Credit management, in order to fully and effectively internal control and external treatment of enterprises, to ensure that enterprises sell as many products as possible, have a good market share at the same time, to ensure the safety of enterprises. In the market economy, risk and income are usually at both ends of the balance. Enterprises stimulate the rapid growth of sales due to credit sales, but credit sales will inevitably lead to the dilemma of account recovery, and even devour corporate profits, making enterprises have no income, and may cause bankruptcy in serious cases. Therefore, enterprises need to shield and mitigate the impact of credit risk through business credit management.
1. Credit risk factors
Understanding the problem is the premise of solving the problem. Credit risk factors are usually divided into external factors and internal factors, and internal factors are usually the key to risk control.
The external factors of credit risk include the increasing competition pressure in the open market and the decline of enterprise benefit; The construction of social credit environment has not been completed; Laws and regulations are not perfect, and the punishment mechanism for dishonest behavior is not perfect; The social credit system is not sound, and the development of the credit management service industry is not deep enough.
The internal factors can generally be summarized as the lack of enterprise credit awareness and the weak willingness to actively perform the contract, which are as follows:
Lack of scientific credit management system and organizational system
The internal management of the enterprise is chaotic, the credit management is mere formality, the approval procedure of credit sale is not perfect, and the relevant departments such as financial sales have unclear responsibilities and unequal powers and responsibilities in credit management; Poor implementation of credit management and lack of effective control over sales/repayment processes; Customer information management problems, files are incomplete; Lack of effective communication between finance department and sales department; Collusion between internal business personnel and customers; Internal funds and project approval are not scientific, and leaders make subjective and blind decisions.
External lack of scientific credit policy and standardized business management process
Lack of sensitivity to customer dishonesty, can not accurately judge customer credit status, can not update customer credit information in time; The settlement method and settlement conditions are not clear; Over-indulgence of customers leads to lax monitoring of accounts receivable and lack of effective means to recover arrears.
Second, the source of enterprise credit risk
In the transaction process of an enterprise, credit risk factors will become the risk points that have a real impact on the production and operation of the enterprise. The credit risk points of the enterprise mainly come from the following transaction process:
1. Do not pay attention to customer selection when developing customers, so that enterprises cooperate with customers with bad credit;
2. Ignore the customer’s credit status when trying to obtain the order, and mistakenly select credit conditions (such as giving too high credit limit or credit period) when negotiating with the customer;
3. The agreement is not clear or no agreement at the time of signing, the contract is the key guarantee for credit fulfillment, and the improper conclusion of the contract terms will cause the enterprise to lose its due rights;
4. Do not pay attention to the marks when shipping, or do not deliver according to the agreement, to provide reasons for future payment arrears;
5. There is no planning or strategy for collection, and whether sales personnel or financial personnel can proactively collect payment for goods determines the recovery rate of accounts to a considerable extent.
6. If the payment is not handled in time after default, the book wealth will not fall into the bag for a long time, making the accounts that could have been recovered become bad debts;
The above six links are the most prone to problems in the transaction process between enterprises and customers, and are the key to the risk control of enterprise transactions. Only by clear understanding of these key links and sources of risk can we formulate effective solutions to these problems.
Third, the important business management link of credit risk control
The following five business management links play a central role in credit risk control:
1. Select customers, identify customers with good credit status and can achieve sustainable development;
2. Develop reasonable and observable credit standards, conduct credit evaluation on customers and strictly implement them in the transaction process;
3. Clear credit conditions, according to the enterprise’s credit standards to confirm the credit customers, scientific development of credit sales conditions;
4. Real-time marks in the transaction process, timely tracking of accounts, strengthening the management of contract performance, and strengthening the monitoring of accounts receivable;
5. Timely handling of crisis, the best collection opportunity for enterprises is the early stage of payment default. For long-term payment default, factors such as timeliness should be paid attention to, active and effective recovery, and external management methods should be introduced when necessary.
Fourth, the main problems of enterprise credit
In the current social and market environment in China, according to the results of the special survey on enterprise credit conducted by the China Entrepreneur Survey System, default, default and counterfeiting are the main problems in enterprise credit.
Post time: Nov-13-2023