Group’s Financial Control System

Group, an important organisation form, is playing an important role in theeconomic development, reflecting a country’s competitiveness in the world. In theuncertain and competitive market, Group has to establish an effective managementcontrol system, to achieve the economics of scale and synergies, further strengtheningthe core competiveness and sustainability of development. Financial control is criticalto the Group management control system.By studying the basic concepts of Group company and group financial control,and looking at the differences between the Group company and individual company,this paper focused more on the specialties of Group company financial control, suchas how to allocate the financial resources, financial results properly among theheadquarter and subsidiaries, also what to be considered when allocating. The purposeof building up the Group company financial control platform is to solve the corequestion---allocation of financial resources. This platform should base on the basicfinancial control mechanism and proper structure of concentration and allocation. Inpractice, the group company use comprehensive budget control as an effective tool,through centralized cash management, investment management, assignment of CFOsystem and IT technology, to realize the group financial control. The goal is to sharethe resources, develop commonly, realize mutual benefits among the group, andfinally to maximize the total value of group company.Based on the theory outlined in the study, combined with Yantai Wanhua’sfinancial management and control status, from building the system, improve thecorporate governance structure and organizational structure of roots, and separatelyfrom budgeting system, cash pool management, human resources management andinformation system, and makes recommendations on it. I hope the paper will assistother organisations in designing and optimising financial control system.