The Financial Effect Of Business Credit Management

Changhong group.Ltd made a misplay in its credit management which led to 'a disaster of RMB 4,000,000,000'. This case taught all Chinese corporates a lesson.All Chinese corporates should make up a missed lesson of credit management.An operator or manager of any corporate will put the financial condition of the corporate on the first place,because it reflects the course and result of the operation and the extent of implement of the designed goal. Because of the reason listed above,by analyzing the financial effect of corporate credit management, I conclude that corporate credit management will affect the financial condition directly by influencing account receivable.On the other hand,account receivable will influence the sale,profit, cash flow,asset and so on,thus corporate credit management will affect the financial condition indirectly.By listing both foreign successful case in credit management and domestic failing case,I give advice on how to reinforce corporate credit management. The path and measures to reinforce corporate credit management maily include building exterior guarantee factors and developing interior corporate credit system with the latter as the emphasis.the frame of corporate credit system will be set up with largest account sale as the goal,account receivable management as the core,professional department of credit management as the main body.Every step will be brought into effect successfully by setting down credit policy and adopting scientific and advanced technic and technology.