The Study Of Company Z's Credit Sales Management

Due to the high product value,occupying much cash flow and other reasons,construction machinery industry depends largely on installments,bank mortgages,financial leasing and other credit sales.The construction machinery industry is also one of the industries,which are most closely linked with the national economic development of a country.This industry's products are widely used in the construction of national infrastructure including construction,railways,ports and highways.Since the fiscal stimulus policy of the financial crisis in 2008-2009,the state has vigorously promoted the construction of infrastructure and has greatly boosted the demand for construction machinery and equipment.In order to obtain market share as much as possible,most construction machinery enterprises began to promote sales by reducing the proportion of down payment,extending the installment deadline,adjusting the responsible parties for financing lease repurchase etc.,which ledto over-competition and rapid market saturation in the industry,and disturbed the industry's credit sales rules and.The risks of accounts receivable arising from the sales of construction machinery enterprises are constantly appearing.Based on this macroeconomic background,this paper studies the status quo,potential problems and corresponding management measures of Z Company's credit sales.The purpose of the dissertation is to deepen our understanding of the nature of credit sales from theoretical and practical perspectives.It also aims at finding a reasonable way of risk control and providing reasonable suggestions for the standardization of credit sales in construction machinery industry.The first chapter of the thesis is the introduction.It elaborates the research background,content and methods,and the structure of the thesis.More specifically,the main contents of the thesis research include: analysis of the status quo and motivation of credit sales in construction machinery industry in China;supply and demand factors and risk sources affecting credit sales of construction machinery industry;comparison with other countries;analysis of credit sales status of Z company and Z's credit sales riskmanagement.The main research methods of the thesis include quantitative analysis,literature research and comparative analysis.The second chapter of the thesis is a literature review both at home and abroad.It focuses on reviewing the domestic and international literature on the definition and motivation of credit sales,the risk of credit sales,and the management of credit sales risk.Credit sales,as a long-established transaction method,has not been strictly defined in domestic academic research.In order to maintain the consistency of the paper,this article adopts a broad definition of credit sales for the construction machinery industry,including any form of non-immediate buying and selling such as bank mortgages,installment payments,and financial leases.Changes in the company's own operating conditions,changes in policies,and loopholes in contracts can all lead to credit sales.From the perspective of credit sales risk management,the strengthening of accounts receivable management and customer credit evaluation is advocated by most scholars.The third chapter of the thesis analyzes the status of credit sales of construction machinery industry and Z company.This chapter takes the capital and technology-intensive characteristics of the construction machinery industry as the starting point,and discusses the supply and demand factors that affect the credit sales of the industry.The analysis points out that the development of the Chinese construction machinery industry is demand-driven.After the financial crisis in 2008,the state's investment in infrastructure construction and real estate market has directly driven the development of credit sales in the construction machinery industry.The proportion of account receivable to operating revenue of the seven largest construction machinery enterprises in China has been increasing since 2005.Especially,since 2010,the growth rate of this proportion has increased significantly.The fourth chapter of the thesis takes Z company as the main analysis object,and discusses the problems of Z company's credit sales from the aspects of industry commonality and enterprise characteristics.When Z company's credit sales customers do not pay for overdue payment,or even refuse to pay,it will have an adverse effect on the company's financial status and operating conditions.The main reasons for Z companies to fall into credit sales issues include over-competition in the industry,insufficient pre-sales investigations and credit assessments,and inaccurate returns after sales.Based on the previous analysis,the fifth chapter of the thesis concludes that Z company's continuous exposure of credit sales risk is the result of interaction between internal and external factors.For Z company,in the specific policy environment,the status quo of the industry development,how to properly carry out credit sales is facing a dilemma.In order to continue to expand sales of the company under the premise of controlling credit sales risks,company Z should focus on improving its credit sales risk identification system,controlling the adverse effects of existing credit sales risks,improving corporate credit sales management systems,and rationalizing companies' credit sales strategy,as well as the promotion of the construction of enterprise credit system for construction machinery industry.The sixth chapter is the conclusion of the full article.