The finance of enterprises is ... The concept and specificity of the company's finances

Getting the maximum amount of money is the main goal of any enterprise. To understand what you have and how it can be used, it is necessary to conduct a sound financial policy. And for this it is necessary to know the theoretical basis of such an approach.

What is finance?

This is the name of the system of monetary relations, which expresses the formation and use of trust funds during their circulation. Finance firms occupy an important position in the economic system of the state, since at their level the bulk of funds are being formed, which will be used in the future. They are divided into own and credit (attracted). The first are in the unconditional location of the enterprise and can be used for any purpose. The second will need to be returned in time, paying even interest. So what are the features of the company's finances? This is not an easy question, so the answer to it will be divided into several sub-paragraphs.

What are the finances of enterprises?

This is an integral part of the national economic system. They include:

1. Pricing.
2. Budgetary financing.
3. Tax system.
4. Level of money circulation.
5. Credits.
6. Foreign economic activity.
7. Licensing.
8. Incomes.

The most negative impact on the finances of commercial enterprises is provided by such factors as:

1. Unprocessed emission-monetary policy, which does not take into account the volume of the commodity mass and the real interests of the enterprise.
2. Liberalization of prices without the necessary prior to this settlement.
3. Erroneous budget policy.
4. Decrease in investment activity.
5. Trends in the stock market and credit and banking policy.
6. Crisis of payments.
7. Wrong import / export policy.

Principles of enterprise finance

For their organization it is necessary to adhere to the following postulates:

1. Maintain interest in the final results of the work.
2. Create financial reserves.
3. A responsibility.
4. The division of finance into their own and credit.
5. Fulfillment of the imposed obligations to the budget.
6. Financial control of the activities and use of funds.
7. Independence.
8. Self-financing.

The principles of enterprise finance are based on the balance of interests of the private entrepreneur and the state. If they deviate from them, levers of influence are provided, which will allow the system to return to its original state.

The relationship of money turnover

Enterprise finance is an economic element that is continuously in motion. Each direction of spending should have its source of funding. Typically, such relationships are distinguished:

1. With the buyers.
2. With employees of the firm or enterprise.
3. With banking organizations.
4. With the state.
5. With management structures that have leverage.
6. With participation in other enterprises (such as the distribution of profits derived from joint activities).
7. Work with trust funds that have an on-farm assignment.

Financial mechanism

It consists of five elements that are interrelated:

1. Financial methods. This includes ways to influence economic processes when using money through the creation of trust funds. Formation of enterprise finance is the main purpose of using these methods. Their peculiarity lies in the fact that they determine the basis on which everything else is built.
2. Financial leverage. These are actions aimed at achieving the desired goal.
3. Legal support. Includes regulations, orders, legislative acts and other similar documentation.
4. Normative provision. This includes instructions, tariff rates, explanations, guidelines and similar data.
5. Information Support. This includes economic, commercial, financial and other data that are of value in each specific case. So, as the objects can act information about solvency, financial stability, money exchange rates and so on.

As you can see, the finances of enterprises are such a specific sphere, where you have to act with a look at a number of factors. And they can have both an information basis, and legislative. In case of choosing the wrong way of interaction, the entrepreneur is likely to be ruined.

Functions

They allow you to understand the very content of this area of the enterprise. Three functions are distinguished:

1. Distributive (stimulating). This should be understood that the enterprise decides where the received funds will go. With its help, funds are being created to fulfill all the obligations that the organization has to the staff, budget, counterparties and creditors. If everything is done with a reasonable approach, then the quality of work is stimulated, it can be said about the finances of commercial enterprises and state organizations.
2. Control. It consists in monitoring the financial state of the organization and verifying the effectiveness of its work. The most important is the control of the profitability of the enterprise. This function is implemented in two ways:
   1. Tracking the indicators that go in the operational, accounting and statistical reporting.
   2. Influenced by financial impacts (taxes, subsidies, benefits).
   3. Serving (reproducing). This function is responsible for the constant renewal of the consumed resources (for example: the purchase of new materials, the hiring of new workers in return for those retiring, and so on).

Structure

Financial resources by their origin can be conditionally divided into three components:

1. They are formed by their own means. This includes the profit received from the main activity, the sale of property, special-purpose income, various contributions, and so on.
2. They were mobilized in the financial market. This includes funds received from the sale of securities, interest and dividends, loans, income received from operations with foreign currencies.
3. Received after redistribution. These are insurance reimbursements, financial resources (which came from other economic structures), resources (which were formed on a unit basis) and budget subsidies.

Control

Formation, as well as the use of financial resources is not possible, if there is no system that organizes and coordinates everything. Management implies the achievement of strategic and / or tactical goals regarding the functioning of the enterprise itself. Features of organization of enterprise finance include:

1. Formation of financial resources, as well as their optimization.
2. Placement of capital.
3. Analysis of the company's finances and the direction of cash flows that are circulating over it.
4. Managing the process of functioning of capital.
5. Organization and management of relations with other enterprises, insurance companies, budgets, banks and other units of the financial structure.

Conclusion

As you can see, the finances of enterprises are a complex component of any commercial organization. They need to be able to handle and use rationally. Any manager should be aware that the finances of enterprises are the main guarantee of his functioning, and they should always work with the point of view of optimality and efficiency.