Three Core Elements Of Accounts Receivable Management

Accounts receivable management involves enterprises.

First, dynamically determine the best limit of accounts receivable, and maintain the balance between the profits and risks of enterprises.

Accounts receivable are enterprise funds occupied by customers. Enterprises can not hold accounts receivable which exceed their own level of strength. The total amount of accounts receivable must be scientifically controlled.

Finance must be explained to the business decision - making, marketing management and marketing executives, which should be expanded on credit or on credit.

At present, there are three methods to reasonably determine the best accounts receivable of the enterprise, which are:

1. simple measurement algorithm, by credit sale customer group classification (set a certain customer group I), to calculate the different customer groups should be.

The optimal holding amount of accounts receivable is calculated and the optimal holding amount of accounts receivable is aggregated.

The specific methods are as follows: first, according to historical data, the optimal receivables period of different account groups is determined (set as Ni). Secondly, it is estimated that the annual sales volume of the customer group (set Si) is the best holding amount of the accounts receivable (set to di) di=Si*Ni/360, and the best cash holdings of enterprise accounts receivable can be obtained through Di summation.

In order to avoid the shortcomings of whether the accounts receivable collection period is reasonable in the history of enterprises, we can set up the target of improving accounts receivable for different customer groups, so as to get closer to the optimal accounts receivable holdings.

2. investment cost method, the accounts receivable as a business to the customer's capital investment, is to expand sales and profits of investment, when the receivables increase profit is greater than the increased cost, enterprises should expand credit sales, on the contrary, enterprises should moderately reduce credit sales.

The specific method is to estimate the opportunity cost of accounts receivable (A1), which refers to the loss of funds invested in other aspects due to the occupation of funds due to accounts receivable, the average balance of accounts receivable, the rate of opportunity cost (with the weighted average capital cost of enterprises), and the management cost (A2), which refers to the expenses corresponding to the management of accounts receivable. The cost of bad debts (A3) refers to the losses incurred by accounts receivable which can not be recovered at any time. The shortage cost (A4) mainly refers to the losses caused by the decrease in sales due to insufficient investment in accounts receivable.

The total cost of accounts receivable is A=a1+a2+a3+a4, and the total cost presents a U curve with the increase of accounts receivable holdings.

Trend change analysis: the total cost at the beginning is relatively high, mainly the shortage cost; with the increase of credit sales, the shortage cost decreases, and the opportunity cost, management cost and bad debt cost increase gradually, and the whole cost curve decreases. Credit sales increase further. At the lowest point of the curve, the sum of opportunity cost, management cost and bad debt cost is equal to the shortage cost. The corresponding accounts receivable is the best holding quantity. Thereafter, the opportunity cost, management cost and bad debt cost that the credit market expands will start to outweigh the shortage cost, and the increase of the receivable account will not be enough to make up for the additional cost.

3. the comprehensive analysis method is used to analyze the scale of accounts receivable from the four aspects of the company's tangible income, the ability to borrow money, the cash flow target and the market strategy, so as to determine the optimal scale of accounts receivable.

The author believes that there are only third ways to comprehensively consider the cost benefit, market strategy and overall operational risk of credit sale on the basis of qualitative and quantitative methods.

The first step is to estimate the optimal scale of accounts receivable by measuring the tangible benefits of credit sale.

First, we should fully understand and estimate the opportunity cost A1 of the accounts receivable, the management cost A2, the bad debt loss cost A3 (the preceding investment cost method has been described); secondly, we should carefully estimate the income from accounts receivable: the tangible income derived from accounts receivable; V1 refers to the marginal contribution made by the enterprise through credit sale, and the variable cost of sales revenue; the potential income V2 of accounts receivable refers to the future income of the new customers brought by the development of new business customers to improve the market share and enhance the product image of the enterprise.

When the receivable account (v1+v2) is equal to the cost (a1+a2+a3), increasing the accounts receivable can not bring positive benefits to the enterprise. At this time, the enterprise has the biggest economic benefit because of credit sales, and the accounts receivable rescue amount is the best scale.

The second step is to analyze the impact of debt capacity on the scale of accounts receivable.

The credit sale scale of an enterprise is not unlimited expansion even if the revenue from credit sale is greater than the cost, and the external credit sale of an enterprise must be restricted by the contrast between the cost and the profit of the credit sale, and the scale of the surplus funds and the ability of borrowing the enterprise.

Generally speaking, in a stable production enterprise, the assets of enterprises are relatively stable, and the surplus funds beyond the normal production of enterprises can not be substantially increased, and the increase of the current assets of accounts receivable will inevitably bring about the increase of current liabilities, so the scale of accounts receivable will ultimately be reduced by the debt capacity of enterprises. The third step is to pay special attention to the impact of the scale of accounts receivable when the cash flow control objectives are targeted.

The scale of accounts receivable is also restricted by the cash flow control objectives of enterprises. In the course of operation, enterprises should also consider basic capital requirements, such as raw material procurement, repayment of reward and short-term liquidity loans.

The existence of unreasonable accounts receivable and prolonging the business cycle will inevitably affect the capital circulation of enterprises, and a large amount of liquid funds will be precipitated in the non productive links, resulting in the shortage of cash in enterprises, affecting the demand for liquid capital, and ultimately endangering the normal production and operation of enterprises.

The fourth step is to consider the impact of the enterprise's market strategic objectives on the scale of accounts receivable.

The scale of accounts receivable of enterprises is also influenced by the market strategy of enterprises, and the marketing strategy of enterprises is affected by the product market.

Generally speaking, in different stages of product market development, the marketing strategy of enterprises is different. Different market strategies should choose different credit policy and scale of accounts receivable.

On the basis of judging the optimal scale of accounts receivable on the basis of tangible income, taking into account the influence of factors such as debt capacity, cash flow control objectives and market strategic objectives, we analyze and judge the cost and risk that enterprises are willing to bear in order to achieve the strategic objectives of the market, and then determine the maximum scale of accounts receivable.

The best accounts receivable of enterprises is not equal to the highest level of accounts receivable held by enterprises. It represents only an average level of accounts receivable.

Enterprises should adjust their accounts receivable holdings based on quarterly changes in sales, competitors' situation and promotional effects, so as to maintain a balance between profits and risks.

Two, improve the marketing business process, establish a dynamic account receivable monitoring system, and promptly make up for the defects in the daily management of accounts receivable.

A large number of investigations and studies show that accounts receivable of enterprises can not be effectively controlled. On the surface, it is caused by bad market environment and customer credit condition. However, the direct and fundamental reason is the defect of internal management of enterprises.

Enterprises should sort out and reorganize the marketing business process, establish a dynamic account receivable monitoring system, and prevent the risk of accounts receivable increased due to the poor internal management of enterprises. The following five aspects should be perfected:

1., implement the whole process credit management and avoid the risk of accounts receivable.

The whole process of credit management, including the establishment of institutions, the formulation of processes and systems, the implementation of personnel and the clarification of responsibilities, and the process control before and after the event, through the comprehensive control of the key business links in the process of business pactions, can achieve the goal of controlling the credit risk of customers and improving the recovery of accounts receivable.

2., improve sales contract management and control accounts receivable wind.

Risk.

A loophole contract is one of the causes of bad debts. The reason why a contract becomes a control risk is that it stipulates the rights and obligations of buyers and sellers in accordance with the contract law in written form, and is protected by law.

In addition to having no loopholes in the law, contracts signed between enterprises and customers should also try to set up protective clauses in contracts.

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3., strengthen the daily management of accounts receivable before maturity, and prevent them from happening.

Generally speaking, in the management of accounts receivable, it is more effective to strengthen supervision before receivables due to soft expiration.

Strengthening the daily management of accounts receivable includes the following aspects: timely communication with customers, understanding of customer complaints and requests, and avoidance of customer pactions.

銷售條款、貨物質量、交貨期、對于結算方式的錯誤理解，及時協調有關部門采取補救措施，減少糾紛向拖欠貨款的方向發展;做好應收賬款的跟蹤監控工作，盡早發現客戶的經營或產權發生重大變化的征兆，及時結清貨款;及時調整客戶的信用額度，如果客戶連續超協議占用應收賬教，則應對客戶的信用額度進行調整，甚至暫停客戶的信用，并通知客戶相關政策變動的原因;根據客戶的付款習慣在應收賬款到期前提示客戶付款;認真對待應收賬款的賬齡，企業要做好應收賬款的賬齡分析，密切注意應收賬款的回收制度和出現的變化;及時與客戶對賬，要杜絕與客戶對不上賬而產生的壞賬，建議每年至少二次或可以在客戶不按時付款時和在付款金顛與發票金額相差較大時進行對賬;企業領導層應定期召集召開應收賬款會議，敦促貨款回收、及時協調處理應收賬款存在的相關

Problems; through business training and implementation of accounts receivable accountability system, enhance sales personnel accounts receivable management consciousness.

4., constantly improve the collection mechanism, and strive to receive accounts receivable in full and timely recovery.

The recovery mechanism of accounts receivable is to monitor accounts receivable through a series of management measures after accounts receivable, so as to ensure timely collection of accounts.

From the practice of account management, it is reflected in the time of customers' scheduled or arrears, that is, the length of account is the barometer of whether accounts receivable can be recovered, which corresponds to the probability of successful accounts receivable collection.

Accordingly, we should improve the collection mechanism from the following aspects: to ensure that customers receive goods and sales invoices, it is the basis for collecting money and even litigation.

The accounts receivable entering the "early warning period": one week before the accounts receivable expires, inform the salesperson promptly to remind the customer to arrange the funds payable in advance, to implement the expected payment amount and time; due accounts receivable: when the accounts receivable expire, contact the sales personnel; if the customer has paid the money, if he fails to pay in time, he needs to know the current fund status of the customer and the expected payment time, and strictly control the new orders of the customer.

Overdue accounts receivable: we should strictly control the execution of new orders for customers. For overdue accounts receivable within 3 months, enterprises should mainly take internal treatment; for accounts receivable overdue for more than one year, we can consider litigation.

5. other aspects.

It mainly includes: improving the level of information management of accounts receivable, providing market information in a timely, accurate and complete manner; carrying out special audit of sales activities regularly or unregularly, and ensuring the effective recovery of accounts receivable.

Even if a perfect account receivable monitoring system is set up, there will be no guarantee that there will be no overdue accounts receivable. There are two main reasons for this. First, whether the monitoring system is reasonable and whether it is effectively implemented. Secondly, the market economy is changing rapidly, which may lead to the deterioration of the debtor's financial situation and the inability to repay debts at maturity.

At the same time, enterprises should also consider the cost effectiveness of the original drama and solve the problem of efficiency and so on, to establish a set of accounts receivable monitoring system matching with the operation of enterprises, so that enterprises can control the risk of accounts receivable at any time while increasing market share, improve the quality of accounts receivable, and accelerate the turnover of accounts receivable.

Three, enrich the connotation of marketing performance evaluation, and give full play to performance evaluation in terms of incentives and constraints, regulation and control, and goal orientation.

Promoting the management of accounts receivable in Enterprises

Since then, the market environment of enterprise marketing has undergone profound changes in the marketing foundation and scope: market operation rules, market competition mode, market operation and management system. Therefore, as an important part of enterprise marketing management system, enterprise marketing performance evaluation system must adapt to new challenges and new requirements of environmental change, and carry out reform and innovation, so as to bring into play the important functions of performance evaluation system in the evaluation, reward and incentive, regulation and control, and behavior guidance of enterprise marketing activities.

1., reconstructing the enterprise marketing performance evaluation index system and promoting the further improvement and adjustment of market management should have the following five characteristics in the design of marketing performance appraisal indicators: specific, measurable, accessible, relevant (with company strategic objectives, departmental tasks and responsibilities) and time based (explicit time requirements); in the construction of marketing performance appraisal index system, we should avoid paying too much attention to the financial performance indicators of marketing performance, while ignoring the intangible and long-term performance non-financial indicators reflecting the future market potential level. We should set up a marketing performance evaluation index system from the three dimensions of key performance, key position capability, work attitude (learning and innovation).

At the same time, we should adjust the corresponding assessment index weight according to different product life cycle, different marketing objectives and different marketing areas.

2., we should carry out performance appraisal and return the assessment to real performance.

In order to make the marketing performance appraisal truly play the role of continuous improvement and continuous improvement of marketing quality, enterprises must position performance appraisal in performance improvement.

The performance appraisal system, including performance goal setting, performance communication and guidance, performance evaluation and feedback, performance improvement and improvement, is established, emphasizing the participation of marketing personnel in the examination process, emphasizing the communication and guidance in the process of performance management, emphasizing that the purpose of performance evaluation is to improve the shortage of staff work process, and to make marketing performance appraisal a part of the market management system, rather than a separate link.

Enterprises should establish a comprehensive support system to ensure the performance appraisal results.

It mainly includes the support of performance oriented corporate culture, and the design of incentive and restraint system for performance appraisal.

The goal of marketing performance appraisal is to link employee marketing activities with the market management objectives of enterprises through performance appraisal, thus achieving the strategic objectives of enterprises, so we should constantly improve the performance of employees and enhance the overall performance of the enterprise market.

Enterprise accounts receivable management is essentially seeking coordination and consistency between the two objectives of performance growth and risk control. Managers need to stand at the height of enterprise strategy and adopt scientific and systematic methods to seek the best solution to solve the defects of internal marketing management, so as to ensure the final realization of the value objectives of accounts receivable.