Attention Should Be Paid To The Control Of Small Overhead Within Enterprises.

In the enterprise

In management, customer credit evaluation is a key work, and also a focal point of contradiction in internal management decisions of enterprises.

If the credit review is lax, it will lead to excessive loss of account risk. If the evaluation criteria are too strict or too complicated, it will reduce the efficiency of the sales business, and even make the company lose valuable order opportunities.

In the actual management consulting work, the author realized that the key to solve this contradiction effectively is that the enterprise needs to set up a set of scientific customer credit evaluation index system, so that managers at all levels or credit analysts should make accurate and simple credit evaluation decisions.

The core issue of the customer credit review is to discover and evaluate the credit risk of the customer, that is, the credit customer fails to fulfill the payment liability risk stipulated in the contract on time.

The credit risk of customers is influenced by many factors and has greater uncertainty.

In the face of a large amount of credit investigation information, from what angle can we find the potential risk or payment ability of the customer more accurately? The author suggests that the assessment and assessment be carried out from four aspects, namely, the statutory qualification, financial status, product characteristics and credit records.

First of all, an enterprise needs to examine its basic contract qualification or performance capability from the perspective of the legitimacy of a client (natural person, enterprise or social organization).

As the main body of a contract, the judgement of its effectiveness and performance depends on the analysis of the legal or public information of the client.

Specifically, information in this area includes all kinds of public or open information, mainly based on the contents of business registration.

This is the basic information that enterprises must first acquire when establishing business relations with customers.

The key information indicators include the legal name and address of the customer, the legal form and registered capital of the legal person, the ownership structure of the enterprise, the business scope of the enterprise, the date of registration, the business life of the industry, the internal organization of the enterprise and the personal credit of the main manager.

This information reflects the ability of a customer as a socioeconomic entity (enterprise, group or natural person) to undertake economic responsibility externally.

Through the verification and analysis of the above information indicators, we can find and predict the legal risks and contractual risks of customers, thus making a judgement on the basic level of customers.

Financial information directly reflects the customer's operating status, assets and payment capacity. It needs to be carefully verified, judging the credit ability and risk of customers.

For important credit customers, the financial statements (mainly income statement, balance sheet and cash flow statement) or key financial information in the latest three months are required.

The financial condition of customers through financial information review mainly includes four aspects: the growth of customer profit (profitability), the working capital status of the customer (short-term payment ability), the customer's assets and liabilities (long-term payment ability) and the scale of customer capital (the strength of customer capital).

Of course, we need to make more in-depth analysis and judgement on the credit status of customers, and we also need to apply some key financial ratios.

The financial ratios often used in credit analysis include four types:

1. The liquidity ratio mainly includes the liquidity ratio and the quick freezing ratio, reflecting the solvency of the customer when the short-term debt is due.

2. Activity ratios mainly include fixed assets turnover, receivables cycle, accounts receivable turnover and inventory turnover. These ratios reflect the amount of assets that customers must use to achieve predetermined sales volume.

It can be used to measure the efficiency of specific items in customer assets.

3. The financial leverage ratio mainly includes debt / asset ratio, debt / net asset ratio and fixed cost bearing ratio. These ratios reflect the degree of customer dependence on borrowed capital and the ability of customers to fulfill their obligations of long-term debt and principal and interest payments, that is, to investigate the efficiency of customer debt management.

The profitability ratio mainly includes operating profit margin, sales return, asset return and common stock yield. These ratios reflect the relationship between customer profitability and their investment or sales volume, which is used to measure the overall management efficiency of customers.

In the actual analysis of the above financial ratio, the ratio of each item is appropriate and the different industries are different. It is necessary for the credit analysts of the enterprise to summarize and summarize the financial characteristics of the industry or the enterprise.

Internationally, credit management expert Alexander Wall has put forward a simple analysis method of financial credit ability. He combines seven financial indicators with linear relationship to evaluate the credit level of an enterprise.

The steps of the method are as follows: 1. Select seven financial ratios, determine the standard ratio and the proportion in the total score respectively; 2, compare the actual ratio with the standard ratio, and score each financial index; 3, finally find out the total score (see the example in the table below).

The higher the total score, the stronger the credit ability of the customer; the lower the total score, the greater the credit risk.