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When competing for funds, it is necessary to determine which solution can generate more capital returns: as the department that applies for and uses funds, it must know whether the funds are not a free lunch and can meet the capital cost requirements. The ideal financial management system should be able to provide capital costs, such as expected interest rates, expected returns, income recovery cycles, risk and volatility, and information support for the parties who allocate funds. At the same time, it should provide capital for the recipients of funds. Information support on cost and expected return assessment standards, fund use strategies, etc.

(2) Business Management

The characteristics of the financial management system determine that it must have direct, frequent and close contact with all business departments (Figure 1). The collection, classification, summary, analysis and management of financial information are all rooted in business activities. More importantly, only by understanding the operating procedures, key control points, decision-making models, etc. of each business system can we collect processing decision support information in a targeted manner.

For example, if the actuarial system plans to evaluate the profitability of products promoted by the marketing system, then a considerable amount of costs will be obtained from the financial management system. The financial system provides data in this area, which cannot be separated from the understanding of product characteristics, marketing methods, front-line personnel structure and corresponding labor costs, and also cannot be separated from the decision-making model. and understanding of analytical techniques. Only with a full understanding of the many aspects of both business systems can a financial management system provide real, relevant decision support information. Only with a comprehensive and in-depth understanding of the business system can basic and important financial information reflecting profitability, potential risks, etc. be fully disclosed. The efficiency of capital flow utilization is closely related to the business system, and has the following basic principles: ① The principle of capital cost compensation; ② The principle of reasonable stock and flow structure: ③ The principle of time matching between capital flow and business needs; ④ Pre-planning and budgeting, and in-process control and execution , the principle of combining post-event feedback analysis. It can be seen that capital flow management must be combined with the strategic planning, tactical play, instructions, plans, requirements, information feedback, etc. of each business system.

(3) Expense control

Expense scale control is the core of the company's financial management work.

The basic idea of ??expense scale control currently implemented by insurance companies is: based on the principle of revenue first and expenditure later, accrue available expenses according to a certain proportion of premium income, and then control the total scale of expenses not to exceed the company's The amount you can afford. The calculation of the expense accrual ratio is based on the sales budget. Various factors are combined to give the "expected" results of each item of direct expenses and indirect expenses, and then a "compromise" accrual ratio is derived. The purpose of budget control is the scale of expenses, but the control force must be directed toward "behavior" rather than the final result (scale of expenses). To put it another way, we cannot simply “squeeze” costs in terms of scale, but we must clarify the causal relationship between budget input and corresponding actions, and improve the input-output ratio of resource use.

If we compare funds to an arrow and imagine the target as the location of capital allocation, then efficiency must be achieved through aiming - the more accurate the aim, the closer the arrow is to the bullseye, the more efficient it will be. ; And effectiveness is to complete a series of archery actions through the "decision-making" process of pulling the bow and releasing the arrow. The cleaner the action, the more effective it is. The allocation and use of funds is similar. Without "price" (cost of capital) as a market mechanism to aim at, the arrow of capital cannot hit the bull's-eye and generate benefits; however, blindly bargaining and demonstrating benefits may lead to loss of opportunities and lack of action. In the fierce market competition, corporate funds must not only be efficiently allocated to the areas where they can be most effective, but also be effectively allocated and utilized.

The objects of financial management and control are funds and expenses, and the aspects of control are benefits and risks, and the implementation of control must achieve a balance between effectiveness and efficiency.

Using the ABC method and "Acvity-based Budgeting (ABB)" is beneficial to cost control. According to the existing budget management ideas, expenses are divided into three parts: business, capital and expense. Let’s start with the expense part. The basic idea is that “operations consume resources, and products consume operations.” Set up a cost library for direct expenses and indirect expenses, decompose cost drivers, and collect expenses to various departments and personnel through the links of cost drivers. Even on the product. Not only can relatively accurate cost and expense collection results be obtained, but more importantly, the direction, reasons and corresponding outputs of enterprise resource investment can be clarified. From the perspective of scientific budgeting, by measuring the reasons for the occurrence of operations during the budget period, the number of operations and the corresponding investment in each operation link, a budget can be made from the level of "operation behavior". At the same time, the incentives and controls for budget management are carried out from these three aspects for the responsible persons in each link.

The current cost control is a rigid mechanism of "premium sharing". This mechanism is very effective - simple, objective and easy to operate. But there is a lack of efficiency – resources are not allocated optimally.

Especially when the actual use department of a certain fee has a certain grasp of the input-output efficiency of the use of a certain fee, the premium sharing mechanism of financial management will be in an awkward situation - if we talk about efficiency, it violates the cost and budget regulations; if we talk about effectiveness, it will violate the cost and budget regulations. It cannot resist the "reason" and "power" of the fee-using department. We believe that the financial management department can currently make two improvements: ① Study operation budget management, build an expense control mechanism based on operation and input-output analysis, improve the input-output ratio of fund utilization, and take the initiative in "efficiency": ② At present, Under a control mechanism, expense control personnel will be given a certain amount of flexibility based on the level of financial personnel and the actual business situation.

In addition, the management and control work itself must also have an input-output mentality, and be clear about how much cost is invested in each management and control link, and the controllable inefficiency, ineffectiveness, and waste losses (collectively referred to as "error costs") And how big. As shown in Figure 2, the total cost (control cost + error cost) of control accuracy at the ideal level is minimal. This principle is abstract, but it sets out the basic elements for designing the breadth and depth of a control system.

(4) Decision execution

Execution management is the control of the financial decision execution process. The uploading and distributing of information in company management and the specific execution of resource allocation all rely on the financial management system. The financial management system has some "natural advantages": mastering financial information, being directly responsible for the allocation of funds, understanding the principles of company management and resource allocation, and having a financial sensitivity to the business, etc. However, these advantages often also contain certain "natural disadvantages": "paradoxes" between real financial information and performance evaluation, "conflicts" in fund allocation and expense, "incompatibility" between rigid principles and flexible specific businesses, etc. It can be said that the financial management department is the intersection of many contradictions in the company's daily work. So, how to effectively resolve various conflicts and straighten out the company's daily management work is a meaningful topic.

We believe that the following model should be used to complete the execution process:

1. Image Financial managers must first position their department's overall image in the company. And always learn from other people’s feedback how other departments perceive you. According to the "mirror principle" of psychology, everyone has a cognitive mapping of their own image in their mind, and people's daily behaviors are affected or even restricted by this cognition - the more you think you are, the more you think you are. The more you will develop into what kind of person. We believe that the financial management department should establish a healthy image of decision-making support, risk management and control, and business services. And this image should have the qualities of service, convenience, transparency, fairness, efficiency and a considerable degree of human touch.

2. Task In order to grasp the ins and outs of various contradictions, it is necessary to understand the ideas, strategies and specific plans at the specific stage and management level. Based on this, financial management can clearly understand what its tasks are, what the main contradictions are, and where are the "big similarities" and where are the "minor differences." Financial management work can clarify the main aspects of financial management work at each stage from the aspects of 5W+1H (why, what, where, when, who + how). It is necessary to analyze the direction and rhythm of the work of the business department, and at the same time integrate image elements into specific task formulation.

3. The implementation of the current financial management system is basically "Rule-based" - the head office has the power to formulate rules and implements centralized management (Centralization), and uses a document system to implement detailed work at the grassroots level. "Rigid" regulations. As the quality of financial management personnel of insurance companies improves, in order to adapt to the requirements of business development in the new era, a "Financial Management Framework" can be established to improve the execution quality of financial management work.

4. Communication Quite a few conflicts are caused by lack of communication. First of all, it is necessary to communicate concepts, clarify functions, understand business policies, and explain "significant" financial policies with senior management at all levels of the company. Secondly, it is necessary to communicate with the heads of business departments to explain and clarify financial rules and principles, and understand business ideas. and specific difficulties: Third, in daily specific work, the principles, functions and procedures of financial management must be fully popularized among personnel in all aspects, and relationships, rights and responsibilities must be clearly streamlined.