Research On Accounts Receivable Management Based On Credit Control Of Enterprise

Along with the development of the market economy system,enterprises are facing the increasing of the growing competition. To expand sales, reduce inventory and maintain good relationship with customers,the credit has become an important part of competition. With the expansion of credit sales, the Account Receivable caused by credit also increased. Credit sales will have opportunity cost, accounts receivable management costs, loss on bad debts and brings operating risk of the enterprises. In the developed countries, enterprise credit management as academic discipline has existed for more than one hundred years ago. Western countries have formed a more mature theories and practical experience in the accounts receivable credit policies, methods of risk management and credit process management. But the study on credit account receivable management starts relatively late in China. The legal support of the credit-system is not perfected, and many enterprises are lack of consciousness of prevention in account receivable management. Credit risks grouse with each passing day which restrict normal marketing activities of enterprises. Therefore, to strengthen the management of accounts receivable has become an important enterprise liquid assets management content.The whole picture is major rounding for a Company E in elevator industry, discuss for how to improve cash flow & economic benefits, reduce business risk by controlling the credit risk. First of all, it is introduction of the fundamental theory of the accounts receivable management, which based on the existing research results at home and abroad. Secondly, based on the analysis of AR data and history case of Company E. Raises the issues and reasons of the AR Management in business process. Thirdly, a specific solution was given in this article according to the practice in Company E, and the management of credit control can be divided into advance control, intermediate control and afterwards control. The main content of the proposal include as following aspect: 1, Optimizing the credit control policy, strengthening contract management, especially in the process of signing the contract, make full use of the laws and regulations to eliminate, relaxed, and transfer on management risk. 2, in terms of internal assessment and incentives, consummate performance evaluation incentive system, Clear responsibilities for AR collection, and make a incentive policy to get long over dues. 3, establishing the collection process flow and principle, holding regular collection meeting about accounts receivable, and it is rigorous control to every activities in collection process.From analysis by Company E, find out common credit issues for almost elevator enterprise, in this paper measures of control have been discussed,hope it will be advanced for other businesses’ kind reference.