Research On Credit Sales Risks Issues Of ZP Company

Credit sales generated in the market economy, and also largely contributed to the development of market economy. Currently, credit sales penetrate into various industries, and become the effective tool to increase sales and reduce inventory, which is widely used by sellers, especially by heavy machinery industry sales with high values and amounts of products. However, Credit sales have potential risks while promoting the business.This article bases on the credit sales of engineering crane industry, introduces its characteristic, and choose one crane agent-ZP Company as the example, analyze its credit sales and risks. There are many problems in ZP Company such as excessive use of credit sales, high quantity accounts receivable and unreasonable Aging arrangement. Correspondingly, many reasons lead to this result, including deterioration of the external environment, imperfect internal control and the absence of risk assessment mechanism and so on, which have improved the risk of corporate credit sales from different degrees. Therefore, it is very urgent to correct credit sales chaos and avoid the risk of credit sales. The article proposes suggestions from improving the external environment and Strengthen internal controls two aspects on the basis of in-depth analysis for the risk causes. One hand, the government should regulate market competition and enhance the credit system. On the other hand, the company shall do best to investigate and assess before credit sales.at the same time, it is necessary to set bottom line of risk control, establish a reasonable proportion of the different sale approach and reinforce the clearance of accounts receivable. Moreover, enterprise should have long-term perspective for development. The fundamental way to make achievements in the crowd market is to improve competitiveness itself.