On the operation and management of accounts receivable

Abstract: To ensure the security of accounts receivable and accelerate the flow of funds, enterprises to strengthen the management of accounts receivable has very important practical significance. Article on the current accounts receivable management business to make a note of the status quo from within the company and up outside the two major aspects of the Analysis, and the corresponding accounts receivable daily work, internal control and risk management, rational and effective management methods and measures to increase the company's net income, reduce business losses.

Keywords: accounts receivable credit management

First, an overview of accounts receivable

<<Accounting Standards for Enterprises>> Definition of accounts receivable: sales of foreign enterprises for products, materials, supplies and services and other service units shall purchase or receive money collected. Specifically, the unit shall purchase or receive services Disbursement of funds or units in charge of transport fees, etc. For enterprises, accounts receivable is a kind of corporate debt in the accounts receivable occurs, the company signed with customers generally purchase and sale contracts or service contracts, and signing repayment agreement.


Second, the status quo of China's corporate accounts receivable

Widespread use of credit is the company's credit promotions, our corporate accounts receivable current assets accounted for more than a major, aging aging, a large bad debt ratio due to China's poor business sense of credit, financial management skill and other reasons, the vast majority of accounts receivable management business is basically a simple "collection" management does not exist to develop a detailed credit policy; accounts receivable amount of daily supervision and control of the occurrence; to take strict measures for the recovery of overdue accounts series advance the prevention, control and supervision of matter recovered after rigorous scientific and systematic management approach.


Third, analysis of the causes of accounts receivable

Companies use accounts receivable sales is certainly an effective mechanism of market economy, but it can also adversely affect the enterprise. Currently, many enterprises in China accounts receivable situation deteriorate seriously affected the normal operation of enterprises .

(A) Analysis of internal
1. The business concept has not changed and some corporate governance by focusing on the daily cost of expenditure control, cash flow have a more stringent approval system, but the accounts receivable and credit control system has been developed not pay enough attention. Business credit approval process does not specification, the object of the creditworthiness of credit under the conditions of lack of full understanding, rush delivery. operators to one-sided pursuit of high income, high-profit, blind credit, it can not correctly handle the relationship between short-and long-term interests, and ultimately the most resources into a great waste.

(2) the responsibility of the relevant functional depArtments are not clear. Some companies focus on the definition of the marketing depArtment, on the one hand is how to investigate, understand, develop, market share, sales to other indicators for assessing the marketing depArtment, the marketing depArtment focus only on marketing and sales, do not attach importance to the Days sales outstanding, sales and receivables of non-synchronization allows businesses to focus on sales and marketing staff to consider less clear debts, coupled with inadequate clearing debts, leading to business receivables shall not recover in time, coupled with financial sector clients on all debt information is not timely feedback, so that there is no real implementation of Sales Outstanding indicators to specific departments, and the resulting responsibilities of various departments is not clear, again and again, the amount of accounts receivable also high.

3 Accounts receivable routine control measures ineffective. Invoicing is not timely, did not communicate with the customer as soon as possible, resulting in prolonged collection; In addition, invoices should be rigorous, according to the actual situation and customer delivery requirements, such as the buyer information cargo specifications, finished units and invoice stamp cover the range, etc., should be strictly and carefully, to avoid the refund and unnecessary trouble and loss; some corporate finance department and sales, warehouse departments lack of communication, resulting in out of touch; accounts receivable owed to customers the amount of aging and changes in the unknown, meaning the risk is weak; no arrears classified according to the customer filing for failure to clear overdue accounts receivable collection, leading to emergence of bad debts , bad.

(B) the company's analysis of external causes
1. Oversupply buyer's market competition. With the continuous development of China's market economy, has been the formation of a buyer's market so that competition among enterprises and some companies out of competition, in order to expand sales and market share, not appropriate way to take credit, leading to a significant increase in accounts receivable, especially in the current financial crisis, economic environment.

(2) lack of specialized credit statistics agency, not to establish business credit database on the market do not have a department or agency specifically responsible for the overall statistics of the creditworthiness of companies, to establish a business credit database, so that business would be difficult to accurate, comprehensive access to the customer's credit information, and those malicious fraud, poor corporate credit situation is not fully reflected and records and to bring credit crisis. Links to free download http://www.hi138.com Fourth, accounts receivable management response

(A) a reasonable credit system
1 to determine the appropriate credit standards. Credit standards are the corporate decision to grant the customer credit the minimum standards required. Is an acceptable business risk to provide a basic criterion in the development of credit standards in the process, through comprehensive analysis to identify optimal balance.

2. Using reasonable credit terms. Credit business credit conditions to give the customer a deferred payment of goods of certain conditions to extend the credit period can expand sales, but the credit period is too long can also cause the opportunity cost of accounts receivable to increase occupancy, At the same time, increase the risk of bad debt losses. In order to facilitate early payment customers, enterprises in the provision of credit at the same time period can be attached to the cash discount terms.

3. Establish an appropriate credit limit. Credit is based on the customer's ability to repay the company to give customers the maximum credit limit is actually a customer of a company willing to assume the greatest risk exposures. To determine the appropriate credit line can effectively prevent excessive credit leaving companies to suffer losses in the credit market conditions and customer changing environment, companies should make the necessary credit adjustments to remain in the affordable range.

(B) to strengthen the internal control of accounts receivable management
1. The establishment of accounts receivable responsibility, the implementation of an accountability system fault. Enterprise sales person in charge should be responsible for business sales, according to who is selling, who is responsible for the principle to establish accounts receivable for the sales responsibility, the responsibility to implement internal delinquent loans , the recovery of the receivables and internal business units linked to performance appraisal for overdue accounts receivable caused by the business sector and related personnel, companies should be an appropriate way within the warning, resulting in bad debt losses for the business sector and the responsibility, corporate internal management systems should be deducted in accordance with its award wages. This measure will clean up the pressure on the layers of transfer of accounts receivable, as soon as possible to promote recovery of accounts receivable.

(2) adopt flexible and diverse collection of accounts receivable method. Accounts receivable accounts receivable is analysis of the risk analysis process, if necessary, to take certain measures to reduce the risk of accounts receivable in the work , we can borrow the ABC classification of inventory management in the management method of classification of accounts receivable analysis of overdue short customer inconvenience too much bother, you can notice by telephone or letter, to avoid the loss of this customer; not yet due customers can mildly worded letter collection; long overdue customers should frequent collection; the intentional or the above does not have the customer should be brought to arbitration or resort to legal authorities.

In short, companies to develop, we must expand product sales, is bound to credit, and credit is one of the basic method to expand sales and therefore the risk of corporate accounts receivable collection and the resulting financial risk is always co-exist, We should seriously study the accounts receivable control and management, to speed up cash flow, increase capital efficiency and reduce business risk, enhance competitiveness, reduce the risk of the accounts receivable, revenue greater.


References:
[1] high thinking and new <<business accounts receivable management status and strategies>> Hubei Social Science magazine, the Chinese People's Political Science and Law University Press, 2005.2.

[2] Gao Yan, Lin Song pool, <<On the corporate accounts receivable management>> China Politics and Law University Press, 2009.4.

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