Study On Internal Control Of Accounts Receivable Of Hongsheng Group

Accounts receivable is a legally enforceable claim for payment from a business to itscustomer/clients for goods supplied and/or services rendered in execution of the customer’sorder which is an important part in corporation working capital management. In acompetitive market, using credit properly and strengthen the management of accountsreceivable appear very important. Since second half of year2012, under the downwardtrend of Chinese economy coal mining enterprises also showing poor sales because ofsustained oversupply of coal products. At the same time, loan recovery hampered and owedmoney remains high have a serious impact on business production and enterprisemanagement.This paper studies the reason for high HS Group’s accounts receivable duringthree-months research in this enterprise. First, analysis of receivables trends HS Group inrecent three years combined with whole industry and find that problems are caused both byinternal facts and external facts, Therefore, in second part using risk-based internal controlsystem of accounts receivable to build HS Group’s accounts receivable management systemin order to control scale of trade receivables. Specific measures in this paper refers todomestic and international academic research of accounts receivable in recent years andthe management can be divided into three parts: feedforward control, concurrent control,feedback control, companies should determine how to control their accounts receivablelevel taking the period into account. In addition, managers should use paragraphrefinancing and other means to reduce the difficulty of financing for enterprise. HS Groupshould make efforts to to create their own accounts receivable management system to helpcompanies quickly bottomed out in the economic downturn and become ahead of othercompanies.