Case Study On Internal Control Of Sales And Receivables In XH Pharmaceutical Industry

Pharmaceutical enterprises is a special economic economy in the market economy.It is not only the producers and sellers of products,but also an important commitment to social responsibility.At the same time,drugs is a special product as the complexity of the types,the strict quality requirement,the limited shelf life and the special distribution channel.So the internal control of Pharmaceutical enterprises is key to the quality of the product.In particularly,due to the subsequent flow of drugs related issues,the sales business of pharmaceutical companies should be controlled strictly.As a leading enterprise in China's pharmaceutical industry,XH has developed a comparatively suitable and complete control system after decades of rapid development.However,with the increasing of sales and the growing of the scale,some problems has arisen in internal control system and has caused bad impact.Problems exist in the sales and receivables lead to extra credit and multi-credit and result in bad debt.So,it has practical significance to strengthen the internal control of sales and receivables and analyze its existing problems and make recommendations.Based on the analysis of internal control theory and then the case analysis of XH Pharmaceutical,this paper analyzes the current situation of XH Pharmaceutical's internal control from five aspects: control environment,risk assessment,control activity,information and communication and supervision.At the same time,through the analysis of XH pharmaceutical' internal control,many problems has been found in the sales and receivables business: imperfect internal control of the customer's credit system,weak control of receivables and bad management of customers,imperfect organizational structure and the information communication system is not perfect.According to the above problems,the following countermeasures are put forward: perfect the governance structure,carry on the risk identification and response to the internal control of the sales advance collection business,strengthen the control of the goods such as delivery,invoicing and collection,accounts receivable recovery,customer credit evaluation Marketing information sharing platform,establish a sound internal control system.The innovation of this paper is mainly reflected in the selection and analysis of the case.Although the current academic community for pharmaceutical companies' internal control has been relatively sound,but research for the sales and receivables of pharmaceutical companies is lake.Many paper of the pharmaceutical industry is based on the external regulatory and industry norms,less focus on the internal operations processes.Among the research of pharmaceutical company's internal control of process,most of them focus on the research process,product process and the management of inventory.This paper is based on the particular points of sales and receivables activities in pharmaceutical companies and focus on the problems exists in the activities to reveal the defect in the internal control of XH' sales and receivables business.And puts forward some suggestions on the improvement of internal control of sales and receivables in XHs.Which is beneficial to XH to better manage and supervise the sales and receivables cycle,and also have some reference for other enterprises in the pharmaceutical industry.