Enterprise Account Receivable Risk Control Study Based On Process Reengineering

The fierce business competitions under the condition of market economy drive the enterprises to sell their products in various ways. More and more companies sell on credit to expand the market, besides keeping reputable brand, stable quality, competitive price, aftersales service and enhancing promotion. Compared with cash sales, credit sales can achieve higher sales volume based on same product price, similar quality and aftersales service. Some companies have to sell on credit to win more customers, enlarge market share and enhance their competitiveness, which lead to a large amount of account receivables. The risks of account receivables result from the process of selling on credit. Therefore, it’s urgent to fundementally alleviate the risks of account receivables and establish effective receivable risk prevention system according to the actual situation of the enterprises.We found a lot of problems in the process of account receivable management, such as lack of customer credit evaluation, unstandard contract conclusion, malpractices in approval process and delivery over credit limit. The essential problem is the defective internal control system led by unreasonable business processes relevant to account receivables. To enhance process management and upgrade internal control system are the preconditions of controlling risks of account receivables.The paper took A Company for example, analyzed and studied its current conditions of account receivables and the internal risk control measure of process reengineering. The real example study demonstrated that the pros&cons of process directly affect the corporate operation efficiency and risk control. Therefore, it’s practically significant to study the risk control of account receivables from the perspective of process reengineering.