General Concept of Enterprise Finance

Enterprise finance is a set of economic relations that arise in real circulation regarding the formation, distribution and use of financial resources. Finance as an economic category mediates monetary relations in the process of movement of financial resources in private and state legal forms, the formation and use of private and state revenues on this basis as a result of the activation of financial mechanisms and the use of financial instruments.

Real money turnover is an economic process that causes the movement of value and is accompanied by a flow of cash payments and settlements.

The object of real money turnover is financial resources - their own sources of financing for expanded reproduction, which remain at the disposal of the enterprise after the fulfillment of current obligations for payments and settlements.

The finances of enterprises function within the framework of the financial system of the state. They are its foundation. {Therefore, all changes in the finances of enterprises are associated with changes in the financial system of the state.} As an economic category, finances depend on changes in the relationship between the links of the financial system. This applies primarily to the relationship between macro-level finance and micro-level finance. Macro-level finance, represented primarily by the state budget, is based on the financial potential of enterprises.

An important methodological factor is the definition of the principles of organization and functioning of enterprise finance, which is necessary to identify areas of influence of enterprise finance on the development of the business sector of the economy, and to develop criteria for its functioning. At the same time, it should be taken into account that finance is not isolated within the framework of enterprises, but constantly interacts with the budget, extra-budgetary funds, banks and other creditors, insurance companies, and institutional investors.

The financial relations of enterprises, depending on the economic content, can be grouped into the following areas:
- arising between the founders at the time of the establishment of the enterprise regarding the formation of the authorized capital. In turn, the authorized capital is the initial source of the formation of production assets, the acquisition of intangible assets;

- between enterprises and organizations associated with the production and sale of products. These include financial relations between the supplier and the buyer of raw materials, materials, finished products, with communications enterprises, customs, etc. These relations are the main ones in economic activity, since the financial result of commercial activity depends on their effective organization;

- between enterprises and its subdivisions, branches, workshops, departments regarding the financing of expenses, distribution of profits;
- between the enterprise and employees in the distribution and use of income;
- between an enterprise and a higher organization, within financial and industrial groups, within a holding, with unions and associations. These relationships arise in the formation, distribution and use of centralized trust funds, marketing research, research work. This group of relations is associated with the intra-industry redistribution of funds and is aimed at supporting and developing enterprises;

- between the enterprise and the financial system of the state when paying taxes and other payments;
- between the enterprise and the banking system;
- between the enterprise and insurance companies;
- between the enterprise and investment institutions in the course of investment placement

Each of these groups has its own characteristics and application environment. The finances of enterprises are based on information flows. The analysis of incoming information is important both at the time of making a decision and in the process of monitoring the progress of its implementation. This information is contained in accounting and statistical reporting, contracts and agreements, commercial and settlement documents, etc. The financier of the enterprise constantly works with them.

The finances of enterprises have a target orientation, which leaves an imprint on all aspects of activity, including organizational, commercial, investment, contractual, etc.