The essence of finance lies in the totality of economic relations, as a result of which the money is formed, distributed and used.
All these spheres are in close relationship with each other. Forms of financial relationships are a manifestation of this relationship.
The essence of finance implies the following monetary relations:
1.The monetary relations that take place between the state and households are manifested in the payment of taxes and compulsory payments to local and national budgets. The state conducts social payments, payment of wages to individual citizens.
2.Monetary relations between the enterprise and households (workers) consist in providing part of the budget of individual citizens through pay, social payments, dividends, and interest on securities.
3.Monetary relations of the enterprise with the state consist in providing the profitable part of local and national budgets with the help of tax deductions and compulsory levies, payments for rent of state complexes. The state, in turn, at the expense of budgetary resources of different levels, invests and provides preferential loans to enterprises.
Finances of individual enterprises are key to the formation of the financial system of the country, and also ensure its effective economic and social development.
Finance enterprises have a big impact onthe essence of finance in general, as they contribute to the rational conduct of cash flows in the country and their effective use in the process of the functioning of the economy.
The main functions performed by the company's finances are:
It causes the systematic formation ofthe required amount of financial resources, using various additional sources, in order to ensure economic activity and realize the intended objectives of the enterprise development.
This function is closely related to the resource-forming function.It optimizes the proportions of the distribution of the totality of all available resources through separate trust funds that provide financing for investment and operational activities, and return the principal amount of debt on loans received earlier.
With it, control is exercised.the results obtained from the investment and operating activities of the enterprise, and also controls the processes of formation, distribution and use of financial resources according to the planned budget.
From all the above, we can conclude that the essence of the enterprise’s finances lies in the aggregate of the processes of formation, distribution and use of the revenues of various enterprises.
