intensive, the cost of increased use of funds, while increasing inventory management costs, while the greater the likelihood of its destruction, and take a very large decline in value of the risk; such as lack of a purchase will increase the number of purchases, increasing the cost of procurement of goods and due to lack of opportunities lost. Especially for clothing, shoes and hats for the seasonally stronger retail sales, the slightest negligence, not because of the backlog of goods caused a loss, is due to lack of missed sales opportunities goods. Commodity stocks followed the situation is difficult to grasp in detail, of commodity pricing decisions. As the increasing number of commodities, a large variety of commercial enterprises as many as four or five million. By hand such a large data management, daily accounting estimates only, so firstly, to increase the amount of labor, waste a lot of human resources ; the second is due to inability to grasp the detailed inventory and storage of , it is difficult to adjust prices in a timely manner, resulting in some cases, mature but still in the sales price-cutting deal done, while some goods are already in excess of insurance period, are still overstocked. B, a reasonable credit policy improper use of credit policy helped to stabilize sales channels, control the market. However, due to credit sales is not the full sense, it directly accounts receivable, credit control of inappropriate and poor management of accounts receivable, will affect the normal flow of liquidity. According to statistical analysis of professional organizations in the developed market economy, enterprises occurred between the amount of overdue accounts receivable total trade 0.25-0.5, while in China, this ratio up to 5 or more. Increase in accounts receivable not only takes up a lot of money, leading to precipitation of funds in circulation, reducing the capital turnover rate; In addition, as corporate reputation and solvency of the different, inevitably produced a number of bad debts, resulting in complete loss of funds. Troubled companies in recent years, a big problem is the accounts receivable is difficult to recover in time, some enterprises have reached the current assets receivables 30-50, almost no available corporate liquidity. Of course, the increase in accounts receivable under the planning system and the output value of indicators related to the blind pursuit of profit, but the disorder of the asset management is also closely related. At present, enterprises in the current account year without checking the unit everywhere, coupled with frequent buying and selling business enterprises, the slightest relaxation management, mistakes will inevitably cause the accounts receivable, bad debts piled up. Even if some companies are also active collection of poor performance by the other party and inviting the liquidation of expenses. Thus, the increase in accounts receivable is an important business factor in the shortage of funds. C, no budget or cost ineffective implementation budget is showing the form of money all of a particular business activities of enterprises during the period of the objectives of the quantitative description of the allocation of resources. The budget is the cost of commercial business, management expenses and financial expenses budget. Budget in a clear business objectives and work of various departments, coordinating with various departments and reasonable arrangements for funding and control daily activities play an active role. In addition to the purchase cost of commercial business spending, the key is the three charges. Therefore, cost estimates of commercial enterprises have a vital role. Widespread commercial enterprises currently no budget or the budget execution lax phenomenon. Mainly in the following aspects: First, no budget for purchase costs. Purchase of science not only to compare the prices of commodities, but the purchase costs should be strictly controlled. For various reasons the majority of commercial enterprises currently purchase cost and the purchase amount is not directly linked to the existence of transportation costs exceed the standard, has no plans to control the phenomenon of travel. Second, the daily expenditure without budget. As more and more low-profit business, which calls for enterprises to make a reasonable current expenditure budget. But most of the major items of expenditure on commercial enterprises such as: routine maintenance, foreign procurement fees, there are many problems, such as procurement due to lack of control appeared far away, Zhicijiagao and so on. Third, no significant expenditures budget. In addition to the daily expenses of an enterprise, there is more or less expenditure on major projects. Although the occurrence of major projects less, but because of its large amounts of enterprise funds have an important impact scheduling. At present a number of major items of expenditure forecasts as the lack of scientific advance arrangements, the lack of strict control of things, and afterwards there is no rigorous evaluation of audit , causing the project a waste of money, halfway additional investment, and afterwards there is no clear responsibility and so on. Fourth, the management system due to financial strain. At present, most commercial enterprises because most of the management system restrictions, the implementation of two accounts, can not strictly enforce the budget. Complementarity between the capital can not accounting unit, resulting in droughts and uneven. The purchase of modern business enterprise for unity, unified payment, unified funds, which on the one hand to reduce the cost of intermediate circulation, reduce procurement costs, on the other hand make full use of existing funds to improve the capital turnover rate. D, financial strain caused by unexpected events with the social development and the frequent economic exchanges, from causes outside the enterprise more and more incidents, these events On the one hand from the Government and relevant agencies, on the one hand from the partnership that supplier. Recent years, China's tax system and gradually establish and perfect the relevant laws are the appropriate sound. But for various reasons, the enterprise tax evasion is widespread. Part of which is the subjective intent for, but denied that a considerable part of the quality of employees is not high due cause. A city such as a portion of a mine prop in 2000 for infrastructure projects, but because Accounting lack of professional knowledge transfer out without making input tax, which resulted in the province in 2001 tax inspection behavior was identified as tax evasion and was fined 420,000 yuan. In a business enterprise tax deductions while some special rules, such as purchase invoices to obtain, but the Ministry of the outstanding fully paid, shall not be declared input tax deduction. Accounting officers do not pay attention if the accumulation of such knowledge, error operation is inevitable loss of enterprise fund. Also in the accounts payable management, because of merger, bankruptcy and other causes of accounts payable account name, place of payment and the tax receipt issued Name of inconsistencies, improper operation by enterprises, as well as being tax penalties. With the gradual improvement of the tax system, the state tax inspection and the penalties are increasing, companies must be strictly accounted for accounting personnel, accurate reporting, in order to avoid unnecessary financial losses. As the economy continues to develop, has become more frequent exchanges between enterprises, and commercial enterprises due to its own characteristics,[link widoczny dla zalogowanych], many partnerships, a large supplier of commercial enterprises to achieve four basic five thousand. So many relationships, there will inevitably be a variety of economic disputes, if handled improperly, can cause loss of business litigation. There are disputes arising from contract disputes and debt disputes. Contract dispute is not standardized because the contract is signed or not clear disputes. The dispute occurred in contacts with small suppliers, because the process of small suppliers in the supply and sales channels in the rush to find their own level of restrictions, in signing the contract often have deep understanding of some terms, causing the returned and settlement of disputes on goods, resulting in financial losses. Corporate debt disputes is due to insufficient funds or other causes can not pay on time the debt arising from litigation. Debt disputes generally occurs in cooperation with major suppliers in the. Largest supplier of goods generally have a clear credit collection period can not be recovered once the overdue collection and are often used to resolve litigation. After the failure of business litigation, in addition to payment, but also increased the overdue interest and legal costs. So the disputes caused by contract disputes and debt business is a capital loss can not be ignored. In summary, the various factors that plagued the shortage of funds the development of commercial enterprises, China's imminent accession to the WTO, along with a number of well-known foreign business, such as Carrefour, Wal-Mart's massive attack, a fierce battle in Business The inevitable, domestic commercial enterprises must solve the daily management of investment and some of the issues, a whole new look, plenty of money into this war, to be invincible. Second, the shortage of commercial enterprise funds of funds as companies measures the blood, through the cycle of operation of monetary value to the enterprise. Once anemia enterprises must be addressed in a timely manner. Way to solve the shortage of enterprise funds can be summarized in two, one from external financing. From external financing conditions, according to their choice of enterprises in different ways, mainly issuing new shares, issue bonds, internal financing and so on. The second is from the inside to find the necessary funds, such as speeding up inventory turnover, accelerate the recovery of accounts receivable, rational use of credit funds. To solve the shortage of funds, the enterprise must do the following tasks: 1, reasonable solution to the capital structure and asset structure capital structure refers to the enterprises of various sources of long-term financing structure and ratio between capital structure is usually long-term debt capital and equity capital formation. Reasonable earnings per share of capital structure is the largest debt and equity structure. To achieve this goal only two basic ideas: first, to maintain the existing capital structure under the same conditions, to maximize the profit before interest and tax of enterprises, that is, by operating management to improve overall profitability. The second is to maintain corporate profits before interest and taxes under the same conditions, achieved by changing the capital structure. A previously described as the city is to go before the Oriental Plaza, a thought, trying to expand the size of the business to improve their overall level of profitability to achieve the purpose. The need to make a bigger pie appropriate funds, funds from different sources of their capital structure decisions are also different, and accordingly, the degree of financial leverage are also different. Easy to do large scale enterprises, as long as the Oriental Plaza as A city that can be achieved through massive borrowing, the key is whether the funds invested in the benefits produced. Enterprises based on the rapid expansion of debt, once the funds have not been effectively used and difficult to produce the corresponding benefits, it will have negative financial leverage, firms will be rapidly brought to a loss or even bankruptcy. Large scale and also to have effective, must have total assets greater than the loan interest rate margin of the basic premise. In the current situation, which requires companies to change how the capital structure, so that earnings maximization. The establishment of new enterprises in the chain, changing business conditions for investment projects when the feasibility study strictly to its geographic location, traffic, single passenger consumption, at cost, revenue and so on to do a detailed investigation; on this basis on the profitability of the project and then carefully select the appropriate mode of financing to full and rational use of the positive role of financial leverage to improve the level of corporate earnings per share. Thus, not the biggest, but to the best business ideas are more correct. Reasonable to adjust the capital structure, not only improve the competitive advantage, and avoid unnecessary financial crisis.