Research On The Management Of SonoScape's Accounts Receivable

With the economic development in our country entering a new normal and the rate of economic growth slowing,the competition among enterprises turned to be more intensified.Many enterprises loosen their credit standards in order to ensure profits growth and expand market share which lead to the rapid growth of accounts receivable's scale.Under these circumstances,lacking of control over receivables will result in a surge in bad debts of enterprises.At the same time,a large amount of receivables will also occupy corporate funds,affecting the operation ability and solvency of enterprises.Companies will even going bankrupt due to improper management of accounts receivable which seriously hindered the healthy and sustainable development of enterprises.Therefore,companies should establish an effective management system of accounts receivable and constantly improve the internal control system,control the risk of corporate accounts receivable is more conducive to the long-term development of enterprises.SonoScape has been engaged in the production and selling of medical devices for years.For the special sales mode of medical industry,a large number of medical products are sold by distribution,which explained dealers' great voice on it.In recent years,SonoScape has raised the proportion of sale on credit continuously for the sake of increased market shares.After analyzing SonoScape's accounts receivable,we found that there are so many problems on its management of accounts receivable,such as fast growth,increase of accounts receivable in the middle and long term,low turnover rate,large proportion of overseas accounts receivable and low profit quality.Further analysis pointed out that it included amounts of accounts receivable management problems:weak credit management,lack of financial analysis and scientific index system in dealer's investigation.The reconciliation management is not timely,the sales record is not standardized,free of income recognition and nonstandard sales order management,receivables management.The sales incentive mechanism is unreasonable,sameness accounts receivable measures,untimely after sale service,poor measures to avoid overseas sales risk,weak internal supervision and the shortage of internal audit department staff.This article embarks from the reality,combined with the characteristics of SonoScape,aiming to deal with the problems with the theory of credit management,risk management,accounts receivable financing and sales and payment cycle of the internal control.The suggestions refers to the full implementation of credit management,setting rules for accounts receivable records process,improving the recovery of accounts receivable system,strengthening internal audit supervision,which can improve the enterprise receivables management level.This paper combined SonoScape's sales characteristics with accounts receivable management theory and the theory of sales and collection cycle internal control,then,put forward some suggestions in order to improve the management and the quality of accounts receivable.A series of research on SonoScape's accounts receivable can also provide a good reference for enterprises in the same industry or similar sales model.