Research On Accounts Receivable Financing Model Of DH Company

The difficulty in financing for Small and Medium Enterprises(SMEs)is a long-standing problem.Due to the particularity of small and medium-sized pharmaceutical enterprises,SMEs require highly in the timeliness and security of inventories.It is hard for SMEs to implement a inventory mortgage loan.Also,a large quantity of accounts receivable caused by sales on credit are easy to drive enterprises into crisis.Accounts receivable financing takes the actual accounts receivable as a guarantee for financing.This method not only reduces the risks of turning accounts into cash,but also improves the financial condition of enterprises as well as the liquidity of assets.All those are helpful for enterprises to seize the opportunities for development.Therefore,compared to the traditional way of financing,accounts receivable financing is more suitable for SMEs because of less credit risks and stronger operability.This paper selects the solution of the financing difficulties of SMEs as a breakthrough,it is great significance for the study of accounts receivable financing.Based on the literature research,this paper adopts the methods of combining literature research,theoretical analysis and cases to sort out and summarize the relevant theoretical research on the accounts receivable financing its concept,methods,business processes and risks.This paper lists the advantages and disadvantages of three different accounts receivable financing models.The first part of case analysis examines the overall financial situation of DH company.It is found that the rapid growth of the operating income has led to the difficulties of turning the large quantity of accounts receivable to cash,which has a strong impact on the business liquidity.Through the analysis of the current financing situation,the study finds that many problems exist in the present financing channels such as the high cost of financing and the large demand for financing and then put forward the necessity of implementing the financing of accounts receivable.When building the selection model of the accounts receivable financing of DH company,this paper uses the method of AHP and FEM to compare the financing efficiency of three kinds of accounts receivable financing models.It draws conclusion that the most suitable way of financing for DH company is accounts receivable factoring.Then the paper highlights the key points in the specific operation of the accounts receivable factoring of DH company.The comparison of traditional financing and the expected economic effects prove that accounts receivable financing can bring greater economic benefits for campany.Finally,this paper advances safeguards of the implementation of accounts receivable to ensure that the accounts receivable financing can run smoothly.Accounts receivable financing changes management from passive posture to positive posture.It is a new method of financing for the enterprises and the management of accounts receivable,which can provide reference for the small and medium-sized enterprises with the same operating conditions.