The role of cash flow management in enterprise development
Release time:
2022-12-28
The role of cash flow management in enterprise development
Chen Qianhui
Cash flow is equivalent to the blood of an enterprise. The shortage of cash flow not only hinders the operation of the enterprise, but also may lead to the huge loan scale of the enterprise. High interest costs will erode the profits of the enterprise, forming a vicious circle, and ultimately affect the development of the enterprise. Effective cash flow management can help enterprises to reasonably evaluate their own benefits and solvency, reduce financial risks, and provide an important guarantee for the healthy and sustainable development of enterprises. Its role is mainly reflected in the following aspects.
（1） Understand the internal financial situation of the enterprise
Cash flow management runs through all aspects of enterprise financial management. It is a process of analyzing and managing the operation of enterprise operations, financing, investment and other activities. Cash flow management can be used to reasonably plan the cash of an enterprise in a certain period, and to conduct real-time control, analysis and evaluation of the actual use of cash, so as to maximize the use of enterprise cash. Cash flow management can clarify financial indicators such as capital turnover rate, payment ability and debt paying ability of enterprises, provide a powerful data basis for the overall financial situation of enterprises, and provide a reference for formulating further financial strategies and overall development strategies. Based on this, enterprises can invest cash into projects with higher profitability and make reasonable capital budgets while maintaining daily business needs.
（2） Enhance the ability of enterprises to deal with financial risks
The financial risks faced by enterprises can be mainly discussed from internal risks and external risks. The ability of enterprises to deal with these two types of risks can be enhanced through cash flow management. The internal risks mainly include the difficulty in capital turnover caused by improper capital allocation, and the loss of illegal operation of relevant internal management personnel. Through cash flow management, enterprises can make overall arrangements for existing funds, conduct real-time analysis on the use of cash, follow up and change the existing fund plan in a timely manner, and form a certain supervision role for relevant cash management personnel, improve the internal management standards of enterprises, reduce internal corruption and private use of public funds, so as to enhance the ability of enterprises to deal with internal risks. External risks mainly include financial market and industry environmental risks. For example, changes in the construction market environment caused by government policies or other reasons will affect the development of most enterprises in the market. By using cash flow management, enterprises can conduct risk early warning and risk analysis in advance, and make preparations in advance.
（3） Improve internal control and reduce enterprise costs
Cash flow management can find problems in the financial work of enterprises in a timely manner. Through standardized management steps, relevant work contents can be reasonably refined, so that financial work can be based on evidence. Continuously improve the internal control level of the enterprise through the planning, supervision and feedback of fund use. At the same time, cash flow management can reduce the problem of low cash use efficiency caused by capital dispersion by strengthening the capital management of each subsidiary or branch of the enterprise. Through effective cash budget and plan, we can avoid the waste of funds, realize the rational use of internal cash, and reduce unnecessary costs.
As an industry with long payback period and large advance amount, construction enterprises should not only pay attention to the accounting profits under the accrual basis, but also pay full attention to cash flow management, play its role in enterprise development and prevent capital risks.
Recommended news
2025-07-21
Leaders of PowerChina Renewable Energy Group inspect and guide the Group's Baoyingshan Sunshine Photovoltaic Project On July 18th, Lv Dongdong, General Manager of Power Construction New Energy Group Co., Ltd., led a team to visit the Baoyingshan Solar Photovoltaic Power Generation Project undertaken by the group for work guidance. Chen Fei, Vice President of the company, also participated in the activity. At the project site, Lv Dongdong and his team thoroughly inspected the progress of the project, fully affirming the achievements made in safety production management, engineering construction quality control, and overall construction progress. They required the Jinhe Photoelectric Project team responsible for construction to continue to strictly implement various regulations to ensure the safe, efficient, and high-quality progress of the project. Lv Dongdong and his team also had a cordial exchange with the on-site staff, thanking the Qian'an employees for their hard work and expressing their condolences and care. (Jinhe Photoelectric Branch)
2025-07-16
On July 15, the Jiangsu Provincial Construction Industry Association Construction Safety Equipment Management Branch announced the results of the 2025 Jiangsu Provincial Construction Construction Safety Production Knowledge Competition. The group company won fourth place in the team competition, ninth and tenth place in the individual competition, and another 7 people entered the top 100.
2025-07-02
The Group was awarded the A-level Taxpayer Credit Enterprise Special Medal for 2020-2024
On the morning of July 2, Ye Qingsong, director of the Qidong City Tax Bureau of the State Taxation Administration, visited the Qian'an Building and presented the Group with a special plaque for A-level taxpayer credit enterprises for 2020-2024. Yin Weidong, chairman of the Group, warmly received the plaque.
2025-07-02
A groundbreaking ceremony was held on the morning of July 1st for the Wujiang District Modern Digital Fishery Industrial Park project, undertaken by the Group Company. Sun Jianjiang, Secretary of the Wujiang District Committee and District Head, and Zhang Binggao, Deputy Secretary of the District Committee, attended the ceremony. Chen Fei, head of the Group's Jinhe Optoelectronics branch, and Shi Saisai, head of the Suzhou company, also participated in the event.
2025-07-01
Jinrun Branch of the Group held a special lecture on safety.
On the morning of July 1st, Jinyun Branch of the Group held a special online lecture on safety, attended by over 100 safety management personnel from various project departments. The lecture consisted of multiple segments, including "Safety Warning Video Education," "Examples of Project Safety Risks and Hidden Dangers," "Key Points of Safety Work," "Review of the 2025 Safety Production Month Activities," and "Summary of Quality and Safety Process Issues on the OA Platform." The lecture content was drawn from safety hazard investigations of key projects under the branch's supervision and provided strong guidance for frontline construction workers.
2025-07-01
Group company replacement of power facility license
The "Measures for the Administration of Permits for the Installation, Repair, and Testing of Electrical Facilities" (Order No. 30 of 2025 issued by the National Development and Reform Commission) came into effect on July 1, 2025. The National Energy Administration automatically reissued electronic licenses to licensed enterprises through the National Energy Administration Qualification and Credit Information System. After the replacement, the Group's license categories and levels for the installation, repair, and testing of electrical facilities are: Class III for installation, Class III for repair, and Class III for testing.
Contact
Jiangsu Qi'an Construction Group Co., Ltd.
Address: No. 239, Jianshe South Road, Qidong City, Jiangsu Province.
Tel: 86-513-83314375
Fax: 86-513-83314374
Email: qa@qaqa.com.cn
Zip code: 226200
Mobile website
English
OA
Copyright © 2022 Jiangsu Qi'an Construction Group Co., Ltd.