Risk Prevention Problems And Countermeasures Of LH Factoring Company's Account Receivable Factoring Business

With the deepening of China's reform and opening and the vigorous development of the economy,the increasingly open trade environment has promoted the rapid development of small and medium-sized enterprises(SMEs)in China.In recent years,SMEs have contributed more and more to GDP and make outstanding contributions to China's economic development and social progress.However,SMEs have the characteristics of small size,low transparency of financial situation and poor credit level,which leads to the problems of financing difficulty and high financing cost in SMEs.At the same time,with the increasing competition among enterprises,the core enterprises in each industrial chain usually use credit settlement to occupy the liquidity of upstream suppliers as much as possible to delay the settlement time node for their own economic interests.As a result,the buyer come to have leadership positions in the market of commodities and credit sale has become one of major payment methods in various industrial chains.At present,the average proportion of credit sales in the European and American markets has reached more than 80%,and some countries have even reached 90%.Although the average credit sales ratio of Chinese enterprises is much lower than that of European and American markets,accounting for only about 20%,this proportion is also increasing year by year,which makes the scale of accounts receivable of Chinese enterprises has become larger and larger.At the same time,the average day of receivables in Chinese enterprises is 180 days,which reflects that the long recovery cycle of receivables has a serious impact on the capital chain of enterprises This undoubtedly increases the cost of small and medium-sized enterprises in the process of development and operation,and has a negative impact on the normal development of enterprises.Therefore,the commercial factoring industry came into being.Different from the traditional credit business,commercial factoring is based on the transfer of accounts receivable from suppliers,emphasizing the controllability and authenticity of trade,which can effectively solve the problem of small and medium-sized enterprises occupying liquidity.Therefore,commercial factoring has been recognized by the market and developed rapidly since the liberalization of industry control in China.As an effective supplement to bank factoring,commercial factoring not only provides financing facilities for the development of SMEs in China,but also plays a important role in the development of China's economic.while,although our commercial factoring industry has made considerable progress in recent years,there is a big gap between China and western developed countries in the level of development.And there are still many problems in the risk prevention system,facing many risks.In order to develop steadily and occupy an advantageous position in the fierce market competition environment,China's commercial factoring companies need to learn from the industry prevention system and successful experience of western developed countries and combine the characteristics of China's commercial market,through improving their risk prevention system to enhance risk prevention ability and competitiveness.Therefore,to study the problems existing in the risk prevention measures of representative factoring company and put forward corresponding countermeasures and suggestions helps to improve the risk prevention ability of enterprises in the industry and promote the healthy development of the industry.This paper takes the risk management of LH commercial factoring in accounts receivable factoring as the research object.On the basis of summarizing relevant literature and existing theoretical basis at home and abroad,the main business models of LH factoring company are systematically analyzed and compared from information asymmetry theory and operational risk theory.Through the analysis of LH factoring company's business scope,business process and risk prevention measures,we find that there are many problems in its business operation process,internal control system and personnel risk awareness.Through the analysis of the causes of these problems,this paper puts forward the suggestions that LH factoring company should enhance the ability of business risk prevention from four aspects: optimizing the structure of business market,strengthening the information control of participants,improving the internal control system and team building.This will help to strengthen the risk prevention level of LH factoring company and enhance the comprehensive competitiveness of the industry.