Research On The Optimization Of Accounts Receivable Management Of BYD Company

The degree of competition and the state of development within each industry vary,thus leading to disparities in accounts receivable management practices.The rapid growth of the market economy has propelled China’s automobile industry to new heights,with a rapidly expanding market and a thriving pace of development.However,the competitiveness of most enterprises within the industry remains insufficient,characterized by a prevalence of homogeneous products,leading to intense competition among industry players.As a publicly-listed company,BYD has sought to expand its market and improve its competitiveness.However,in light of the industry’s competitive landscape and the increasing reliance on credit sales,BYD has faced growing challenges with regard to its accounts receivable management.This is due to a number of factors,including the inadequacies of the credit management system,the flawed design of internal controls,and a lack of awareness of risk management,which have resulted in the gradual increase in accounts receivable and a rising risk of bad debt loss.In this study,historical data of BYD’s accounts receivable management over the past 7 years was collected and analyzed,incorporating principles of working capital and credit management.The purpose and techniques of accounts receivable management were also discussed.Through quantitative research and other relevant methods,the risks and shortcomings in BYD’s accounts receivable management were identified,including deficiencies in the credit management system,internal control system,and risk control awareness.The problems and root causes of these issues were then thoroughly analyzed through further refinement and research.Building upon relevant management theory,an optimized credit management system was proposed,incorporating recommendations for improvements in credit internal control management,credit evaluation system,dynamic supervision mechanism,collection management mechanism,and other areas.Additionally,new models such as receivables factoring and mutual transfer of debt and equity are being explored to enhance the efficiency and rationality of accounts receivable management.The results of the study on the improvement of credit management at BYD have led to the development of a practical and effective credit management system.This system encompasses comprehensive control of credit customers,targeted evaluation and understanding of customers at various levels,avoiding blind credit sales,determining credit amounts and repayment periods in accordance with credit ratings,and ensuring the proper execution of credit contracts.Implementing this system can reduce the risk of bad debts and promote efficient capital utilization.Additionally,a credit control program,tailored to the specific needs of BYD,has been established to provide guidance on credit control before,during,and after the sales process.This will improve the quality of credit management,mitigate credit control risks,and facilitate the healthy and sustainable development of the company through the acceleration of capital turnover and support for R&D and M&A expansion.