Financial mechanism

financial mechanism can be represented by a set of methods of the organization of financial relations, which are used by society to ensure an enabling environment in the economy.This mechanism uses the forms, methods and types of relations in the sphere of finance and methods of quantification.

financial mechanism has a complex structure, which consists of elements corresponding to various financial relationships.Due to the multiplicity of relationships determined by the use of a huge number of machine elements, which include financial planning and forecasting, as well as regulations governing the correctness of financial relations and, of course, control over the implementation of the use of different forms, methods and types of relations arising in the financial sector.

Based on these definitions, the basic elements (links) of this mechanism include:

- planning and forecasting;

- indicators, limits and regulations in the financial sector;

- financial management;

- levers and incentives;

- control.

Depending on the specifics of the various components of the economic sector, as well as on the basis of allocation of separate units relations, financial mechanism can be classified as follows: the financial mechanism of the organization;mechanism working in the insurance industry;the mechanism of public finances.Each of these, in turn, include a separate structural units.

All components of this mechanism in the complex should be a single entity, as they are closely interrelated and are in a constant relationship between them.In all of this, these units can operate independently, and this can cause a permanent coordination mechanism for all components.It is up to the internal coordination of all the structural elements of the financial mechanism depends on its effectiveness.

In other words, the financial mechanism - a set of methods, forms, instruments and tools of formation, the use of financial resources to ensure state needs.It also includes the needs of economic entities and the needs of ordinary citizens.

financial mechanism of the organization is a system of financial management of the subject.Its main goal - to make a profit.Financial mechanism of enterprise management provides a business entity with the necessary means that can ensure its solvency (the ability to timely settlement with the banks on borrowings, suppliers, etc.).

financial mechanism of the organization working in the system of economic laws and is aimed at:

- to provide finance in the form of lending, financing and self-financing;

- financial regulation submitted by taxes, subsidies and loans;

- a system of financial instruments.

in the structure of the financial mechanism of the organization are:

- methods that involve taxation, planning, forecasting, investment;

- leverage in the financial sector - the use of certain indicators of economic activity to obtain the greatest amount of profit (interest rate, amortization, exchange rates, etc.);

- informational, normative and legal support.

for financial management in the structure of any organization is the appropriate division or simply a specialist (a small enterprise).The main task of these units (specialist) is to implement the functions of finance in order to achieve high profitability, improve product quality and reduce costs.Only with effective use of the financial mechanism can achieve high profits in the company.