Accounts receivable management a number of issues

Summary: Accounts receivable management is a measure of modern business management is an important benchmark advanced this paper from the accounts receivable function, accounts receivable management objectives and measures and other aspects to be addressed, for business managers learn.

Keywords: Management of accounts receivable

Accounts receivable is an enterprise product or service due to the formation of credit receivables, corporate liquidity is an important project. With the development of market economy, the implementation of commercial credit, business in general significantly increased the amount of accounts receivable, accounts receivable management business activities has become a very important issue.


First, the accounts receivable function and side effects

Accounts receivable function is its role in the production and management. Receivables occurrence means that companies have occupied part of the funds by customers, and companies holding the accounts receivable is a cost being the case, why firms willing to hold the accounts receivable it? mainly because of the following accounts receivable functions.

1 to expand sales, increase the competitiveness of enterprises, especially a weak market, tighter credit market conditions, companies had to take on credit sales, which companies sell new products, new markets also have a more important significance.

(2) reduce inventory, reduce inventory risk and management costs. Finished goods inventory held by the Company to additional management fees, storage fees and insurance expenses; the contrary, companies holding accounts receivable, you do not need the expense.

3. Mismanagement of the accounts receivable side effects. First, reduce the efficiency of the use of funds of enterprises, the enterprises have declined because of business logistics and cash flow is inconsistent, given commodity, out sales invoices, payment can not sync recovery, and Sales has been established that there is no recorded sales of money withdrawn from circulation is bound to have no cash inflows generated sales profit and loss, sales taxes paid and prepaid income taxes during the year, if it involves multi-year sales result in accounts receivable, you can generate advance corporate liquidity shareholders annual dividends. Second, the exaggerated business results. there are a large number of corporate receivables, inflated the book on the sales revenue, to some extent exaggerated the business results, increasing the company's cost of risk. The third is to accelerate the company's cash flow. Although credit to enable businesses to generate more profits, but did not really enable enterprises to increase cash flow, but the enterprise had to use our limited working capital to advance a variety of taxes and costs, accelerated the cash outflow.


Second, the accounts receivable management objectives

Accounts receivable management objective is to develop scientific and rational accounts receivable credit policy and credit policy in which the increase in sales and profit expected to adopt such a policy trade-off between the cost charged only when the profitability of increased sales over the use of this policy, the increase in costs to implement and enforce the use of this credit policy, while accounts receivable management also includes the company's future prospects and market conditions, sales forecasts and judgments, and accounts receivable security investigations, such as business sales are good prospects for safe accounts receivable, credit collection can be further relaxed its policy to expand the amount of credit, to obtain greater profits, on the contrary, its credit policies should be strictly appropriate, or different customer's credit rating to be adjusted to ensure that enterprises get maximum revenue in the case, but also to possible losses to a minimum.

Business accounts receivable management focus, is based on the actual business operations and enterprise customers to develop the reputation of a reasonable credit policy, which is the enterprise financial management is an important component, but also business accounts receivable management to achieve the purpose of must be reasonable to develop policy strategies. Links to free download http://www.hi138.com Third, accounts receivable management system and measures

Accounts receivable credit policy is a major part of the management system, including credit standards, credit terms and collection policies in three areas. A reasonable credit policy should be to the credit standards, credit terms, collection policies, together, consider the three comprehensive changes in sales, the opportunity cost of accounts receivable, bad debt costs and collection costs of each enterprise should be according to the specific market situation, develop appropriate accounts receivable management system, according to accounts receivable money management system for the analysis of corporate accounts receivable problems found take the appropriate measures to address the company's accounts receivable collection problems that arise, to accelerate the company's funding cycle, improve the efficiency of fund utilization to achieve business efficiency targets .

1. Strengthen the daily management of accounts receivable should be careful analysis of the enterprises in the daily management of accounts receivable, some doing not detailed enough, as the user's credit analysis, aging analysis of the preparation table etc. Specifically, the following aspects can make the daily management of accounts receivable: (1) make the underlying records to understand the users (including subsidiaries) the timeliness of payments, basic record-keeping, including business-to-user credit terms offered to establish credit relationships date, user payment time, yet the amount owed and the user changes the credit rating, the company has only to master the information in order to take timely countermeasures. (2) Check whether the user break credit amount. business customers a credit for each business, we must check whether there is more than the credit limit of records, and pay attention to test the user's debt exceeded the total amount of credit (3) control the user has passed the period of credit debt, closely monitor the user has the dynamic changes in debt due to contact with the user to take timely measures to remind them of their payment as soon as possible (4) analysis of accounts receivable turnover and average collection period, to see whether at normal levels of liquidity, corporate by the indicators, with the previous practice, and now plans compared with the industry, accounts receivable management to evaluate the successes and failures in and fix the credit conditions (5) refused to pay state visits, study accounts receivable are the percentage of non-payment, that is bad debt loss rate, to determine whether the corporate credit policy should be changed, such as the actual bad debt loss rate is greater than or less than expected bad debt loss rate, credit companies must look at whether the criteria are too strict or too loose, thus amending the credit standards (6) prepare aging analysis table to check the actual occupancy of accounts receivable days, to recover the supervision of their business, through the preparation of an aged analysis of the table, thus understood, how much is still owed the credit period , the timely monitoring, the number of arrears over the credit period to calculate the length of time out what percentage of each payment, the estimated number will result in bad debts, if most of the extended enterprise should check their credit policies.

2 strengthen the recovery of accounts receivable management (1) determine the reasonable collection procedures, collection of accounts receivable procedures are generally as follows: letter to inform, telegraph and telephone facsimile collection, sent to interview, access to justice, before taking legal action should be considered cost-effective, in case you do not have to prosecute the following situations: litigation costs exceed the amount of the debt claim; customers can offset the discounted collateral debt; small amount of the customer's debt, the prosecution may make the business run in jeopardy; prosecution withdrew the the possibility of limited accounts (2) to determine a reasonable method of debt collection and if customers do encounter temporary difficulties, the effort can make a comeback, to help them tide over the difficulties enterprises, in order to recover accounts receivable, accounts receivable for the conduct of general practice debt restructuring: to accept the market price of household debt to less than the amount of debt to cover non-monetary assets; alteration of debts in the form of "long-term receivables" to determine a reasonable rate, users agree to develop phased repayment plan; modified debt conditions, to extend the payment period, or even reduce the principal amount, repayment incentives; driven by common economic interests, the claims into the user's "long-term investment" to help start the loss-making enterprises, to achieve the purpose of recoveries, such as the customer has reached the limits of bankruptcy, the court should be timely in order to be part of the liquidation in bankruptcy settlement.

3 Accounts receivable accounting methods and management system. Subsidiary accounts receivable accounted for the total debt ratio should be strictly controlled within reasonable limits, such as more than reasonable measures should be taken promptly to improve. I work with practical suggestions as follows: (1) strengthen the management and monitoring functions, according to the principles of financial management within the constraints, the Finance Department setting up a financial monitoring group, from chief financial officer Lingdao full-time accounting staff, responsible for the accounting of marketing contacts and monitoring of the amount spent for each Yingshou analysis of accounts and accounting, accounts receivable accounts to ensure consistent, systematic and standardized so that business activities (2) improve internal accounting methods. for different sales, different customers, different accounting methods were used to show differences and take appropriate management strategies (3) is responsible for accounts receivable system and the first practice of lifelong responsibility of the person. who handled the business bad debt occurs, regardless of whether the transferred responsibility for the company, to be held responsible. the recovery of accounts receivable as a performance evaluation based on indicators (4) regular or irregular inspections of the marketing network for monitoring and internal audit. prevent the occurrence of embezzlement, corruption and financial issues such as cardiopulmonary bypass (5) to establish and improve internal control agencies system. receivables for credit business in every aspect of sound appropriate monitoring system, each part should be monitoring, not laissez-faire (6) regular meetings held in accounts receivable analysis, for each a the actual cause of the formation of accounts receivable, transaction analysis, and timely decision-making department for the relevant recommendations.

The quality of accounts receivable management, and business goals has a direct relationship a business accounts receivable management is in chaos, that is, do a better production, product quality, excellent again, futile as business leaders, must have a clear understanding of product development, technology management, production processes are all processes, only to sell their products to the market, and is the purpose of sale shall return To this end, each business accounts receivable management, there must be dedicated leadership fully responsible for tracking the financial sector, the relevant departments according to accounts receivable management system for the whole process of supervision, control, and timely measures to prevent the formation of stay accounts receivable, bad debts, only the sound system, and effective measures to ensure business results can be achieved. Links to free download http://www.hi138.com