Research Of Institution Accounts Receivable Risk Control

With the rapid advance of institutions reform, the institutions have gradually separatedprofit-making activities and non-profit activities. As business enterprises do, the profit-making activities directly participate in market competition. The institutions have become oneof the main competitors of the market economy. In order to expand their business and getmore profit, institutions also sell products or services in credit approach. While credit canexpand revenue, it also brings a lot of accounts receivable. In this way institutions accountsreceivable risks came into being. Compared with corporates, the institutions do not have agood system in accounts receivable management. They are lack of a standardized salesmanagement system and a good awareness to guard against market risk and more prone to baddebt losses. Most institutions can’t effectively manage receivables, a lot of working capital isoccupied by accounts receivable. Accounts receivable has become an important factor in thesustained and healthy development of institutions. How to control the risk of accountsreceivable of the institutions has become an urgent need to address the problem of themanagement of the institutions. However, the current academic researches are mainly focusedin the field of corporate accounts receivable management. The researches on this particulararea of the institutions receivables are exile. Therefore, building a reasonable risk controlsystem on institutions will do a contribution to the sustainable developments of theinstitutions of our nation.Based on the theory of business administration and risk management, using acombination of normative analysis and empirical analysis method, this dissertation introducedthe theory of the accounts receivable risk management, analyzed and summarized thedrawbacks and the causes of existing accounts receivable risk control of Chinese institutions.On this basis, it took FJ and Inspection Center as an example to comprehensively expoundthat how the receivables risk control system is implied into real work.This dissertation indicate that institutions should implement a comprehensive riskmanagement system which take the internal control as main structure to control the risk ofaccounts receivable. The control environment, risk assessment, control activities, information and communication, and monitoring are all should paid attentions by the institutions. Finally,it proposed a receivables risk control system which is suitable for the present situation of ournation.