 Posted: Thu 19:31, 28 Apr 2011 Post subject: Accounts Receivable Management Strategies of Enter |
|
| Management Strategies of Enterprises Accounts Receivable
Abstract: Accounts receivable financing is a business running, is to expand sales and increase corporate profits and the investments. In this paper, the main causes of accounts receivable, accounts receivable management for enterprise problems existing in the corresponding management strategies. Keywords: accounts receivable; management; Strategy accounts receivable refers to the business from selling goods, products or services to business, should purchase units or units of services received money collected. Enterprise from selling goods, products, services, and other business activities, a claim form. The main reason is the formation of such claims credit. Analysis from the enterprises themselves, the major credit two motives: First, expand sales and increase profits; second is to reduce inventory and reduce costs. Under the conditions of the socialist market economy, enterprises for their own needs or objective reasons, the approach often taken credit products, foreign sales to provide services. Therefore, the accounts receivable place, designed to enhance the competitiveness of enterprises, improve the product market share, expand product sales and profits are achieved, is the company an important part of marketing strategy. However, the amount of accounts receivable business too much, can not recover in time, will affect the normal production and business activities, or even result in corporate bankruptcy. In recent years, China's enterprises from the overall situation, although the accounts receivable decreased year by year, but because of the market economy has contracted, hard to recover accounts receivable, the amount is still relatively large. Therefore, to enhance the management of accounts receivable would have a great significance. First, it is the normal operation of production and operation an important guarantee. Credit growth depends on the settlement, but also on the accounts receivable management, enterprise if deregulation, blindly one-sided pursuit of sales, the money will form a vicious cycle that affects the normal reproduction activities. Second, it is an important way to improve the economic efficiency of enterprises. The strengthened management, accounts receivable to recover in time, companies need a large number of loans due to lack of funds, thereby reducing interest payments and improve the economic efficiency of enterprises. Current market economy, how do we strengthen the accounts receivable management? I think mainly from the following aspects. First, strengthen corporate credit policy management effect on credit quality accounts receivable, dependence and corporate credit policy. The survey shows that credit risk is not real customers within the enterprise. Only to develop a set of reasonable credit policy in order to prevent bad debt in the first place. Credit policies include three aspects: credit standards, credit terms, collection policies. (A) Credit standards. Credit standards means that the customer access to business credit transactions should have the condition. If customers fail to credit standards, they can not enjoy the company of the credit or the credit can only enjoy lower benefits. Business valuation is the customer level, the decision whether to grant or deny the basis for customer credit, corporate credit standards in the development or selection should take into account three basic factors: (1) industry competitors. In the competitive market, companies should first consider how the competition and maintain a dominant position in, maintain and expand market share, if the opponent is very strong, relative to competitors, companies must take the credit for the low standards; contrary , stringent credit standards for the appropriate. (2) their own ability to bear the risk of customer default. When the enterprise has a strong anti-risk ability to connect to a lower credit standards to improve competitiveness for customers to expand credit; the contrary, higher standards should be chosen to reduce the risk of default. (3) The customer's credit level. Customer credit rating companies must make judgments and decisions are not offers to customers. Depends on the level of customer credit levels of five factors: quality, capacity, capital, collateral, conditions, referred to as the 5C system. a. quality. Repudiation refers to the possibility of performance or customer. Whether the credit given to customers to solve the primary factor. Mainly through customer payment performance record of the past to understand. b. capacity. Refers to the level of customer solvency. Depends on the assets, especially the quantity and quality of current assets to current liabilities ratio of their relationship. More than the number of current assets, current ratio larger, indicating that the material guarantee debt more strong; the other hand, poor solvency. Liquidity, asset quality, liquidity is strong, strong solvency; the contrary, poor solvency. c. capital. Refers to the customer's economic strength and financial position of the pros and cons. Is the ultimate guarantee of customer debt. d. mortgage. Means the customer refuse to pay money or be unable to pay sums of assets used as collateral. This is controversial I do not know exact details or credit to customers is particularly important. Once these customers have not received the money, then the collateral offset. If these customers to provide adequate security, we can consider providing them with appropriate credit. e. conditions. That may affect the customer's economic solvency. When customers are faced with adverse economic environment, business-to-customer business credit standards should be determined cautious. (B) credit terms. Once the company decided to offer credit to customers when the need to consider the specific credit terms. Credit refers to the clients condition is made when the credit requirements of the order, including credit terms, discount terms and cash discounts. (1) Credit period. Is to allow customers to pay for the goods from the time of purchase to qualify. Typically, the extension of credit terms, to a certain extent, expansion of sales, thus increasing sales margins. But the undue extension of credit period, the proceeds are sometimes offset the cost of growth, or even result in decrease in profit to the enterprise adverse consequences. Therefore, enterprises must carefully study to determine the appropriate credit period. (2) discount period. Refers customers to enjoy the cash discount payment terms. The deadline to determine whether the loss of principal, as the discount period is less than bank loan interest may be. (3) cash discount. Enterprise customers in the price of the deduction made. Deciding whether to provide and how much cash offer discounts, depending on the cash discount cash discount income is greater than the cost. (C) the collection policy. Business if we adopt the policy of active debt collection, accounts receivable may reduce investment, reduce bad debt losses, but will increase the debt collection costs. If a more negative billing policies, collection costs can be reduced, but increased investment in accounts receivable, increased bad debt losses, so that the economic environment requires enterprises based on market conditions and their own science to design recovery strategies. In addition to the use of corporate cash discount timely and appropriate use of the guarantee system, we must also determine a reasonable method of billing procedures and debt collection. General first notified to the customer a polite letter of Han, and further collection by telephone, such as re-invalid, the billing company directly with clients in person staff, if customers do experience temporary difficulties proved, through the efforts can make a comeback, business should help clients survive, to recover more receivables. Although the ability to pay if the customer is trying to default, it is necessary to take legal action brought to arbitration or litigation and other relevant departments to protect business interests. Second, careful selection of settlement. Fully investigated in the creditworthiness of customers, the next will have to select the appropriate method of settlement, it is decided whether the safe and timely recovery of the amount of the main factors. Method of settlement companies usually have a check, bank draft, commission collection, collection commitments, commercial acceptance bills, bank acceptances. The strong profitability, good customer creditworthiness, businesses may be appropriate to relax the policy, to take commission collection,abercrombie pas cher, collection and other settlement obligations; and the profitability of the weak, the poor creditworthiness of customers, companies should choose check or bank acceptance. Must not only to simply increase sales, try to accommodate the customer's unreasonable demands. For different customers to take a different method of settlement in order to effectively reduce the risks of accounts receivable. Third, the management of specific accounts receivable present, most enterprises accounts receivable from the sales department or sales staff, their own management. But the existence of regulatory loopholes to do so, lack the necessary control elements, the behavior of sales personnel who should supervise it? Therefore, only the sales department to manage their own inappropriate. One view is that the accountants to manage the enterprise. Accountant accounting treatment even more clearly on, but do not know the specific customer situations, a simple return to management by the accounting staff are not appropriate. Fact, accounts receivable management, is a modern enterprise management an important part of enterprise credit management throughout the core. Thus, the internal organization of the enterprise management should have a special study of marketing strategy, research organizations to manage customer credit accounts receivable, to establish the characteristics suited to their own credit management system. Fourth, the establishment of practical reconciliation system reconciliation work in progress, the enterprise should be based on business size and the amount of time on the accounts receivable on a regular basis check signed by both parties as a basis for an effective reconciliation; the event of errors should be a timely manner. Reconciliation of accounts receivable includes two aspects: (1) The reconciliation of general ledger and subsidiary ledger; (2) a breakdown of current account with the customer's checking unit. Will appear in the actual work of the unit and a breakdown of the balance of the balance between customer units not on the phenomenon. This is mainly due to reconciliation of work out of line. Sales are often just the product sold, regardless of whether the money can be recovered, that the collection is the financial sector. But now many companies are large because the accounts receivable, there are many units involved, in addition to usual accounting finance staff, prepared statement, etc., already very busy, and did not have time and energy to reconciliation with the customer, and the general claims reconciliation work units are active implementation. Thus, reconciliation of accounts receivable of enterprises to a standstill, making the excuse that current account customers do not know refused to pay or delay payment to the enterprise losses. Therefore, reconciliation of accounts receivable from sales of the first since the sales should be reconciled regularly with clients, and receiving timely feedback to the financial sector. Marketers can manage the units according to product issue, invoice and payment to be withdrawn from circulation when the registration procedures, and regularly reconciled with the client, confirmed by the other side, so as to receive clearance in time to lay the foundation accounts receivable. As business operators, sales and credit growth should be the seller's performance with the combination of study, not only to make them aware of products sold, but recovered in time to make money and minimize losses. Fifth, to enhance the level of risk of accounts receivable accounts receivable after , enterprises should take various measures to strive for timely recovery of payments. Has not been recovered on, should be prepared to risk analysis of accounts receivable, if necessary, to take certain measures to reduce the risk of accounts receivable. Here I borrow the ABC classification of inventory management in the management method of classification of accounts receivable. 1, according to the causes of accounts receivable are classified. A class of customers is based on the payment period in the credit from the business acquired as a free or low-interest loans, this type of customers tend to find ways to extend the payment time, which largely increased the business accounts receivable costs. This article is divided into A such accounts receivable category. To focus management. Another customer is a temporary cash flow problems due to funding to asset-backed credit guarantee products or accounts receivable generated. The two sides signed the purchase and sale contract, mortgage or guarantee with a legal guarantee, the date when the payment comes to payment under the contract or sale of collateral to recover accounts receivable, security is better, can be classified as B class management. There is also a class of customers to sell products and receivables due to time differences and form of accounts receivable. Such accounts receivable are due to time difference, not a commercial credit, nor is the main content of accounts receivable, in general, these customers receive the goods soon after payment, security, well, can be classified as C class, not to focus on its management. 2, according to the accounts receivable aging analysis. In general, the longer the aging accounts receivable, less likely to recover, and the possibility of occurrence of bad debts is greater. Enterprises can be based on past experience the longest aging, division of accounts receivable at the greatest risk category A, while the aging shortest, least risky receivables designated as C class, the rest were classified as B class. 3, according to the proportion of accounts receivable analysis. Will be a larger proportion of accounts receivable classified as A class of customers, smaller customers are divided into C, the rest of the B class. Can see from the above categories, both from the perspective of risk, aging perspective, or the proportion of the angle, A class of small accounts receivable security, risk, management should put more effort into the A class of business receivables section on the detailed analysis of their delineate reasonable collection policy as soon as possible recovery. Also can not relax on the B, C, accounts receivable management, as short as possible turnover of accounts receivable and accelerate cash flow. VI established system of accounts receivable for bad debts matter how enterprises to adopt a strict credit policy, as long as there is a commercial credit behavior, the incidence of bad debts is always inevitable. Therefore, enterprises should follow the principle of stability, the possibility of bad debt losses are estimated in advance, and actively build the system for bad debts, to promote the healthy development of enterprises. In short, companies must look squarely at the face, to enhance the debts, reduce accounts receivable losses, accelerate the flow of corporate funds, which entered the socialist market economy on track. References: [1] China Certified Public Accountants. Financial cost management [M]. Beijing: Economic Science Press, 2005. [2] Wen-Feng Zhang. Receivables recovery strategies [J ]. Accounting Communications, 2005, (1) [3] Xie Hongyu. receivables management under the market economy, 2006. |
|
