Keywords: accounts receivable; Credit management; Collection program
Enterprises generally sell goods in cash and on credit. With the deepening of market economy, there will be more and more companies selling goods on credit. Accounts receivable will be formed by credit sales, and accounts receivable management is to analyze the conditions of credit sales, so that the profit increase brought by credit sales is greater than the cost increase brought by accounts receivable investment, and ultimately increase the cash income of enterprises and enhance the value of enterprises.
First, the function of accounts receivable
Accounts receivable have two main functions in production and operation:
1. Increase sales.
In the fierce market competition, providing credit sales can bring more orders to enterprises, thus effectively promoting sales. Because enterprises not only provide credit sales to customers who have goods, but also provide credit sales to customers who have funds to buy the goods in a certain period of time, customers will get more benefits from credit sales than cash sales. This is why selling on credit will bring more sales to enterprises.
Reduce inventory
When an enterprise holds a considerable amount of finished goods inventory, especially in the off-season, it will occupy a lot of funds accordingly, resulting in storage costs, management costs, property taxes and so on. , resulting in costs. Therefore, when an enterprise has a large amount of inventory, it will generally use preferential credit conditions to sell on credit and convert the inventory into accounts receivable, thus saving the corresponding expenses.
Second, the need for Chinese enterprises to strengthen the management of accounts receivable
1. Status of accounts receivable of enterprises in China
According to statistics, the proportion of accounts receivable in Chinese enterprises is extremely high, and many enterprises have exceeded the average level of 20% in developed countries. Due to the economic development in the transition period, the credit system is not perfect, the enterprise credit is seriously lacking, and the phenomenon of defaulting on payment for goods is common. Many enterprises are miserable and unsustainable, which has become an important reason for the low liquidity of Chinese enterprises. Moreover, most accounts receivable are overdue, accounting for more than 60%. In developed countries, the proportion is generally not higher than 10%, which is in sharp contrast with enterprises in China. 20 1 1 April, Guangdong Yiduoli was rejected by the CSRC. The first reason is that "during the reporting period, the balance of your company's accounts receivable continued to grow, accounting for a high proportion of total assets." According to the prospectus, the net accounts receivable of Guangdong Yiduoli in 2009-201kloc-0 were 376,543,479,537,000 and 45,963,200 respectively, accounting for 65,438+07.73%, 20.96% and 65,443,200 of the total assets at the end of each period. This case fully proves that Guangdong Yiduoli Company was rejected for IPO due to the high proportion of accounts receivable balance, which affected the company's further development.
2. The negative impact of accounts receivable
Everything should be enough. For enterprises, the high proportion of accounts receivable will bring some negative effects to enterprises. Accounts receivable will bring the following negative effects:
(1) reduces the efficiency of capital use.
When enterprises sell goods on credit, the inventory of goods decreases and the income increases, but the payment for goods is not recovered synchronously, which takes up a lot of working capital of enterprises. If accounts receivable account for a large proportion of working capital, it will lead to poor capital turnover. For overdue customers, it is still ineffective to take dunning measures, but with the proceeds, tax such as value-added tax and income tax will be generated, which must be paid in cash in the current period. In the long run, the existence of a large number of accounts receivable will inevitably affect the working capital turnover of enterprises, and even lead to the break of the capital chain in serious cases.
(2) Increased the cost loss of the enterprise.
Accounts receivable, as an investment made by enterprises to increase sales and profits, will inevitably generate certain costs. The first is the income from giving up other investments because of investing in accounts receivable, that is, the opportunity cost of accounts receivable. For example, investing in bonds earns interest income. Secondly, the management cost of accounts receivable mainly refers to the increased cost when managing accounts receivable. For example: the cost of investigating customers' credit status, the cost of recording books, the cost of collecting accounts, etc. Also, in credit transactions, the debtor is unable to repay the debt, and the creditor may not be able to recover the accounts receivable, which is the cost of bad debts. The cost of bad debts is inevitable. In general, the amount of accounts receivable is directly proportional to the cost of bad debts.
We should not only give full play to the advantages of accounts receivable in increasing sales and reducing inventory, but also minimize its negative effects. The phenomenon that Chinese enterprises are in arrears with payment for goods is serious, and a considerable part of it is caused by poor management of enterprises, so it is necessary to strengthen the management of accounts receivable of Chinese enterprises.
Third, ways to strengthen the management of accounts receivable of Chinese enterprises
1. Determine the reporting system of accounts receivable management.
A mature modern enterprise must establish a set of credit sales declaration system. When accounts receivable occur, the oral communication of sales staff is too casual, so it is necessary to establish a strict credit sales declaration system to control every link of accounts receivable. If the customer requests deferred payment, the salesperson must fill out a credit sales application form and report it to the company's credit management department for review. The application form lists the company name, bank, account number, credit amount, term, guarantor and other important information. After the credit management department has qualified the customer's credit evaluation, it can sign the "Application Form for Credit Sales" and report it to the main person in charge of the company for approval and signature. After the account is entered, the person in charge of accounts receivable is the manager and person in charge of the application department.
2. Establish customer credit files
The credit management department of an enterprise needs to establish special customer credit files, which are classified and stored for easy retrieval and regular inspection. Customer credit survey can be conducted in two ways: direct survey and indirect survey. Indirect investigation generally refers to grasping the financial status of enterprises through financial statements, borrowing the survey results of professional credit evaluation institutions, understanding the credit status of credit purchase enterprises through the credit department of banks, and understanding the credit status of credit purchase enterprises through industrial and commercial management departments, consumer associations and other institutions. Based on the above situation, nine kinds of credit status from high to low are listed for enterprises, namely AAA, AA, A, BBB, BB, B, CCC, CC and C. Before selling on credit, refer to their credit ratings for prior control.
3. Daily management of accounts receivable
After the occurrence of accounts receivable, enterprises should take measures to recover the money as soon as possible to avoid passively waiting for the other party to pay, otherwise it will easily lead to bad debts and make enterprises suffer losses. We should always follow up and investigate the operating conditions of credit purchase enterprises, especially focus on customers with large amount and poor credit, and remind customers from time to time by sending bills, telephone collection and door-to-door collection. In addition, the financial department of the enterprise should regularly check the accounts receivable with the sales staff to achieve internal consistency, and send a statement to the credit customers to ensure the synchronization of the accounts receivable amount, repayment period and other information to avoid unnecessary misunderstanding caused by poor communication. The sales department of an enterprise should also collect unpaid customers in various forms in advance, often visit customers who sell on credit, understand the customer's satisfaction with the products, and feed back to the production department in time, and at the same time understand the risk of bad debts owed by customers, and increase the collection of debts that may become bad debts.
4. accounts receivable collection procedures and techniques
The general procedures for collection of accounts include: letter notification, telegram, telephone and fax collection, face-to-face collection and recourse to law. According to the actual situation of enterprises, we should formulate appropriate debt collection procedures, strike a balance between the cost of debt collection and the loss of bad debts, and use legal means carefully. If the cost of litigation is greater than the amount of debt, and the prosecution is not in line with the principle of cost-effectiveness, there is no need to choose the mode of litigation.
The collection skills are mainly based on the characteristics of the other party, adopting a "combination of hard and soft" approach, and not illegally collecting accounts. In our country, interpersonal relationship is the first choice. Visit customers more at ordinary times, and good customer relationship is sometimes more effective than contract collection. Then there is telephone collection and face-to-face collection. Be familiar with the arrears information before contacting, choose the right time to communicate with customers, and show your firm determination to recover the payment during the dunning process. In addition, you can also use wheel fatigue tactics, often call for collection, and sometimes visit at home, so that customers are always in a state of tension, and sometimes you can get results.
To sum up, Chinese enterprises should pay full attention to the management of accounts receivable, avoid bad debts, improve the risk prevention level of enterprises and improve the management level of enterprises. It is very beneficial to the long-term development of enterprises and even to improve the commercial credit environment in China.
References:
Zhao Xiaoyun. Research on enterprise accounts receivable management [D]. Jiangsu University, 20 10.
[2] Wang. Research on accounts receivable management [D]. Institute of Fiscal Science, Ministry of Finance, 20 10.
[3] Shuang Xiaohong. Research on enterprise accounts receivable risk management [D]. North China Electric Power University, 20 1 1.
[4] Li Huiqiong. Modern enterprise accounts receivable management strategy [J]. Modern economic information.2011(11).
About the author: Zhao Rui (1982-), male, from Nanyang, Henan Province, is a teaching assistant and works in the accounting department of Henan Industry and Trade Vocational College. Research direction: accounting.