D Construction Company Receivables Risk Management Research

At present,China’s economy is in a hard period of transforming the development mode,optimizing the economic structure and transforming the growth momentum.In this transformation process,real estate enterprises,which once flourished for decades,have been greatly affected to varying degrees,repeatedly defaulting on their debts and spreading the risk to downstream industries.For the construction industry,in order to seize the competitive market share,the phenomenon of advance construction has become more significant.This is accompanied by high accounts receivable,a complex and volatile credit environment and constant bad debt loss accrual for construction companies.The risk of accounts receivable has not only become an important factor restricting the high-quality development of construction enterprises,but also put them to a severe test of life and death due to poor capital turnover.Therefore,strengthening the risk management of accounts receivable in construction enterprises has become an extremely urgent and important task.Based on the theories of accounts receivable management and risk management,this paper investigates the accounts receivable management of Chongqing D Construction Company Limited(hereinafter referred to as "D Construction Company").Specifically,by using the risk structure decomposition method,Delphi method and literature review method,we identified eleven major risk factors and 24 risk points in the pre,middle and post accounts receivable management of D Construction Company.Subsequently,the key cruxes limiting accounts receivable risk management of D Construction Company were measured by hierarchical analysis and fuzzy comprehensive evaluation method,including poor departmental synergy,poor credit management and passive contract management in the early stage,sloppy project implementation,more settlement disputes and poor continuous customer credit tracking in the middle stage,and lagging prosecution preparation and poor disposal of overdue accounts in the late stage.Finally,for the risk factors with the highest evaluation value and weight,three major types of countermeasures are proposed for D Construction Company,including establishing sound credit mechanism,standardizing project process control and making efforts to strengthen overdue payment disposal,and its 10 specific processes,as well as three safeguard measures.Previous studies on accounts receivable management of construction companies were basically in the high boom period of construction and real estate industries,and their risk management was mostly qualitative research.In contrast,this paper is a research carried out after the successive thunderstorms of domestic real estate enterprises in 2021.Through the use of risk management tools,the main risk factors of current accounts receivable are identified by combining qualitative and quantitative approaches,and new initiatives for controlling accounts receivable under the new situation are formulated in a targeted manner.Through the research of this paper,we hope to help D Construction Company to control risks more effectively in its daily operation,to play a reference role in the management of accounts receivable risk in the new era of construction enterprises,and to provide some forward-looking value to the current research on the development direction of the construction industry.