What Every One Should Know About Financial Management Of Plant Operation
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Financial Management of Plant Operation
On conditions of the market system the focus is shifted from manufacturing to financial planning, and according to this the very structure and direction of informational flows should change.
For such operational efficiency modern technical and soft information processing means are required. So the fist task is to provide the proper technical arrangement of internal control. This hard and demanded work include following events:
• Control Machinery Rearrangement for the whole enterprise taking in account the necessity of “transparence’. For the great enterprises and holdings the best choice is budget authority.
• Management organization development according to business unit division.
• Financial service organization to provide the opportunity to monitor the processes in all the directions: - for financial management objects
- for management processes (planning, analyses, prediction)
- for financial flows
Financial Management Objects
In its classical interpretation financial enterprises (it means money) are the financial management objects. So the sources of their formation and the relations that appear in the process of their formation and realization can be counted to financial management objects as well. All the company non-monetary assets should be added to this option for these are the same money but in a bit different form. So the financial manager should pay attention to the enterprise assets usage.
The financial director should be interested in the process of the financial result formation. Not the least aspect of financial management of plant operation is the financial risks leading for they inevitably accompany any enterprise in its economic and financial activities.
It’s important to notice the targeted activity of the enterprise in general and financial management as t is. Moreover the firm aims should be clear, formulated, fixed in internal documents and be communicated to all employees. Only then the activity of each enterprise branch will contribute to the tasks achievement. This is the condition for any company development otherwise it will stagnate and will loose in competitive struggle.
Financial Result Formation
It’s known that the main phases of the manufacturing process are – supply, production as it is and goods realization. The financial manager participation is important on all these levels.
Let us take for example distribution of money received from the goods realization. In this case the financial manager should solve the following problems:
1. How to finance the current production according to the enterprise reconstruction planning.
2. What part of a net income direct to the dividends payment and how much money to spend on technical development.
3. Whether the enterprise may allow any social programs.
