The Credit Risk Management Of Enterprises Based On Receivable Accounts

The nature of the market economy is the credit economy, and credit sales has become the most effective solution to attract customers, expand sales. This credit-based approach has become a major form of intercompany transactions to replace cash settlement. More and more companies found that profits amount on the income statement is very impressive, but in fact their disposable cash flow is meager. Corporate earnings can not be converted to cash flow and can not been taken full advantage, which leads to reduce the investment opportunities, limit the long-term development, and even shake the survival of the enterprise. This leads to many problems, such as the accounts receivable management issues of the Chinese enterprises--- receivables management responsibilities are not implemented, the sales department assessment exists bias, the financial sector is difficult to control credit sales and receivables, etc. In addition, it also reflects the company’s higher-level questions--- the lack of the entire enterprise credit system, credit department functions and other settings. Credit brings increasing sales and more revenue to enterprises, but it also brings credit costs, such as administrative costs, receivable accounts costs, bad debt costs, opportunity costs, shortage costs and credit risk. Therefore, enterprises should moderate credit, balance the right benefits and risks of credit, maximize profits in the case of that the credit risk is under control.For enterprises, credit risk management is a complex systems engineering, which needs business and marketing departments to work together to control credit risk. In addition, enterprises not only find out the credit risk assessment methodology for their own, but also establish an effective credit risk management system.In this paper, we will be based on the corporate credit management researchs of domestic and foreign scholars, combining with BR company’s operational and financial information. Additionally, we analysed the causes of credit risk based on the two aspects of organizational structure and credit management process, then put forward corresponding recommendations. Finally,we investigate the management system construction of corporate credit risk, hoping to do a guidance for Chinese enterprises credit risk management.