On The Difference Between Financial Thinking And Accounting Thinking

　　 First, Financial thinking What is the difference between accounting thinking and accounting thinking?

In our work, we often find that people who work in accounting for a long time have very hard thinking patterns. They are more conscientious and are more serious than others. They like to kill a child. They like to be sharp minded, stubborn, rigid, narrow minded and closed minded. They are accustomed to talking about things and are often suspicious of new things. This kind of performance can be generally called "accounting thinking". Of course, things are not absolute. There are also excellent personages who have long experience in accounting work but can jump out of their inherent thinking through their own practice. This is a "general" and "handsome talent" who are both pragmatic and innovative. Accounting is the language of economic activities. In fact, all people engaged in economic activities should understand some accountants, otherwise they can not communicate with others, but it is not enough to know only a few things. They must also understand the essence of accounting and go beyond it. We must harness it instead of being controlled by it. Looking at our work and life, "accounting thinking" is omnipresent. Many of our decisions are based on past judgments, and based on the present judgement of the future, we fall into the quagmire of empiricism. Accounting work is essentially a reference for decision making, and it is a kind of data. However, the various prediction models produced by it almost monopolize the decision-making behavior itself. That is to say, accounting thinking must be promoted to "financial thinking". The so-called "financial thinking" is based on business, based on the future factors affecting the operation of a scientific plan. Such a plan should consider the past data, but not only in the past, but also in consideration of various factors in the future. To consider its own data, it is more important to consider the factors of environmental change such as competitors and alternatives, not only to consider accounting data, but also to consider all kinds of non formatted data, such as various behavioral data, which can not be reflected in accounting statements. In the Internet era, technology has made the analysis of big data deepen day by day, and the market has made the enterprise change rapidly. For enterprises, it is clear to understand the difference between accounting thinking and financial thinking, abandon the backward accounting thinking, and quickly upgrade to the level of financial thinking, which is undoubtedly of practical significance for optimizing enterprise's heavy and big decision.

　　 Two, financial thinking and Accounting thinking Concrete manifestation of differences

Professor Lv Zhaode talked about the ten basic concepts of corporate finance. Conscientiously understanding these concepts and analyzing their cognitive errors in real life helps to understand the specific characteristics of differences between financial thinking and accounting thinking.

1. Extra risk Additional benefits must be made for compensation. This is what we often say about risk and return, but it is nonlinear. Because of its relevance, we should not unilaterally emphasize revenue and ignore risk, that is to say, "there is no free lunch in the world". Because of its nonlinear correlation, financial management is a discipline. It is possible to use scientific means and technology to obtain relatively high returns. Rigid accounting thinking is not easy to make clear these dialectical relations. The common mistake is: to be afraid of risk, to deduce risk from past experience, and not to see the huge profits that may arise from taking necessary risks in the future, and to lack the sense of operational risk; or one-sided superstition, that the past has come this way, and that we can still make money in the future, and we can not see that the changing situation is pregnant with great risks, and it is easy to fall into the trap of risk. Another mistake is to think that others will act on their own and do not see the differences in their natural endowments and their different stages of development.

2, money has time value. The currency has the present value and the final value. Today's dollar is not equivalent to one yuan tomorrow. This is financial thinking. However, accounting thinking is easy to calculate only flat accounts. It is reckless to confuse oneself. When it comes to losing money, it must also help others to count the money without complaining. A typical example is borrowing between friends and relatives. There are few interest rates and few IOU. This is actually a fuzzy settlement of human factors and credit together, because the two sides are inconsistent in understanding, and in the end, they are basically two shots and friends, so borrowing money can be regarded as a killer of family and friendship. The essence of this matter is not really understanding the value of money.

3, value measurement should consider cash rather than profit. The development of enterprises is to make money, but whether they really earn money is not enough to look at profits. What is more important is to look at cash flow. Cash is king, which is more important in the economic depression. If you only look at the book numbers and make a lot of profits, this is obviously accounting thinking. We must jump out of the figures and analyze the cash flow carefully so that we can have a relatively accurate judgement. The death of an enterprise is often due to the lack of profits. It is because there is no cash to turn around and cause instant death.

4, only incremental cash flow is related to financial decisions. If cash flow does not increase, of course, it's just a busy business. The past is past. Our decision is to focus on the future. It's hard to say, but sometimes it's hard to be rational, and emotionally cruel. For example, we have already lost a lot of money when we stop investing in stocks. For a long time, we should sell the stop loss, but we always want to turn over the market and we can't afford to sell. For example, the promotion of a large contribution employee as a manager, knowing that he is incompetent or promoted, results in work and harm to him. Rational choice should be based on merit.

5, there is no particularly high profit item in the competitive market. We should not be obsessed with profiteering. Even if it is temporary, it happens in some unusual cases. For example, the high profits of coal and the high profits of banks are all the same. People accustomed to accounting thinking are apt to turn these contingencies into a fixed mindset. We must jump out of this mindset.

6, the capital market is effective and the price is reasonable. The market is smarter than the government, and the market itself is smarter than every market participant. At present, many people in China think that the price of the stock market is unreasonable, but there are many reasonable factors. For example, the bank's share price seems to be low, but the banking industry's short-term behavior is serious, the overdraft situation is more prominent in the future, and the stock is expected for the future, so the price of bank shares is high without any reason. With financial thought, you can understand it.

7, the separation of ownership and control leads to principal-agent relationship. The core of corporate governance is principal-agent relationship. In this respect, accounting thinking and financial thinking should be promoted, otherwise it will not be cleared up, especially the big accounts and strategic accounts. If a company earns money, it should prevent shareholders from making money. Shareholders make money, but also prevent short-term money making and not making money for a long time. There are many things that can not be reflected on the books, and some qualitative things may be more important than quantitative ones.

8, taxes affect financial decisions. Paying taxes is a cash flow and an important factor. How to analyze, we still need to jump out of numbers and directly address the essence of the problem. For example, the camp changed to increase, mainly for the service industry, originally according to the business tax, now changed to VAT, seems to reduce taxes, but in fact not necessarily. This should be analyzed in detail. Especially for some service enterprises that violate the law and discipline, it is likely that they will be closed if they do not operate properly. For example, some beauty companies are involved in cheating and cheating. The cost of entry is very low, almost no, and the income from sales is very large. That is to say, it is important to see who is beneficial to the increase of the camp. It depends on whether he is legally compliant. This is very important, because at present, the enterprises who violate the law or at least play the edge ball are few.

9, risk can be divided into risk diversification and non dispersible risk. In the enterprise finance, we must distinguish these two kinds of different risks. We must resolutely avoid risks that are not dispersible.

The risk of decentralization can be appropriately undertaken and specific measures for risk diversification should be provided.

10, there are moral traps everywhere in financial business. Finance is a service industry characterized by debt management, which has a strong externality effect. When financial institutions deal with debt party customers, customers are in a weak position and are always being exploited. On the other hand, when the financial institutions are dealing with the clients of the assets, the banks are in a weak position, and the information asymmetry can not be overcome, and they are always at risk of being refunded. The soft constraint of bank assets and the hard constraints of debt will inevitably lead to liquidity risk. So in general, bank operation is a risky business.

　　 Three, strengthen financial thinking to enterprise management and management work enlightenment.

1, in order to reveal the past or face the future, we should clarify the responsibilities and boundaries of accounting and financial work. To prevent the two from mixing up, or doing the same thing over and over again, or to do something important. At the same time, the two must be linked up, accounting is data flow and information flow, and financial work is workflow and material flow. Accounting work is for financial work, should consider the needs of financial work. For example, the design of accounting subjects and the establishment of accounting system should not only adapt to national standards, but also consider the needs of business management.

2, build a financial system for the future. The chief financial officer or chief financial officer should play an important role and play a more important role in the operation of enterprises. Financial work should consider the requirements of strategic work more, and consider more macro factors, intangible elements and various formatted data. Financial decisions should constantly overcome the inherent mindset and have both the soundness and innovative thinking characteristics. It is necessary to continuously improve the judgement of uncertain factors in the future as the core competency of financial workers.

3, we should extend the characteristics of financial thinking towards the future to every aspect of business management. The so-called strategy is based on the future and the overall situation of a mode of thinking, in a sense, financial thinking and strategic thinking are interlinked. For example, employing people should also face the future and face the future of the overall business situation. When the enterprise develops to a certain stage, it is necessary to prevent the veterans from eating old books, and to prevent the airborne soldiers from eating dividends. All of them should be taken as a decision-making standard to promote the future growth of enterprises. We must resolutely abandon the practice of "emotionally, blindly superstitious" "foreign monks chanting chanting" and so on, which do not conform to the principle of seeking truth from facts. Similar thinking should also be introduced in other aspects of decision-making in enterprises.