The Research On Accounts Receivable Management Of OEM Garment Enterprises

Textile and clothing industry as a labor-intensive industry is faced with increasingly fiercer competition due to the increase in the prices of raw materials,labor costs and the amount of market players.The buyers are in the favorable position and the sellers try every possible way to grab market shares.With the fast growth of credit economy,the traditional transaction mode is changing towards the credit transaction mode.Credit sales based on commercial credit,while becoming a demand and a trend,has potential risks.Credit sales help win orders but bring about problems with accounts receivable.Poor accounts receivable management will result in risks.With OEM garment enterprises as research object,this paper,by analyzing features of the clothing industry and related cases and data,this paper summarizes the status quo and problems with receivables in OEM garment enterprises.The paper further analyzes how potential risks with receivables influence financial management and operation management and explores the causes in social environment and enterprises themselves.Conclusion drawn from the previous studies says "accounts receivable management shall begin with client selection and contract signing instead of product sales",which lays theoretical and practice foundation for receivables management.Guided by the whole-process management theory,this paper comes up with measures in three aspects for receivables management,namely enhancing internal credit management department,buying insurance on domestic trade credit and optimizing ERP information system,the core philosophy of which is "prevention first,supplemented by recovery" and "comprehensive prevention and effective reduction of losses".In addition,the paper combines the business flow of OEM clothing industry with measures on receivables management,highlighting the thinking that "effective financial management relies on the full familiarity with businesses".The internal credit management department enhances risk prevention awareness of OEM garment enterprises and collaboration among departments.Domestic trade credit insurance guarantees the safety of receivables and serves as reference for standardized enterprise management.ERP information system integrates internal and external measures,improves the efficiency of various departments,and makes enterprises more sensitive and responsive to risks of receivables.Improper use of credit sales causes delays in receivables and bad debts.As a player in the manufacturing industry,OEM garment enterprises heavily rely on efficient capital turnover.for survival and development.Enterprises are expected to take preventive measures when credit sales are prevailing.Therefore,management of receivables not only guides reasonable credit sales to prevent risks with receivables from happening but also does good to the construction of social credit system.By referring to the work of the author,this paper proposes suggestions on receivables of OEM garment enterprises for reference.