What are the financial management processes?

With the development of modern technology, financial management has become an evolutor. In the era of big data, financial managers should not only face the competition of the same industry, but also deal with the pressure of the development of external artificial intelligence technology, which can be described as a big pressure mountain. Li Yongyan, President of China Enterprise Financial Management Association once pointed out: “financial management practitioners need to have the ability of high perception, high concept and high innovation. They need to quickly perceive the changes in the market and highly refine the concept of change, so as to carry out high innovation.” In the new era, with new changes and high requirements, no matter how the world changes, many essential things can never be separated from their ancestors. For example, financial management process, no matter how advanced technology, big data, artificial intelligence, and the Internet continue to optimize and enhance the financial management process of enterprises, as a financial manager, we must be proficient in the financial management process, and integrate the current changes with the actual situation of enterprises, so as to be more pragmatic and efficient. So, at present, we might as well make clear the financial management process.

What are the processes of financial management?
In short: the financial management process mainly includes six aspects: prediction, decision-making, planning, control, analysis and inspection. What to predict? According to the historical data of financial activities, considering the requirements and conditions of reality, we can make scientific prediction and calculation of the future financial activities and financial results of the enterprise, saying that the common point is fortune telling, which has several success or failure; with scientific prediction, we can provide basis for decision-making, and the success or failure of decision-making is directly related to the success or failure of the enterprise, so don’t play yourself in; decision-making After that, the strategic direction is set, and then we start to break down, which is what we often call planning. In the process, it is necessary to transport scientific and technological means and mathematical methods, comprehensively balance the objectives, formulate main planning indicators, formulate measures for production increase and saving, and coordinate various planning indicators. All of these become the necessary link to implement the enterprise’s goal and guarantee measures.

When the plan is finished, it needs to be implemented step by step according to the plan. Is it right to follow the plan step by step? Of course not. In the process of production and business activities, planning is dead, people are alive, and it is also recognized how smart the Chinese are. Therefore, the implementation of the plan is not to give a clear explanation of rights and responsibilities, but to achieve the plan indicators and improve economic benefits through calculation and audit. The core is to ensure the effective implementation of the plan. For example, many enterprises are unable to monitor their budgets and expenditures in real time. They find that everything is wrong only after spending. There is a lag in management and control, which is easy to cause waste. What should I do? This needs to be further integrated with the Internet era and cloud technology. Many enterprises use ERP enterprise management system to go to the cloud, and realize the daily calculation and approval of all funds’ income, expenditure, occupation and consumption, as well as the integration of business and finance to effectively control. For example, our common SAP ERP system can easily achieve this.

The next process will be very important. It requires you to obtain the business status of massive data in time and analyze it quickly to provide it to the decision makers of the enterprise management. It is an important means to investigate, evaluate and analyze the process and results of financial activities of enterprises, and finally put forward improvement measures and tap the potential of enterprises, but all of these will be based on accounting.

After the analysis is completed, the relay will be handed over to the decision-maker. After the decision is made, the plan will be implemented. During the implementation, the control will be controlled. The control will be analyzed according to the data. This is how the financial management cycle? Of course not. There is also an important means to prevent and control risks. Therefore, it is necessary to check the rationality, legitimacy and effectiveness of business activities and financial revenues and expenditures in order to realize financial supervision. Common compliance is an important part of it.

How are you? Do you have a preliminary impression on the six processes? The six processes are complementary, interrelated and inseparable organic unity. Through the circulation of the six processes, the path and circulation system of financial management that we are familiar with today are formed. Therefore, no matter based on big data, cloud computing or artificial intelligence, six processes are essential. Modern financial management needs to change the structure and details of each major process through technology to meet the characteristics of the enterprise itself and realize efficient and flexible operation, so as to make them respond more timely and efficiently under the new technology, which is the significance of modern financial management. For a more comprehensive understanding, consult your acloudear — SAP partner.

This article "What are the financial management processes?" by AcloudEAR. We focus on business applications such as cloud ERP.

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