TG Company Credit Sales Policy Analysis And Advice

In the background of economic integration and market globalization,the oversupply market has converted from seller's market to buyer's market,and competition in the market is becoming increasingly fierce.Sale on credit become a new normal in enterprises.Sale on credit promotes sales,expands market share,enhances the competitiveness of enterprises on one hand,and affects the use of current fund,increases the complexity of management and operation risk on the other hand.Then,it is necessary that enterprises have higher level of management skills,which is reflected by sale on credit policy making and implementation.So,it has very practical meaning to analyze sale on credit policy,find problems of the policy currently in use in the enterprise and give some reasonable suggestions.This paper studies a private enterprise named TG,which is a low electrical voltage apparatus manufacturer and seller.We will find the main problem of the sale on credit policy of this enterprise,and give some qualitative improvement suggestion and quantitative solution,basing on essays about sale on credit policy,on site survey,documents,and depth interview of sale on credit policies in recent years of this enterprise.This paper has five parts.Part one,it points out the problem.It explains the background,meaning,content and study methods of this paper.Part two,literature review.Sale on credit policy factors and theory is summarized and refined basing on the literature researching and meditation.Sale on credit policy factors like credit and sale on credit,customer credit evaluation,customer credit line,credit period,account receivable management method,bad debts confirmation and disposal rules are summed up;quantitative measuring ways like credit risk evaluation,credit line calculation,and credit rating are paid special attention.Part three,a frame of sale on credit policy analysis is outlined.Then the sales channel,customer types,sales policies of the latest three years are all summed up basing on the outline.Customer credit rating and management methods,the credit types for different sales channels,credit line calculation methods,account receivable management methods,and bad debts confirmation and disposal rules are refined,and finally the aspects that should be improved are proposed.Part 4,corrective actions for enterprise credit management organization instruction,customer credit evaluation and management methods,credit risk management system are listed basing on the problems we've found before.And a quantitative solution is proposed for quantitative parameters essential in credit policy decision(credit line and credit period),an Excel simulation model based on cash flow and budget.Part 5,a summary of the paper.It points out the further study direction of this paper basing on the development strategy of TG.This paper is based on realistic problem,and the conclusion of the study could be used for reference for enterprises which have the same problem of sale on credit policy.