Risk Control In Accounts Receivable Management Of Enterprises

First, preventive risk control, precautionary risk control is to analyze the relevant factors that affect the recovery of accounts receivable before the formation of accounts receivable, and draw up a set of risk control system that can adapt to the specific circumstances of the enterprise.

Through this control system, the unreasonable accounts receivable will be restrained, and the bad debts and accounts receivable will be occupied for a long time.

There are two reasons for the formation of accounts receivable in Enterprises: one is the time difference between the delivery and receivables business after the sales confirmation.

Usually, after the sale, the goods will be recovered after a certain period of time.

This is due to the fact that in addition to the need for buyer confirmation, the settlement process itself needs to occupy a certain amount of time.

Therefore, only by adopting advanced and reliable means of settlement can we reduce the occupation of funds in accounts receivable, avoid the risk of accounts receivable to the normal operation of enterprises, and the two is accounts receivable caused by market competition.

Under normal circumstances, the more mature developed markets, the more intense competition between enterprises.

In addition to relying on product quality, price and after-sales service to expand sales, credit sales are also the main means of expanding sales.

However, credit sales will inevitably form accounts receivable, the more credit sales, the more funds the accounts receivable occupy, the greater the risk to the normal operation of enterprises.

In order to reduce or avoid risks, an enterprise must conduct a careful analysis of the customer's credit and make reasonable credit sales.

According to the above analysis, enterprises can set up some rules and regulations and measures to guard against risks.

1. according to the supply and demand situation of goods and services in the market, we determine the way of settlement and prevent risks. The way of clearing debts and debts is divided into cash settlement and pfer (non cash) settlement.

Transfer settlement includes check settlement, bank cashier and draft settlement, bank acceptance and commercial acceptance bill settlement, entrustment of bank receivables and settlement in different places, as well as exchange settlement methods.

Due to the different scope and conditions of various settlement methods, the time and reliability of settling accounts receivable are different.

Therefore, only in accordance with the supply and demand situation of goods and services in the market, and reasonable selection of appropriate clearing tools can we recover funds in time and avoid accounts receivable becoming bad debts or being occupied for a long time.

Usually, when goods are in short supply in the market, the seller should agree that the buyer should adopt the method of settlement without risk, such as cash settlement, bank cashier's bill or bill of exchange.

Because in this way of settlement, the seller must send the bank's cashier's bill or bill of exchange's receipt to the designated settlement bank at the time of collection. The bank will pay the bill immediately and the payment will be recovered in time.

For the seller, this settlement method controls the risk of accounts receivable to a minimum.

If goods are balanced in supply and demand in the market, sales shall stipulate that the buyer shall use the check to settle accounts and the bank acceptance bill to settle accounts.

In this way of settlement, the seller may encounter some risk of collecting money when collecting money, but it is much safer than other settlement methods.

When the supply exceeds the demand, the Seller shall, as the case may be, agree that the buyer shall use the commercial acceptance bill to entrust the method of settlement by the bank to reduce the risk of accounts receivable to the maximum extent.

In short, according to the supply and demand situation of commodities in the market, the reasonable way of settlement is prescribed in advance, which can prevent the risks brought to enterprises by accounts receivable which can not be recovered or occupied for a long time.

2., establish a customer credit evaluation system, avoid the risk of customer credit evaluation system is to evaluate customer credit, according to the evaluation results confirm which customers can give business credit, which can not, in order to control the risk of accounts receivable.

When evaluating customer credit, it can be analyzed from two aspects: qualitative and quantitative.

(1) qualitative analysis is the evaluation and analysis of customer's moral character, ability, capital, collateral, business environment, and so on.

Customer moral character refers to the customer's business reputation.

That is, the possibility of customers' willingness to fulfill their obligations.

Whether the client is willing to perform his obligation of repayment best determines the speed and quantity of account recovery.

Enterprises can check the past records of customers to see if they can pay their accounts in time and in full, and whether they have good debt paying habits.

At the same time, we can understand whether the debt relationship between customers and other enterprises is normal.

Generally speaking, the better the customer's moral character is, the smaller the risk of accounts receivable.

Customer capability is customer solvency.

The stronger the customer's solvency, the smaller the risk of accounts receivable.

The evaluation of customer capability mainly checks whether the customer has sufficient quick assets and the quality of quick assets.

Because quick asset realisation is faster, the more reasonable the customer owns the quantity and quality of quick assets and the ratio with current liabilities, the better the credit condition of customers is, the stronger the solvency will be, the less risk it will take.

Customer capital is customer's financial strength and financial status.

For the seller, the greater the customer's capital, the stronger the solvency and the smaller the risk.

An investigation of customer capital can be obtained from the balance sheet and owner's equity table provided by the customer.

Customer collateral is a guarantee asset that a customer can obtain from a commodity credit.

If a customer can provide collateral, his commodity credit will be reliable.

The sale of an enterprise to a customer is guaranteed without any risk.

There is a dispute or lack of understanding about customer credit. It is most effective to investigate whether a customer has collateral.

The business environment of customers is the business background of customers, such as the economic and political situation in the countries and regions where the customers are located, the industry in which customers are located.

All these factors affect the customer's ability to repay.

It is only to make a thorough understanding of these factors, to evaluate the credit of the customers, to confirm the conditions of the accounts receivable and to reduce the risk of the accounts receivable.

The quantitative analysis of 2 is to quantify the customer's credit, evaluate the customer's credit according to the quantitative index, and prevent the risk.

The quantitative process of customer credit index is to calculate the main indicators that can reflect the customer's solvency and financial status.

These indicators include asset liability ratio, liquidity ratio, quick ratio, equity debt ratio and so on.

Then, we will compare all the quantitative indicators reflecting customer credit with normal indicators. For example, under normal circumstances, the value of assets and liabilities (total liabilities / total assets) of enterprises should be less than 1:3. The value of current ratio (current assets / current liabilities) should be greater than 2:1, and the quick ratio (quick assets / current liabilities) should be greater than 1:1.. If we calculate the value of customer's debt paying ability better than the normal value, we can confirm that the customer's credit is good, and the recovery of accounts receivable has no risk.

We can continue or expand the credit given to our customers.

If the customer reflects the value of the credit index below the normal value, it can confirm that the customer's commodity credit has certain risks. Combined with the credit evaluation given by the independent credit rating agency, it can reduce or stop the credit to the customer and control the risk of accounts receivable.

According to the prior investigation and evaluation of customer credit, it is known as the "credit veto act" to determine whether the accounts receivable occur to customers, to control or prevent the bad debts or losses of accounts receivable from causing risks to the normal operation of enterprises.

Target risk control is to manage the formation process of accounts receivable in accordance with the predetermined objectives, and target risk indicators as the basis for controlling risks, and strive to reduce the risk of accounts receivable to the determined target risk level within two.

The target risk control process consists of two aspects: first, the formulation of the target risk standard; and the two is the implementation of the target risk standard.

The formulation of the target risk standard is based on the information standards drawn up by the enterprise's external risk standards and the average risk standards of the enterprises in the past years, and the normal risk criteria and ideal risk standards for enterprises are deduced.

The standard of risk identified externally is the reasonable ratio of accounts receivable accounted for by the external departments, enterprises, organizational units or independent evaluation agencies.

For example, if an enterprise gives a customer a 2% price discount, the reasonable period of payment of the customer should not exceed 10 days. If the price is given to 1% of the customers, the credit period of the customer shall not exceed 20 days. If the enterprise does not grant any credit preferences to the customer, the credit period of the customer shall not exceed 30 days.

There are different time limits for different clearing instruments, such as the period of check settlement is not more than 7 days, the longest period of commercial bill is 9 months, and the loss rate of accounts receivable should not exceed 5 per thousand.

These external standards provide enterprises with the criteria to confirm whether there is any risk or risk in accounts receivable.

If the accounts receivable of an enterprise exceed the standard period and ratio recognized by the outside party, the risk or risk is increased. If there is no excess of these standards, it is considered that there is no risk or risk.

In the process of receivables management, enterprises should control the possibility of risk of accounts receivable within these criteria.

The average risk standard is the average proportion of the actual average receivables in the past business activities and the proportion of the actual bad debt losses to accounts receivable.

This is based on the fact that the average amount of funds collected in the past has recovered the actual performance. After statistical calculation, it can be used as a reference for target risk control and implement risk control.

The ideal risk control standard refers to the minimum risk standard that accounts receivable management can be achieved under the most perfect conditions.

In order to control the risk in receivables at a minimum level (ideal level), this goal should be pursued by enterprises in the process of risk control, but it is difficult to achieve such a control standard, because the best operating conditions are difficult to achieve at the same time when the market is constantly changing.

The normal target risk standard is to control the risk of receivables through efforts under normal conditions.

This standard allows accounts receivable to have certain risks, that is, allowing a certain amount of bad debt losses and a certain amount of accounts receivable being occupied for a longer time.

The normal target risk control standard should be established according to the external risk standard and average risk standard, and refer to the ideal risk standard.

When controlling risks in receivables, enterprises should aim at normal risk standards and control accounts receivable within these criteria.

The implementation of the target risk standard is based on the objective risk standard set by the enterprise, which is used for the pre planning accounts receivable.

That is to say, for all the accounts receivable that will happen, analyze whether the risks will exceed the normal risk standard. If the risk exceeds the normal risk standard, then the accounts receivable will be stopped immediately according to the risk control standard.

If the risk of future accounts receivable does not exceed this risk standard, the amount of accounts receivable can continue to occur or expand.

Secondly, the risk standard is used as the basis for controlling in the event, and helps enterprise managers to strengthen effective control of corresponding receivables.

The main purpose is to make use of the target risk standard as the basis to judge the difference between the actual risk and risk control standards at any time, analyze the causes of the differences, and immediately feedback to the relevant management departments, take measures to correct them, and continuously reduce the risk of the accounts receivable in real time, so as to ensure that the target risk standards formulated are not broken.

Finally, the objective risk criteria are used as the basis for post evaluation.

In the risk management of receivables, in order to reflect the performance of accounts receivable management of relevant departments and personnel, clarify responsibilities, determine the quality and effectiveness of their work, assess the actual control situation of accounts receivable risks based on risk control standards, analyze the causes, and promote relevant departments and personnel to better work through rewards and punishments, reduce the risk of accounts receivable, and strive to maintain the integrity and safety of this asset.

Three, cost risk control, cost risk refers to the increase in the cost of accounts receivable to enterprises, which may exceed the chance of increasing sales profits to enterprises.

Cost risk control is to increase the cost of accounts receivable to enterprises and take measures to control the sales profits below the enterprises, so as to achieve the control of the risk of bad debts receivable to the normal operation of enterprises.

According to the analysis of the causes of corresponding accounts receivable, under the market competition conditions, the reason for accounts receivable is mainly to expand credit sales.

Selling on credit means that enterprises must pay a certain price, that is, a certain amount of funds should be padded, and a certain administrative cost will be generated.

Whether there is credit sales and the formation of accounts receivable should not only carry out credit analysis.