What Is a Financial Repression?

Financial control method refers to a method used in the financial management process to use the relevant information and specific means to influence or adjust the financial activities of the enterprise.

Financial control method

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Financial control method refers to the use of relevant information and specific means in the financial management process to

The financial control method is a method for regulating the financial activities of an enterprise.

Because the purpose, responsibilities and tasks of each control subject are different, different control methods can be adopted. The main methods of financial control are as follows: ^[1]

I. Institutional Control Law

Institutional control law refers to control in accordance with laws, regulations, systems, methods, etc. formulated by the state and enterprises. Including property and materials, cash income and expenditure management and inventory system, post responsibility system, financial management basic business procedures system. Institutional controls usually stipulate what can and cannot be done. Institutional controls are often protective.

Second, the quota control method

The quota control method refers to the control of economic activities or capital movements based on quotas. The economic business that meets the quota must be supported to ensure funding requirements; the economic business that exceeds the quota must be analyzed for the reasons for the excess and then dealt with separately. Generally speaking, the quota management in financial management is essentially a clear and quantitative requirement for all aspects of financial management. It establishes a variety of scientifically based and practicable quotas and composes them according to their internal connections. Quota system. This system is divided into capital quota, cost quota, equipment quota and material quota according to content; according to nature, there are state quota, consumption quota and efficiency quota.

The implementation of quota management requires enterprises to do two basic tasks: measurement and acceptance and original recording. The measurement and acceptance work includes: clarifying the requirements for the configuration, use, management, and maintenance of various measurement and testing tools of the enterprise; regulating the management of various links such as the purchase, storage, receipt, transfer, and delivery of goods, materials and materials jobs. Information work: Establish and improve the responsibility system for the compilation, review, transmission, feedback, and file management of original records and financial information. Financial management requires that information work be comprehensive, timely, and accurate.

3. Authorization Control Law

Authorization control law refers to the control to approve the correctness, reasonableness, and legality of a financial activity and determine whether to allow it to occur in accordance with established procedures before it occurs. The principle of authorization management is: to give full trust to actions within the scope of authorization, but not to recognize actions outside the authorization.

Authorization is usually divided into general authorization and special authorization. General authorization refers to the authorization of lower-level management personnel within the scope of their authority to conduct normal economic activities in accordance with established budgets, plans, and systems. For example, for work-related business trips, as long as the person in charge of the traveler's department is authorized according to the work plan and system. Special authorization refers to authorization for special research on non-recurring economic behavior. Unlike general mandates, special mandates are targeted at certain exceptional economic businesses. These exceptional economic businesses are often individual and special, and generally do not have established budgets, plans, and other standards, and require specific analysis and research based on specific circumstances. For example, authorizing the purchase of an important piece of equipment or authorizing the sale of goods at a reduced price are examples of special authorization. General authorizations exist in large numbers in enterprises, and authorization to lower management staff is sufficient. Special authorization rarely occurs in enterprises, and lower-level managers cannot handle it. It requires higher-level managers and even the highest leaders to study and make decisions.

In general, some business operations can be authorized at one time. For most economic operations, two or more interconnected authorizations are required to complete. The second authorization is not only the recognition of the first authorization, but also the further supervision and control of the business operations formed by the first authorization. If the person or department responsible for the second authorization is independent of the person or department responsible for the first authorization, the authorization control function can be strengthened.

The authorization control of an enterprise shall be as follows: All personnel of the enterprise cannot exercise authorization without legal authorization. All business of the enterprise cannot be performed without authorization. Business operations must be executed once authorized.

Fourth, the liability system control law

It is an important part of organizational control to establish an appropriate responsibility system on the basis of a scientific organizational structure and a rational division of labor management in a modern organizational form. The control law of the liability system is a control method whose main content is to clarify the responsibility, check and evaluate the performance of the responsibility. The responsibility system has three characteristics: the combination of duties and rights; the combination of work tasks and methods; the combination of vertical and horizontal work.

The specific forms of the liability system are mainly the following two:

(1) Departmental responsibility system. The departmental responsibility system refers to a system for clarifying responsibilities and assessing responsibilities in accordance with the functions of each department of the enterprise. To implement the departmental responsibility system, we must first clarify the work content, scope of responsibility and the links between the departments. Secondly, it is necessary to formulate the work standards of each department, as well as the liaison and coordination system between the departments, and check the implementation frequently, so that each department within the enterprise can perform its duties and coordinate with each other in order to complete their respective methods Work tasks to achieve the company's overall goals.

(2) Post responsibility system. The post responsibility system refers to a system that clarifies responsibilities and assesses responsibilities according to posts. The purpose of establishing the post responsibility system is to enable organizations and personnel at all levels within the enterprise to have clear and specific terms of reference and job responsibilities. In order to ensure that everyone has responsibility, everything is managed, there are standards for work, and inspections for work. The specific requirements for implementing the post responsibility system are: first, the scope and authority of the job must be clear. Sometimes, there are several people responsible for one post; sometimes, one person is responsible for several positions. Second, in terms of quality standards, quality standards should be indexed. Third, in terms of policies and regulations, strict discipline and regular inspections and supervision are required.

V. Budget Control Law

The budget is a control mechanism. The budget expresses the responsibility and struggle goals of the executing entity, so it can restrain the behavior of the executing entity and ensure the realization of the budget objective to the greatest extent. By comparing the budget goals with actual performance, managers can keep track of the actual performance of the enterprise within the scope of the budget subject, and analyze the differences between the goals and the actual to reveal the reasons for the differences, so as to reflect the reality of the original budget and Feasibility, and thus decide whether to modify the original budget to make the goals scientific and reasonable. Regular comparison of actual performance with budget performance can maximize the operating efficiency of the enterprise. Implementing budgetary control within the group is more conducive to the implementation of responsibilities and is beneficial to the control and operation of the enterprise.

Interest Control Law

It should be clear that the main purpose of all actors involved in financial activities is to guarantee or increase their own economic benefits, whether it is the state, department or enterprise. When the boundaries of interests between various actors are clear, and the results of their actions are directly related to their benefits, external interest control measures can play their due role. In order to make their operations smoother and more effective, enterprises often use levers such as the distribution of retained profits, salary distribution, and bonus distribution to regulate many internal financial relationships. It is true that the leverage of interests has two-way nature. It encourages people to engage in certain behaviors on the one hand, and also inhibits people from engaging in certain activities on the other. Through indirect regulation of interests, the financial activities of various actors can be adjusted to the extent possible. Plans and goals. When the market atmosphere is getting stronger and stronger, the benefit incentive mechanism will become the main motivation to motivate employees.

Seven, balance control method

The balance control method refers to the coordinated and effective control operation of each part and each element of the system according to its inherent proportions and in accordance with unique rules. As a kind of value management, financial work not only has a certain balance requirement in the whole process, but also has a specific configuration ratio requirement in each part and link. The balance is mainly manifested in the following three aspects:

(1) Balance control of financial income and financial expenditure. Financial income and expenditure, the supply and demand of funds are always a contradiction. The two may reach a certain balance temporarily under a series of external conditions, but it is difficult to be in a spontaneous balance permanently. Generally speaking, the demand for funds is always greater than the supply of funds, that is, financial resources are limited on the one hand, and the demand is unlimited on the other. This requires that financial regulation play an active role, prioritize priorities, and use limited funds for appropriate projects based on the principle of spending within the means to achieve financial balance.

(2) Balanced control of capital operation and material operation. Capital flow and material flow are the two main streams of the enterprise, and they can operate in a balanced or cross-cutting manner. That is, capital flow can become material flow, material flow can also become capital flow, and both are related to information flow. Regarding the control of funds and materials, the goal of the enterprise should be the starting point, and the connection or conversion between them should be realized in a timely manner to ensure the coordination of the capital and material movements and the normal operation of enterprise production and operations.

(3) Balance and coordination of internal structure of financial activities. After the structure and trajectory of an economic system is determined, its internal financial structure is also determined, and it is in a relatively stable temporary equilibrium state. For an enterprise, when its production capacity, product varieties, and technological processes are determined, the capital structure, cost structure, sales income structure, and profit distribution structure of its production and operation are also determined and become relatively stable. Once a certain structure changes, you should find the internal cause of the change, and analyze whether it is a change in the internal factors of the enterprise or a change in external factors. If there are indeed changes outside the controllable factors, we should decisively change the original structural state to adapt to changes in form.

Regional Control Law

Regional control law, that is, a region of financial activities is roughly defined according to the regularity of financial activities, and a series of indicators are considered normal; if it exceeds the scope of the region, it is considered abnormal and it is checked. the reason. Because the criterion at this time is "regional", the location and size of the region have become the focus of this type of regulation. It is required to fully consider various relevant factors when analyzing the area, analyze the relationship between them and the changing trend, and then determine a scientific and reasonable financial control area.

Nine, ratio control method

Ratio control is a relative number control method. It analyzes and explains the nature and regularity of things through the comparison of two related indicators and the change trend of several periods. In many cases, the use of absolute numbers cannot explain the problem, but the use of comparable relative numbers can make effective comparisons to find gaps and deficiencies.

X. Limit Control Law

The quota refers to the quantity stipulation for the consumption, occupation, or output of a certain behavior based on experience or scientific calculation. The main theoretical basis is that the previous behavior has historical continuity and the relative stability of the environment. However, for behaviors without historical continuity, or for systems in which the external environment is changing rapidly and various non-linear variables are constantly generated, quota regulation is difficult to work. In financial management, the limits commonly used to regulate financial behavior include total revenue and expenditure, working capital occupancy, salary quotas, total profits, and total sales.

To properly use the above-mentioned various control methods, the following points must be achieved:

(1) The feedback information needed should be carefully and repeatedly measured, and the relevant data should be arranged and processed for comparison.

(2) The test data should meet the requirements of timeliness, accuracy and applicability as far as possible.

(3) The state space of the object to be controlled should define appropriate limits.

(4) The controlled time should be timely, and don't wait for the system to finish a cycle before performing comparative analysis.

(5) External information must be reliable and authentic, and the information should be expressed in an appropriate unit of measurement.

(6) The feedback loop of information should be minimized to speed up the feedback speed and improve the efficiency of information feedback.

(7) To control certain things, a certain model must be established, and various modern mathematical methods should be used for quantitative analysis and simulation.