The Research On Optimizing Internal Control Of Procurement And Payment In Zhang Jiajie Tobacco Company

Procurement and payment is an important part of enterprise’s main businessactivity, it directly affected production sales, cost, cash flow and other operatingelements. Establish and perfect the procurement and payment internal control system,strengthening the procurement and payment management to effectively prevent andrespond to business risks, improve the economic benefit is of great significance.At present, the tobacco industry is going through the transition period tocorporatization, marketization and internationalization. The whole industry is facedwith many challenges. On one hand, it has to deal with the brutal externalenvironment. With the policy barriers in the tobacco industry keeping weakeningsince China’s joining the WTO, the foreign competition in invading the market andgaining market share is becoming fiercer and fiercer. And the cultural orientation ofthe "eight rules" and "smoking is harmful to health" issued by the Central Committeeresults in the continuing market demand reduction. On the other hand, the tobaccoindustry itself has been implementing monopoly management for so long. It surelybrings high profits, but it causes problems like indifference to risk awareness andweak internal control, which makes tobacco companies began to realize theimportance of internal control. They initiate the establishment of internal controlsystem and focus on its gradual improvement. The procurement and the payment aretwo important parts of daily business activities in the tobacco industry. Therefore, toimprove the internal control on the procurement and payment plays an important rolein the guaranteeing the successful operation of the business activities, for it caneffectively control costs, reduce risks and increase economic benefits.Based on the review and summary of the domestic and foreign theories andpolicies of the internal control on the procurement and the payment and theconsideration of the internal control framework and application of internal controlguidelines, this paper presents three major aspects of the internal control onprocurement and payment, and they are the internal control environment, which is thebasis of internal control, the information platform which means the existingstandardized operating process platform and the processes of the procurement and thepayment, which is the standardized dynamic process of the control on the actualactivity operations.This paper takes Zhangjiajie tobacco company as the object of study, and finds out problems in many aspects, including the internal controlenvironment, the procurement and payment information platform, the procurementand the payment processes of cigarette, the procurement and the payment processes oftobacco, by analyzing its existing procurement and payment status. At the end of thepaper, it gives suggestions to solve the problems, which are the improvements of theinternal control environment, the purchasing and payment information platformcontrol and the cigarette and tobacco leaf procurement and the payment controlprocesses of cigarette and tobacco.Hopefully, the paper can help to improveprocurement and payment status of internal control of Zhangjiajie tobacco company,and can be a reference for other companies in the tobacco industry.