How To Improve The Financial Management Of Venture Capital Firms

　 　 Financial management of small and medium enterprises Major problems

1. the imperfect corporate governance structure. At present, many small and medium enterprises in China are typical family enterprises. The ownership and management rights of enterprises are highly unified. The investors of enterprises are also the managers of enterprises. The phenomenon of centralization of power is very serious. The financial personnel of enterprises do not have the right to participate in decision-making, but are the specific executors of decision making. Corporate governance structure is not perfect and imperfect, and the financial management of enterprises lacks a good internal environment, so it is difficult to play its due role. Financial monitoring fails and accounting information is distorted.

2. the financial management mechanism is not perfect. The scale of small and medium enterprises is relatively small, and the corporate governance structure is not perfect. The setting of internal financial institutions and the post arrangement of financial personnel are more arbitrary. The division of responsibilities of financial personnel is unclear, responsibilities and responsibilities are unknown, lack of effective checks and balances and restraint mechanisms, and financial management mechanism is not perfect, so it is difficult to form effective internal financial control. At the same time, the contents of financial accounting management are single. The daily work mainly focuses on bookkeeping, accounting and compiling accounting reports. The lack of financial functions such as analysis, prediction, supervision, control, inspection and so on does not play a role, and can not control the process of various economic activities in the production and operation activities of enterprises, so as to achieve the goal of financial management, such as reducing costs and improving the efficiency of fund utilization.

3., the quality of financial personnel is not high. Small and medium-sized enterprises are restricted by their own organizational structure and other factors. The phenomenon of "family" is very serious. Many accounting positions are taken up by family members. The selection of Accountants is not based on professional quality, but whether they are obedient or trustworthy. The concept of employing a person by appointment means that in practice, accountants are of low quality and can not play the role of decision-making staff. The above phenomenon makes small and medium-sized enterprises unable to attract and retain high-quality professionals.

4. financial accounting information distortion and high quality financial information can help enterprises improve financial management, control and guard against financial risks, reduce operating costs and improve economic efficiency. However, many small and medium-sized start-ups have developed several sets of accounting statements in order to avoid tax and escape debts due to the imperfect financial management mechanism and the low quality of financial personnel, resulting in distortion of accounting information. False accounting information not only confuses the internal financial management of enterprises, but also causes financial risks hidden trouble. It affects the normal decision-making of enterprises, endangers the long-term development, and brews the credit crisis of small and medium-sized enterprises.

5. the shortage of funds, financing difficulties, shortage of funds, financing difficulties and financing means are common problems faced by many small and medium enterprises. The reasons for financing difficulties of small and medium enterprises are not only external factors but also internal reasons, that is, the credit crisis caused by the distortion of their financial accounting information, the low transparency and the weak credit concept, which make the outside investors discouraged and the financial institutions lack the confidence in loans to SMEs.

6., lack of effective financial incentive mechanism. An important function of modern financial management is incentive function. Enterprise financial personnel realize incentive effect through the design of financial plan and financial system, stimulate the potential of employees, and reflect the incentive function of financial management. However, many small and medium enterprises lack effective financial incentive mechanism, fail to deal with the relationship between accumulation and consumption, accumulation and expansion; some focus on the accumulation of financial resources unilaterally, neglect the incentive function of distribution, affect the enthusiasm of employees, and some focus on distribution unilaterally, ignoring the long-term accumulation of capital, which has affected the scale expansion and long-term development of enterprises.

　 　 Venture capital institution By providing value-added services, help start-ups to achieve standardization of financial management.

The development of venture capital industry shows that the true value of venture capital to small and medium enterprises is not only to provide capital simply, but also to provide value-added services. This is also a major feature of venture capital differentiation from traditional investment, and is the core competitiveness of venture capital enterprises and the key to success of venture capital investment. In view of the problems existing in the financial management of small and medium-sized entrepreneurial enterprises, venture capital enterprises mainly help SMEs to improve their financial management level and standardize their financial management by providing value-added services in the following aspects. {page_break}

1. optimizing the ownership structure, improving corporate governance structure, and entering venture capital into venture capital enterprises, can optimize the ownership structure of entrepreneurial enterprises, realize the diversification of ownership structure, and form a capital structure composed of entrepreneurs, technical backbone and investment institutions, so as to achieve a moderate separation of ownership and management rights of entrepreneurial enterprises, and improve the corporate governance structure through improving the organizational structure of shareholders' meeting, board of directors and board of supervisors. A sound corporate governance structure is the basis and prerequisite for the standardization of enterprise financial management. Under the modern enterprise system, an important feature of the corporate governance structure is the financial constraints and control of the board of directors to the operators. Venture capital enterprises recommend directors to the small and medium enterprises, improve the rules of the board of directors, clarify the responsibilities and powers of the shareholders' meeting, board of directors and operators, give full play to the leading role of the board of directors in regulating the financial management of the start-up enterprises, and create good internal conditions for improving the financial management level of small and medium-sized enterprises.

Small and medium-sized start-ups establish a sound internal control system, build effective incentive and restraint mechanisms, set up enterprise accounting institutions and staffing staff according to the principle of separation of duties and authority control, clarify responsibilities, make detailed provisions on accounting business process and financial report preparation, establish internal control system, and make internal control system binding on any person involved in accounting work within the enterprise. The internal control system covers all aspects of enterprise operation, so that accounting management work can be followed in order to eliminate the phenomenon of insider control formed by family management. At the same time, the board of directors should establish the necessary internal audit system to ensure the effective implementation of internal control system, so as to ensure that the system is effective. 2., establish an effective internal financial control system. Venture capital enterprises should help.

3., improve the professional quality of accountants. Venture capital enterprises can help small and medium-sized enterprises to strengthen their financial management and raise their financial management level by recommending and sending financial controller. The chief financial officer should help enterprises establish standardized accounting personnel selection, training and assessment system. The selection and appointment of accountants should emphasize the professional quality and the relative ties. A regular training system should be established to enhance the sense of belonging and identity of the accountants while updating their knowledge structure and business level. Through the establishment of a scientific examination, promotion and elimination system, the accountants can enjoy a healthy flow. High quality accountants are the guarantee of human resources to improve the financial management level of enterprises.

4. increasing the transparency of corporate accounting information, improving the corporate governance structure, effective internal control system, and high-quality accountants provide necessary guarantee for the quality and authenticity of accounting information of small and medium enterprises. In order to improve the external image of small and medium enterprises, venture capital enterprises use their own expertise.

Industry advantages and brand image can be used for planning and publicity of enterprises. We should consider introducing intermediary firms such as accounting firms and law firms to provide professional services such as consulting and auditing for enterprises, and further standardize their operation. At the same time, they can increase the transparency of corporate accounting information, enhance their credibility, improve their image and get the recognition of the outside world, and create conditions for the introduction of new strategic investors, financing and listing of financial institutions.

5., using their own advantages to ease the venture capital investment of venture capital financing enterprises, alleviating the financial pressure of venture capital, increasing the liquidity of enterprise assets, reducing the asset liability ratio, optimizing the financial indicators, and helping enterprises to follow up financing. At the same time, venture capital enterprises can also make use of their own resource advantages and reputation advantages to win the government innovation fund and discount loans for start-ups, provide stage guarantee for enterprises' financing, introduce new strategic investors, realize the healthy development of venture enterprises, and create capital and smoothly withdraw from venture capital.

6., to help start-ups establish effective financial incentive mechanisms, venture capital enterprises can set up stock option stock incentive system in venture enterprises through scientific and rational financial system design and arrangement, and stimulate the potential of core teams and employees. The core team and employees of entrepreneurial enterprises are decisive factors for the survival and growth of enterprises. If they can get effective incentives, the development of enterprises will have a solid human resources protection. The high growth of entrepreneurial enterprises provides favorable conditions for the establishment and implementation of stock option stock option incentive system, and its good prospects for development are great stimulation and temptation to the core team and employees. Therefore, an effective incentive system, coupled with the passion and spiritual satisfaction generated by entrepreneurship, can fully mobilize the enthusiasm of employees, stimulate their potential, and handle the relationship between accumulation and consumption, accumulation and expansion, immediate interests and long-term interests, so as to inject new impetus to the development of entrepreneurial enterprises.