Discussion On Internal Control On Account Receivable Of GF Company

The production of corporate credit sales and accounts receivable is a necessary requirement of the development of market economy.The holding scale and holding time of accounts receivable are of great significance to the continuous operation and development of the enterprise.Most enterprises try their best to seize the market share and expand their own sales,relax their own credit policies and win as much customer share as possible in the hope of winning an invincible position in the increasingly fierce market competition.However,the loose credit policy and the large amount of credit brought about the rapid growth of the scale of accounts receivable,which in turn led to the rise of corporate accounts receivable management costs and the increase of bad debt losses,as well as the rise of the opportunity cost,which further eroded the enterprise profits,increased business risk.Although there is an external social credit environment of the formation to bad debts of accounts receivable,there are many reasons for their own business,many small and medium-sized enterprise accounts receivable internal control system is exist in name only,corporate finance and sales departments in practice is not strictly observed the company regulations,resulting in the company’s internal control out of control.Therefore,how to monitor the accounts receivable in advance,in business and afterwards is the focus of the research on the internal control of accounts receivable.Enterprises should strengthen the management of accounts receivable,improve the internal control of accounts receivable,credit risk brought by accounts receivable reduced to an acceptable level of controllable enterprises.The case selected Tianjin GF Door & Window Co.,Ltd.(hereinafter referred to as GF Company),which is a privately owned enterprise that integrates the research,development and manufacture the traditional doors and windows and smart doors and windows.It is affected by the long installation period and the seasonality of production and operation.The collection of payment is slow.After the Company applied for listing of the National Equities Exchange and Quotations in December 2015,the Company vigorously promoted its business expansion strategy.Meanwhile,in order to seize the opportunities in the smart window market and extensively use the credit sales model,the sales volume of the enterprise products also led to the increase of the size of accounts receivable.Accounts receivable backlog a lot of money,and in order to expand production the company only can rely on bank borrowings,asset-liability ratio also will rise,the long run will certainly affect the safety of the capital chain.Therefore,how to speed up the company accounts receivable back and strengthen the control of receivables is an urgent problems.Firstly,the article reviews the objectives and effectiveness of internal control and the theoretical research on the internal control of accounts receivable;then it elaborates the basic concepts and the reasons for the formation of the risk of accounts receivable and the objectives and characteristics of the internal control of accounts receivable.Secondly,combining theory with practice,we choose GF Company as a case,and introduce the status of its accounts receivable management and its impact on the company’s operating conditions.We analyze the five aspects of the internal environment,risk assessment,control activities,information and communication and internal supervision The status quo of the internal control of the company’s accounts receivable,and also pointed out the company’s problems before the internal control,during and after the accounts receivable,and we analyze the reasons for the existence of the problems,find out the crux of the problem lies in internal control.Finally,some suggestions on improving the internal control of the company’s accounts receivable are put forward.To a certain extent,this study not only explores the key control points of GF Company’s accounts receivable,but also puts forward specific rectification measures for the existing practical problems.It is believed that the research in this article is of great significance to the Company’s standardization of internal control,in addition,there are some similar problems exist in the small company,and it may will have some reference value.