Value-Based Business Credit Management

Credit management is a very important component of business management. The level of credit management has everything to do with the accomplishment of corporate objectives. More specifically, in order to create value and generate profits, corporate managers need to wisely incorporate the component of credit management into the entire business cycle. At this time, China is undergoing through some dramatic economic transformation. During this process, the loss of credit has become a major issue that hinders the growth of the Chinese private sector. Globalization and China's accession to WTO have prompted the Chinese businesses to enhance their control of credit management in order to implement the credit management system.This paper starts from the points of both theory and practice to analyze value-creation-based business credit management system. Through the analysis of the value factors and consequently the credit management, authors argue that corporate managers could utilize such analytical results to determine the value benchmark and thereby the effect upon value. In terms of the relationship between value creation and credit management flow, including its associated issues of protecting the system, the impact could also extend to the external environment of any business. As a result, this paper suggests the above steps as to materialize the complete cycle of value-creation-based business credit management.This paper has seven chapters. The first one analyzes the credit problem in Chinese enterprises in order to disclose both the internal and external impairments it could cause upon the development of these businesses as well as upon the general economy. The second chapter examines the value system of enterprises and its effect upon the business objectives, including the detailed introduction of business value and its management. The third chapter introduces the content ofbusiness credit management, such as the definition of credit risk and its related contents. On the other hand, chapter three also takes a fresh new look of the impact of business credit management upon value creation. Based on the foundation of chapter two, this chapter analyzed the process of business credit management as the core relation between business management and value creation. As regards to chapter four, it is the highlight of this paper. It introduces the four key management strategies and other strategies of purchases on credit as well as on lending, all based on the business credit management of value creation. The emphasis of value creation is affected not merely by the credit management model or credit management skills, but rather by credit management strategies and their impact upon the business value creation.Within each strategy of the credit management process, the first step should be to enhance enterprise value creation through analyzing the impact upon business value creation, before understanding how to improve the strategy and its assessment standards. At the end, the author also analyzed the effects of purchase on credit upon the enterprise value, including the strategies of enhancing value creation. Chapter five focuses on the design principles and strategies of protecting the system of business credit analysis' research of base-on-value concept. Through credit management flow, the author designed the concept through introducing total quality management and total cost flow minimization. Besides the function of analyzing the credit information system, the author also brought up the analysis of investing in credit information system through utilizing a balanced score card methodology of performance management and design a set of assessment indicators. The foundation is an efficient credit management system that relies upon the infrastructure framework. Chapter six aims at the external factors of business credit management, such as the social credit system. This chapter analyzes the pressing issues in establishing China's credit management structure by raising the constructive suggestions. Finally, th...