Research On Commercial Credit Of The Oversea Investment Retailing

Financing difficulty is always the bottleneck of company development. Domestic Bank-dominated financial system largely limits the financing channels for companies. Trade credit financing as a major alternative to bank credit, its advantages are widely recognized. China is a developing country in the process of the economic transformation, financial repression and credit discrimination exit in the business process seriously compare to American and European countries. Trade credit financing is an effective way to complement and displace the bank credit financing in order to avoid bank credit constraints and credit ratio. It is not only a strong support of modern commodity economy, but also the company’s most popular informal financing channel. With the development of economic globalization and the deepening of opening-up policy of China, the number of foreign retain business has increased gradually. International retail giants come into domestic marketing one by another, which brought the advanced business concept and diversified business forms into China. They not only accelerated the survival of fitness, but also promoted the development of Chinese retail business. Since the breaking out of the finical crisis in2008, central banks of every country continued to raise the deposit reserve ratio and got back funds in the market, which led to a shortage of capital flows in capital markets and slowed GDP growth. In order to promote the development of economy, every government has increased government investment gradually and put forward a series of measures to stimulate consumption. With its unique position at industry chain, retain business can serve as the bridge between the manufacturing business and consumers. If exploited properly, retail business will drive the revival of manufacturing industry and won the win-win situation. Therefore, large retail businesses occupy the leading position of industry chain of various industries, controlling marketing, deciding the production and influencing the consumption to some extent. They increasingly play a critical role in leading production and consumption. Under the influence of macro-economic, using trade credit to acquire short-term financing for upstream and downstream enterprises and their own is imperative in the retail supply chain. However, both the domestic research and foreign research on account payable have focused on the aspects of strengthening the management and reducing the risk. As an important part of retail business, how to effectively manage the account payable, accelerate the cash flow and improve the usage of cash have been relatively neglected by the researchers.This paper selects Carrefour as study object of foreign retail business trade credit financing and finds sticking point of commercial credit financing problem through researching three modules of commercial credit:accounts payable, notes payable and advances from customers. While combined external bank capital settlement module and financial derivatives, it proposes foreign retail optimization plan of trade credit financing. Trade credit financing optimization program is divided into two main chains. Outside, establishing a pattern of financial Sharing Center (SSC) as based platform; conducting virtual settlement of commodity flow, invoice flow and capital flow through vendor settlement website (FWS); signing package deal financing contract of unexpired supplier receivables with banks. The upstream suppliers achieve payment first time recovery according to their requirement through the supply chain financing platform of cooperative banks; shorten the accounts receivable turnover days. At the same time, the retailer shares the right to use the corresponding short-term financing income with the bank through financing supply chain platform to realize financial management innovation model. Inside, with the help of bank financing cash pool platform, group and the bank agreed the spending limit for each sub-account of the cash pool according to the principles of revenue and expenditure. Trade credit financing attributed the funds sedimentation which generated from the sale and use of single-purpose prepaid cards and account payable short-term funds to one pool, using the net cash management method, and legalized the borrowing of funds based on entrusted loan manner. Base on above trade credit financing optimization, this paper tries to provide inspiration for Carrefour and other retail businesses, especially use of trade credit financing under the group operation model.The article is composed of six chapters. The introduction chapter includes the background and significance, key concept definition, research method and innovation. The second chapter is the literature of domestic and foreign theories. Through analysis of various trade credit theories and literature, indicates the necessity of trade credit financing. The third chapter is retail trade credit model and financing influence factors analysis, introduces the application and innovation of retail trade credit models based on characters of retail business. This chapter also analyzes relative factors about marketing environment and information development. The fourth chapter briefly introduces and analyzes the three main module of trade credit financing in various industries. The fifth chapter analyzes the trade credit financing focus on Sample Company. It conducted a comprehensive comparison of size, product, and competition aspects and describes the sticking point of Sample Company’s problem. The sixth chapter is the conclusion and the prospect.