Financial Relationships of Enterprises

Financial relations are economic relations between entities that arise as a result of the implementation of targeted programs provided by cash. The subjects of financial relations are the enterprises themselves, their owners, shareholders, as well as suppliers, investors, buyers of products, individuals, financial institutions and other contractors.

Financial relations of enterprises on economic content are grouped in several directions and include several interrelated groups.

These relations arise at the stage of creating an enterprise between its founders. Then, in the course of the activity, they develop and develop between the partner enterprises concerning the production and sale of the products they create.

This relationship with other economic entities of the economy of different forms of ownership, which arise with the purpose of obtaining and further distribution of revenue and non-sales operations.

These include the financial relations of enterprises with contractors, buyers, suppliers, customers, which are associated with the payment of works, products or services. Also to these relations belong and any financial decisions in order to eliminate the consequences of violations in the form of fines.

Financial relations of enterprises include relations under lease agreements in connection with payments and acceptance of rent payments, relations between business entities in order to expand the boundaries of the invested funds, the relationship for the issue of additional shares and other securities, etc.

In addition, the financial relations of enterprises and individuals with regard to the circulation of securities. A special group of financial relations is the interaction of enterprises and workers. Such relations exist regarding the distribution of income and their use, payment of dividends or interest on bonds, etc.

Within the enterprise itself, financial processes are constantly under way to ensure its operation and conduct economic activities.

Hierarchical financial relations of enterprises are observed when they interact with subsidiaries, branches and other structural divisions.

The financial relations of enterprises with the state are most clearly traced in the sphere of their relationship with the budget and various state funds of the extra-budgetary level, as well as by tax authorities in the payment of fees, taxes and mandatory payments.

A special link in the financial relations of enterprises is their relations with financial and credit institutions (factoring companies, commercial banks, etc.). Relations with the banking system are formed in the process of storing money, obtaining bank loans, paying interest for loans, buying currency or selling it, making payments on a cashless basis, etc.

Subjects of financial relations in the form of insurance organizations appear when it is necessary to insure property, business risks, certain categories of employees and other situations.

Each group of financial relations has features and differs from others in the field of applications. However, they are all of a bilateral nature and are carried out with the obligatory condition of the movement of money.

The effectiveness of financial flow management is characterized by such indicators as the period of cash turnover (that is, the time spent in the form of money), the liquidity ratio of the cash flow (the ratio of cash inflows over the period to their outflow during the same period), the cash flow efficiency ratio (net flow ratio Money received as a difference between the amount of inflow and outflow of money, to the negative cash flow).