Study On The Necessity And Practice Of Strengthening The Financial Management Of Companies In Seed Industry Association

In 2011,the regulation of production and operation permission for crops seed indicates that seed companies of running hybrid rice and hybrid corn should ensure the registered capital reaching to 30 million RMB when they ask for a production license.In the new situation,many medium and small seed companies should form an seed industry association in order to survive in the competition.In 2015,Guangxi Lvfeng Seed Company and other five medium and small seed companies form a seed industry association,naming Guangxi Haokai biological technology company.The six companies manage and calculate separately.The former financial managements of the six companies fail to meet the development requirement of a seed industry association,so we should probe a new model of financial and operating management.The paper analyzes the problems of financial management in Lvfeng Seed Company,and tries to probe a elaborating model after joining the association.The paper concludes:1.The financial management problems of no joining the seed industry association in Lvfeng Seed Company(1)The internal control system is defective.The cost of seed production of producing and marketing all by ourselves cannot be calculated in time,affecting the current profits of company.The clients default on the payment in a large amount.The receivables go slowly.(2)The overproduction and pool sales of seed cause the stock at an inventory risk.(3)The cost of seed production is too high.The system of controlling the expense of seed production is imperfect.(4)The costs on all the aspects are high because of paying a little attention on in reducing expenditure.(5)The brand influence is so small that the financing,sales and promotion are restricted.2.The probe and practice of elaborating financial management in Lvfeng Seed Company after joining the association(1)According to the requirements of association in financial management,we reformulate the financial management systems in a elaborating way,including the capital,assets,inventory,profits and internal control.(2)Taking the advantages of the association in capital,resources,and brand influence,we increase the technology of innovation,strengthen the cultivar assessment,and promote the marketing and new brands.In addition,we expand the financing channels,guaranteeing the capital for the development of company.3.The effects of elaborating financial management after joining the association in Lvfeng Seed Company are obvious.After joining the association,the financial department of our company has adopted an elaborating model in financial management.We have fulfilled well the business,the target management,and investment plan.(1)The assets and liabilities in 2015 reach RMB 20,510,000 while RMB 22,460,000 in 2014,decreasing RMB 1,950,000.(2)The total liabilities arrive at RMB 95,400,000 in 2015 while RMB 123,200,000 in 2014,reducing RMB 27,800,000.(3)The net profit is RMB 820,000 in 2015 while RMB 660,000 in 2014,increasing RMB 160,000.Both advantages and disadvantages exist for medium and small seed companies to join a seed industry association.The advantages far outweigh its disadvantages to form an association based on the practice of Lvfeng Seed Company joining the association in the past two years.The seed industry association provides favorable conditions,such as the rich resources,abundant capital,and the reputations of large-sale seed enterprises,for subordinate companies to develop stronger and better.