Large Construction Enterprise "Cash Pooling" Model Research

With the continuous development of economic globalization and China’s market economy system, the trend of groupnization of our enterprises is getting more and more obvious. As our enterprise groups generally adopt multi-level corporate organizational structure, the funds of the group is being put in a decentralized state and the feedback of the cash flow information lags which will go against the decrease of the funds management and further improve the utilization efficiency of the group funds. So, it has become a very important part to utilize the funds standing on the group’s overall angle for enterprise group financial management even enterprise group operation management.The way of the management is the key for centralized funds. Modes such as unified collection and allocation state of the funds, funds transfer, internal bank, fund settlement center, financial companies have played a positive role in funds management for our enterprise group.The "cash pooling" management mode sprang up the end of last century is a kind of financial innovation of product cooperated by large enterprise group and commercial bank which can achieve maximum centralization of funds, being free of y geographical and administrative regions. By means of it, the enterprises can make internal capital allocation, decrease the cost of using the capital and monitor the using the capital so as to go play to the overall advantages of the group. As GE "cash pooling" landing in China in2005, more and more domestic enterprise groups adopted this pattern of centralized management of funds, but the theory and practice on the pattern of " cash pooling " are not deep enough in domestic, it will be not conducive to give full play to the advantages of the mode. Therefore, further discussion has been made in this paper by means of the case analysis under the guidance of theory. I t analyzes the advantages,the potential risk and restricting factors of the "cash pooling" model in detail, through the theory discuss on centralized fund management from two aspects of theory and practice. Combined with selected case-the model construction, implementation and effect analysis of the "cash pooling" for Z enterprise group, optimization measures has been put forward, in order to provide support and reference on how to improve the management level and efficiency of funds of our enterprise group.Five parts for this paper.The first chapter is introduction, the research background and significance have been put forward and the research train of thought and innovation points has been introduced.The second chapter:mainly introduces the theory on the fund management modes for enterprise groups and the influencing factors of management mode choice.Chapter3:the early problems and cause analysis on the funds management for Z enterprise group.Chapter4:case analysis. Analyses on the reasons of choosing pool management mode, the implementation of the cash pooling process and the management effectiveness are brought into Z enterprise group.Chapter5:the countermeasures and suggestions on how to strengthen the "cash pooling" management mode for Z enterprise group.In this paper, based on the operation of the "cash pooling" model, the main innovation point lies on the application research combined with the particularity of the construction industry funds management. This paper thinks, for the large construction enterprise groups which the funds utilization are monitored by various aspects, it is suitable to select " cash pooling " mode for centralized funds management.It is the parent company of enterprise group that will endure the ordeal while implementing the "cash pooling" model. As for the way of funds centralization of member units, the two-wheel drive systems such as the rewards, the punishment system and benefit sharing have to be considered. The risk of false increasing of the money within the "cash pooling" should be controlled strictly as while.