Research On Cash Flow Management Of WQ Private Construction Enterprises

The construction industry is considered one of the main forces in creating job opportunities and prospering the Chinese economy.What distinguishes it from other industries is its unique payment model and the prolonged time it takes to present the‘final product’,both of which are responsible for a serious phenomenon-the Pay-in Construction.The direct impact is that enterprises will get stuck into a long cash backflow cycle and suffer from heavy financial pressure.For private construction companies that lack a solid financial support,insightful management awareness,and productive and tangible cash flow management methods,they have to confront with series of problems in terms of cash flow.In 2020,the State Council enacted the ‘Wage Protection Measures for Migrant Workers’ to increase the cash payment ratio of private construction enterprises,which further increases their financial pressure.It is safe to say that a continuous and smooth cash flow is the bedrock of an enterprise’s prosperity.Therefore,how to productively use the professional approaches to perform a smooth and stable operation of the cash flow calls for thorough discussion and exploration.The paper sets off by unfolding the general research background information and illustrating the research significance of WQ company,one of the private enterprises in construction industry.Next,the paper clarifies three specific study approaches including:reference to academic works,real-time interview and comparative analysis.To build a tangible and concrete research basis,the paper absorbs and distills the academic fruit achieved by both domestic and international cash flow management theories through the first approach mentioned,and draws the current picture of the characteristics of cash flow as well as the valuable management lessons we could draw from industry giants.At last,by analyzing the data related to the cash flow of WQ Company from 2017 to2020,the paper examined its real-time status quo from the Big Four Elements.By putting five renowned and advanced construction giants(CRCC,CREC,SCG,Longyuan Construction and Hongrun Construction)in line,the paper makes a comparison concerning cash flow management between WQ company and those five construction tycoons mentioned above.The comparison unveils three previously undetected issues in WQ company’s cash management: the mismatch of cash inflow and outflow resulted from a lack of strategic planning;the incomplete management procedure and the slow cash flow rate.To tackle down these existing problems,the paper proposes refinement and optimization measures accordingly by incorporating cash flow management experiences of advanced enterprises.Specifically,the measures range from making strategic plan in advance,achieving a balanced cash inflow and outflow to putting a comprehensive budget management system into practice and enhancing its management.Concurrently,WQ should put more emphasis on constant monitoring of its cash flow velocity.The measures proposed maintains both reference and application values.They can largely help WQ to avoid cash flow risks and accelerate the cash turnover ratio.For other similar private enterprises,they can maintain a sustainable development and make wise financial decisions by referring to the promoted measures.