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Problems Existing in Fund Management of Small and Medium-sized Carton Factory

Category:Industry NewsTime:2021-01-06 15:43:50 Visits:

From the end of 2016 to the first half of 2020, the domestic paper market ushered in a fierce price increase, which is so crazy that it is hard to find a piece of paper. At that time, because of the high unit price of waste paper, a roll of raw paper was difficult to find. Many large paper manufacturers required direct cash transactions, payment to delivery or advance payment, which brought a test to the survival of many small and medium-sized carton factories. Capital flow has become a life-saving straw for carton companies. The capital turnover period of the corrugated carton industry is generally too long. Therefore, it is necessary to conduct in-depth analysis from many aspects to strengthen the capital management efficiency of the carton factory to deal with the possible cash flow risks and enhance the competitiveness of the industry.


      The problems in the fund management of small and medium carton factories are as follows:

      1. Weak awareness of fund management

      Most carton companies have the concept of "sales is king", and they pay more attention to internal production and sales management. The focus of the boss and management is to pursue the scale of the company and expand sales revenue. The lack of cash flow is important The understanding of the time value of sex and capital. Most corporate bosses don’t know that there is a cycle of working capital. Anyway, when the company has no money, they find ways to get money in from various channels. They have never calculated how long it takes for working capital to be recovered and how long it takes for the working capital to be recovered. The impact of the period on the enterprise.

      2. The management of accounts receivable is relatively extensive

      Most of them are committed to ex post control. In order to cope with market competition and increase market share beforehand, carton factories have formulated a loose credit sales policy, which has led to long accounts receivable cycles and serious bad debts, and management’s assessment focuses on expanding sales. Rather than the quality of sales revenue, there is a lack of close inspection of customer credit status. Most of the carton factory sales staff are eager to promote sales for the sake of performance. They adopt a low profile for the trading conditions, especially the payment recovery. As long as the transaction can be completed, it can be done at any time. The result is blurred, and the transaction will be started. It was discovered that the problem was big when the money was paid.

      3. No negotiation initiative in the accounts payable cycle

      Because carton factories are in a weak position in the supply chain, most of the main raw material base paper belongs to the monopoly supply of the industry. It is the supplier’s market that has the final say. The general billing period of base paper suppliers is 15-30 days. The requirement for advance payment or cash transactions has caused the carton factory to pay accounts payable prematurely, occupy too much of its own funds, and cannot make full use of the short-term credit financing characteristics of accounts payable, which further slows down the turnover efficiency of corporate funds.

      4. Large inventory backlog

      The inventory of carton factories is mainly reflected in raw paper, semi-finished products, and finished products. The large backlog of these three parts is the management pain of most carton enterprises. There is no plan for the purchase volume of base paper. Generally, purchases are made two months in advance. After some special paper grades are purchased in advance, they become sluggish materials due to changes in customer orders but are not processed in time; the daily in and out of base paper are loosely managed, with the same paper grade and the same paper grade. Without effective control and data statistics, there is information distortion in the paper head, which directly affects the carton factory’s purchase decision and operation and production; the semi-finished product area cannot be digested in time, and the sales department randomly issues orders for stock, or orders that are cancelled in the middle are not processed. As a result, the backlog of semi-finished products is on the spot, and the production department is afraid to deal with it at will. As a result, the accumulation of materials in the semi-finished product area will accumulate.

      5. Feasibility analysis study of equipment investment

      The large-scale equipment investment project of the carton factory lacks scientificity, lacks prior reasonable analysis and demonstration, feasibility analysis, and payback cycle analysis, resulting in unsatisfactory input and output. The bosses of many corrugated carton companies are not tired of expanding the scale of their companies. They are very generous in investing in equipment. They always believe that investment will bring greater returns. For example, a corrugated box factory already has 3 4-color high-speed printing presses, with a monthly printing output of about 2 million square meters. However, due to various factors, the actual output is not up to the standard and the delivery cannot be made in time. People understand the real reason why the goods cannot be delivered, and think that they have to buy another printing machine to solve the delivery problem. The investment in carton production equipment is very large. The cardboard production line costs tens of millions of yuan, and the high-speed printing equipment costs three to five million yuan. If such a large investment does not plan in advance, evaluate the feasibility, and blindly increase it, it will only increase the number of cartons. The unnecessary operating costs of the factory may also bring the company the risk of tight cash flow.