The Research On The Management Of Trade Receivable Of A Company

In our country, traditional manufacturing companies can't develop without the leading technology, higher quality and lower price. However, if the company want to keep its steady market share, they should make full use of credit sales policy, this can help the company to speed up their trade receivable recovery. In this way, their working capital which is used to maintain their operating activities can be guaranteed. The cooling tower industry is a member of the traditional machinery manufacturing company. It is difficult for them to make material technology development because of the maturity of the industry, the competition in this industry focuses on prices. A company is a cooling tower company which provides design?research and development?manufacture?install and after sales service. Although A company's client is stable, its competitors' powerful bargaining power of price make A company to widen their credit sales policies to maintain their market share. This results in the increase of the scale of A company's trade receivable. The larger of the scale of trade receivable, the higher the risk of A company's bad debt. The longer the trade receivable aging, the lower the use of company's capital. How to make full use of credit sales policy to speed up the trade receivable recovery is a big problem faced by A company.This article describes A company's industry situation firstly, A company's trade receivable management situation, sales and receivable internal control situation and credit management situation are then introduced. These situation description helps to find the problems of A faced. In order to find the reasons among these problems, we analyze the external uncontrolled reasons faced by A company first, we then analyze the internal reasons such as trade receivable management problems, sales and trade receivable process problems and credit sale management problems. After analyze the reasons, we provide some solutions to help A company to solve trade receivable management problems.After the research, we think that in order to solve the problems A company faced, we should set up the credit management department firstly to collect the clients' information. This will help the company to evaluate the clients and give credit to different customers. Rebuilding A company's sale and receivable internal control system is then need to be considered. Last but not least, building of the new performance appraisal system and completing A company's trade receivable returning mechanism is another way to lower the risk of bad debt.