Research On Procurement And Payment Internal Control Of Small And Medium Enterprises

Internal control is an indispensable part of a company. Whether a company can have a good sustainable development depends on the scientific design and reasonable implementation. At present, compared with other countries in the world, China’s economic growth rate is still high; the competitions among enterprises are fiercer, the company’s internal control system is experiencing unprecedented challenges. In recent years, our country has made great progress on development of internal control. A series of regulations and policies have been enacted, such as "Enterprise Internal Control Specifications" (2008), Three" Enterprise Internal Control Guidelines ", they are "Application Guidelines of Enterprise Internal Control" (2010), "Audit Guidelines of Enterprise Internal Control" (2010) and "Evaluation Guidelines of Enterprise Internal Control" (2010), etc. But compared to the advanced Western countries and advanced enterprises, the development and implementation of internal control system in our country still have a long way to go.Although the country now vigorously promotes the establishment of internal control system, but the focus of attention is always the listed companies and large enterprises, small and medium enterprises (SMEs) are often ignored. As we all know, SMEs are an important part of national economy, in the current economic environment, it is particularly important to commit to the establishment of internal control system in SMEs. Among the internal control systems, procurement and payment cycle is most prone to fraud and cheat. Especially SMEs are always small-scale with fewer staffs; employees often wear many hats, enterprises lack of scientific management concepts and tools. Thus the research on procurement and payment internal control system is significant.In this paper, I took the method of combination of theory and practice. At first, I explain the basic theories of internal control and the results of previous studies of internal control, then analyze the current situation of small and medium enterprises and the implementation of the internal control system, at last, based on the understanding of procurement and payment cycle of Shanghai QH Company, point out the problems in this cycle, and offers the general idea of improvement. My purpose is to improve the company’s internal control system to the further step which could have a practical significance to improve the company’s competitiveness. What’s more, QH is a typical SME of China, its problems in procurement and payment system are also existing in other SMEs, so this research has general significance for China’s SMEs.