Cash flow is an important indicator to measure whether an enterprise is in good operating condition, whether it has enough cash to repay debts and liquidity. Similarly, cash flow management is also an important function of enterprise financial management activities, and establishing a perfect cash flow management mechanism is an important guarantee for effectively preventing cash flow risks and improving enterprise market competitiveness.
Causes of the problem of "cash flow"
Cash is the most liquid asset among enterprise assets and plays an irreplaceable role in enterprise production and operation. Construction enterprises generally face the following problems: high capital demand and investment cost in the early stage, high debt ratio, long repayment period in the later stage, slow withdrawal of funds and great difficulty in project repayment. Therefore, compared with the general industry, it faces higher capital risk. Through the above-mentioned reasons for bankruptcy liquidation of super-class and first-class construction enterprises and the analysis of the current domestic construction market environment, the following problems generally exist in cash flow management of domestic construction enterprises:
First, ignore the credit risk of the construction unit.
The competition in the construction market is fierce, and the domestic construction market has been in an obvious buyer's market for a long time. In such a market environment, construction units occupy a favorable market position, while construction enterprises are in a relatively passive state. In order to undertake market business, construction units often ignore the corresponding credit risks, and even obtain projects through advance funds, which lays hidden dangers for the business development of enterprises.
In fact, the construction unit's project scale, credit status, source of funds, financing ability, business style and debt repayment ability all affect its own credit performance ability, which is directly related to project payment and project completion settlement. If some construction units are weak in their own strength and lack sufficient construction funds, there may be problems that construction enterprises can't pay the project funds in time during the construction process, and even stop work due to insufficient construction funds in serious cases. It is not only difficult for construction enterprises to obtain the corresponding project payment settlement, but also may be funded by the labor and material supply costs of migrant workers, which leads to serious cash flow risks in their operations.
Second, cash deposits and corporate financing issues
In the field of engineering construction, construction enterprises need to pay bid bond, performance bond, project quality bond and migrant workers' salary bond. Under the traditional form of cash payment, the four types of project deposits have some problems, such as huge amount, long occupation period and irregular return management, which have caused heavy cash flow burden to construction enterprises.
At the same time, for a large number of small and medium-sized construction enterprises in the domestic construction market, there are naturally financing management risks such as "insufficient credit guarantee", "lack of mortgaged high-quality assets" and "irregular financial management". And under the influence of market information asymmetry, it is difficult for banks to obtain a large number of business information of SMEs in time and make accurate risk identification, which makes it difficult for SMEs to obtain credit financing from banks.
How does engineering guarantee insurance deal with the cash flow risk of construction enterprises?
Practice has proved that replacing cash deposit with engineering guarantee insurance can effectively revitalize the working capital of enterprises and reduce the financial pressure of enterprises. The whole process risk management service it provides can also effectively prevent various credit risks in the process of early warning projects and accelerate the improvement of the credit system in the construction market.
First, reduce the financial pressure of construction enterprises.
Under the traditional project deposit management system, the cash deposit of10 million yuan has caused heavy cash flow pressure to construction enterprises. As one of the innovative alternatives to traditional project deposits, project guarantee insurance can leverage the amplification effect to leverage large cash deposits with less cost, release the huge margin pressure of enterprises and revitalize the cash flow of enterprises.
At the same time, the project guarantee insurance does not occupy the credit line of the enterprise bank, and there is no need for pledge and counter-guarantee. While fully releasing the pressure of enterprise margin, it can also strengthen the borrowing ability and improve the anti-risk ability of enterprise capital chain.
Second, the role of risk management in the whole process
Different from traditional engineering insurance products, engineering guarantee insurance introduces third-party professional risk management services, participates in the whole process risk management of underwriting projects, carries out pre-underwriting risk assessment, post-underwriting risk investigation and early warning, and conducts coordination and claims settlement after insurance accidents, so as to prevent and deal with various credit performance risks in a timely and effective manner.
Pre-underwriting risk assessment: third-party risk management institutions will provide insurance companies with opinions on whether to underwrite according to the credit rating, financial statements and historical underwriting records of the insured during the pre-underwriting review stage; And put forward corresponding evasive opinions on the possible risk factors of insured enterprises and projects.
Risk investigation in underwriting: After the project is underwritten, the third-party risk management organization will conduct regular inspections to identify and warn the possible risks in the project and avoid the possible risks.
Accident collaborative claim settlement: In case of an insurance accident after insurance, the third-party risk management institution will cooperate with the insurance company to follow up the accident treatment after the risk event, and conduct evidence collection, confirmation and early intervention to ensure quick claim settlement.
Third, improve the construction of the credit system in the construction market.
The essence of engineering guarantee is credit guarantee. As an innovative management form of engineering guarantee, engineering guarantee insurance can effectively prevent and avoid all kinds of credit performance risks by providing risk management services to the whole process of credit performance. Especially under the credit rating differentiation rate and credit default recovery mechanism, it is conducive to strengthening the awareness of credit performance in the construction market, standardizing the credit performance behavior of the main body of construction activities, and promoting and improving the construction of credit system in the construction market.
With the change of business philosophy of construction enterprises, the cash flow management and risk prevention of enterprises will also change, and a set of management methods suitable for the sustainable and stable development of enterprises must be established. Replacing cash deposit with engineering guarantee insurance can not only effectively avoid the credit risk of enterprises in construction activities, but also ensure the benign flow of cash flow of enterprises, and provide support for enterprises to make business decisions and formulate long-term stable development strategies.