A Research On Accounts Receivable Issues Of ZL Company

With the development of market economy, sell on credit is widely used in many industries, and the credit sale has become an indispensable business strategy for promotion. Compared with the traditional way of cash sales, credit sales have many advantages in stimulating purchasing, enhancing market competitiveness and expanding market shares, but it also results in increasement of accounts receivable. At present, our credit system is not perfect, many enterprises put too much emphasis on the importance of market share, but neglect the management of accounts receivable risk, which increase the accounts receivable. According to the survey by a professional organizations, the receivables credit resulted by the credit sales only accounts for 10% of total accounts receivable in enterprises in developed countries, while the ratio is up to 60% in our companies. A large number of accounts receivable cannot be recovered, which will lead to decline in corporate profits, tight liquidity, even bankruptcy for companies. The problem of accounts receivable has become a trouble for the development of Chinese enterprises.The industry of construction machinery manufacturing whose demand of product depend on the real estate industry, coal mining, and infrastructure construction is a typical industry faced with the serious accounts receivable problem. In good economic times, many companies will rapidly expand the production, while after the financial crisis, the industry is confronted with sharp contraction in demand, thus many companies have adopted an aggressive credit marketing tactics. On the other hand, the contraction bank credit and the decline in engineering also lead to difficulties in customer capital turnover, which also increases the risk of accounts receivable. This paper selects ZL as the object of study, we analyze the status of its accounts receivable, the existence of problems and causes, and make some suggestions for improvements.Firstly, the paper analyzes the scale, the growth, the aging structure of accounts receivable. Secondly, analyze the reasons for the problem of accounts receivable, which shows that the economic environment, customer factors, the way of credit sales, and the management of accounts receivable are the main reasons. Finally, combining the theory of whole process management with the facts of ZL, we make follows suggestions:In advance, we need to investigate customers'assets and credit, and make credit ranking; in the matter, we should make more strict credit approval and develop the ability of dynamic tracking for accounts receivable, and intensify the management of contracts and after-sale service; after the event, we should reinforce the recovery of overdue receivable and make factoring for it and improve the performance appraisal indicators, and the issue of payment should be included the evaluation system.