Sales Contract Risk Management Research On Medium And Small-size Manufacturing Enterprise

In the global integration and the increasing maturity of market economy, the contract as the main tool of enterprise economic activity, plays more and more important roles in the enterprise management. In recent several years, more and more medium and small-size foreign manufacturing enterprises are facing with difficulties in China, with increasing labor cost and less funding support from local banks. Especially in the year of 2015 when China economy was facing in tough hurdles, those enterprises have to take much bigger challenge to survive in the economy crisis. The enterprise need to enlarge marketing share and take more orders from the client, ignoring the high risk in some sales contracts. This brings a large quantity of risk factors for the enterprise operation, even cause dramatic damage for the enterprise finance.The paper took EM Company for example, to discuss contract risk management and risk control process. By analyzing the current situation and status of contract risk management in EM company, we could summarize all the main problems and root cause. We propose a risk management team for EM group internally. Moreover, the contract risk management process need be modified and systematic, followed with stronger contract review rules and risk list to monitor risks in sales contract. At the same time, through building risk culture by legal knowledge training and contract information system, we expect EM sales contract management situation can be improved. Finally, other enterprises with similar situation of EM Company can make reference for sales contract risk management, based on this paper.