A Study On Improve Quality Of Account Receivable By Credit Governance

In the competitive market, in order to further expand the market to maintain products’ competitiveness, to offerfavorable credit is one of the quick and easy way. However, at the same time along with the credit sales is the credit risk. At present, most of Chinese enterprise has no awareness of credit risk management, while Credit management system is imperfect causes high bad debts loss. Therefore, a sound credit management mechanism, improved credit management process, and constantly enhanced credit risk prevention management, is to promote continuous comprehensive sustainable development requirements, which also is the most important task of the company to survive and develop.This paper is to study Credit management procedure of P company, a Chinese subsidiary of a U.S. listed company whose accounts receivable management was so weak and lack of credit management guideline that restricted sales scale. From studying the external and internal environment of the company, using SWOT and other analysis method as tool to find out the root caused of the problem. Then seek solution by diagnosing, designing credit management system and workflow. From the case studies, sound credit management system and blameless working processes could directly affect the quality of the receivables and enhance product’s market competitiveness. It’s meaningful to have a study on Account receivable and credit sales management from the credit management perspective.