What is an internal bank? What procedures should an enterprise follow to set up an internal bank? Are there any relevant laws and regulations?

In business operation, business departments and other departments will ask the financial department to receive and pay for their business and daily work. The receipt and payment of funds and the timing of receipt and payment will obviously affect the use of funds by enterprises, and the expenses occupied by funds are an important factor affecting the profits and losses of enterprises. Therefore, it is necessary to find and confirm the business departments (and other departments) that occupy or contribute funds within the company, and further analyze the use of funds in each contract, so as to realize the correct assessment of the performance of each department through objective quantitative analysis of the contract.

Foreign borrowing by enterprises will generate interest expenses, and foreign borrowing will generate interest income. This will be reflected in the external financial accounting statements. However, the use of its own funds (including equity, provident fund, etc.). ) There are also opportunity costs, which cannot and should not be reflected in external statements. therefore

In fund management, the use cost of self-owned funds should be included in the analysis of the capital occupation cost of internal departments (even salesmen).

In ERP, through the virtual profit center of self-owned funds, the cost of using self-owned funds is charged to the company on behalf of the company owner (see "Six-layer structure of fund use" below).

Note: The profit center and the following master contracts are the main parts of the ERP management accounting module. For the integration of management accounting and fund management, please refer to the cash flow statement in ERP.

[internal bank]

An internal bank is an organization that accounts for the occupation of internal funds. Many enterprises have established internal banks in practice. These internal banks have entities and financial personnel responsible for internal revenue and expenditure accounting. In the ERP system, the internal bank is the profit center. Different from the original accounting organization, the internal banks in ERP system do not need financial personnel to calculate revenue and expenditure one by one. As a part of management accounting and fund management module, internal banks receive business and financial data and automatically calculate the balance and interest of deposits and loans of internal banks.

Note: Please refer to "Fund Management in ERP" for the information of business department and financial department of an enterprise that is automatically received and converted by the fund management module.

[Six-tier structure of fund use]

As shown in figure 1, ERP divides the objects involved in the use of funds into the following six management levels:

On behalf of the company owner, the virtual profit center with its own funds on the first floor collects the fees from the internal bank for using its own funds.

Secondary internal banks use funds as a whole, and are responsible for the overall capital operation of the company (cash forecast, investment, debt and equity), and charge the profit center for the use of funds.

When the deposit and loan in the profit center of the third-level department are unbalanced, they get interest subsidies from the internal banks. The profit center on the fourth floor is only responsible for the use or contribution of its own funds.

The fifth-level master contract accounts for the profit and loss of each bill business, including internal bank interest.

The purchase and sale orders signed with external suppliers or customers under the main contract (budget sheet) of the six-level sales contract and purchase contract are the reasons why the business department occupies funds.