Study Of Receivables Management In Architectural Decoration Companies

Recently,China' economy has developed with a sudden increase of speed and power.The living standard of residents has been improved dramatically as well as the customer's attitude has changed greatly.The residents' attitude towards buildings began to change from the satisfaction of survival needs to the desirability of comfortable and beautiful living environment.As a result,the increase demand of construction decoration business facilitated the development of construction industry rapidly and steadily.With the nation's new urbanization and the upgrading of residential consumption.The building decoration industry has shown vitality and great prospects for development.Architectural decoration industry has grown from a small branch of the construction industry to one of the three dominate industries of the construction industry during the past several years.As a capital-intensive industry,the building decoration industry requires sufficient funds for its rapid development.The company's financial strength determines the scale of the industry,because sufficient financial support is necessary for construction materials,the salary of workers and margin and quality assurance.However the rapid development causes a series of problems,which are mainly caused by the corporate accounts receivable dry cash flow.If the company fails to recover the project section in time in terms of the progress of the project.In order to ensure the progress of project,it is necessary for the construction enterprises to continue to afford the funds of construction in advance.The company's current assets will be large-scale squeezed,leading to deterioration of corporate capital flows and the disadvantage of operation of enterprises over time.And receivable accounts which occupy a large number of accounting books will also affect the quality of corporate profits.The characteristics that long cycle,large amount and difficult recovery of industry project weaken the capital flow capacity of enterprises and affect enterprises to undertake capacity for the sustained and healthy development of enterprises hinder.Thus,it is imperative to strengthen the management of accounts receivable in the building decoration industry.This thesis,by looking at the Shenzhen Zhongzhuang Construction Corporation Limited's various types of data,obtains the results of management of accounts receivable: the amount of accounts received increased year by year in the past three years;the annual growth rate is larger than the rate of the main business income;accounts receivable turnover days get longer;accounts receivable accounting for the proportion of total assets rise gradually,etc.In conclusion,the company's unreasonable scale of accounts receivable will impair the company's development and the object of operation.Moreover,The thesis,based on the structure of corporate and management process,develops an in-depth analysis of the issue of accounts receivable management.The problems have been discovered that lack of symmetry in financial information system,lack of credit management,lack of project control,the weak recourse in the state of receivability and the insufficient utilization of the creditor's rights of accounts receivable.Therefore,this thesis puts forward the recommendations of the management of the receivables of the company,which is,the combination of centralization and decentralization which means a certain right will be distributed to the division or project team to improve the work enthusiasm of division and the project team members,leading to improve the ability to solve problems.As a result,the issue of accounts receivable will be solved effectively and timely.Improving the company's credit system and establishing an independent credit management departments and credit policy.Under the background of effective management of construction unit,the company realizes the improvement of accounts receivable.Moreover,the refinement of large and medium-sized projects management model in company and planning analysis and dynamic regulation of these projects will help to reduce the risk of such large projects effectively.After receiving the accounts receivable,company should control of aging and overdue double analysis and strengthen overdue collection and performance appraisal and improve the efficiency of accounts receivable recovery.Finally,company needs to take the mitigation of the company's capital demand pressure and financial pressure into considerations,and put forward to promote the recommendations of the development of accounts receivable factoring business and analysis the feasibility of changing the construction company's traditional management model.