Research On Risk Prevention And Control Of Factoring Business From The Perspective Of Supply Chain Finance

In recent years,with the continuous development of social economy,large and medium-sized enterprises such as state-owned enterprises have gradually diversified their business and expanded their scale,which has put forward higher requirements on the operation of enterprise capital and the efficiency of resource allocation.In order to improve the efficiency of capital operation in the upstream and downstream of the supply chain of enterprises,some enterprises have set up functional departments of factoring business internally to provide more efficient financial support for enterprise operation.However,due to the short business period of the newly established departments,the risk prevention and control mechanism have not been established or are not perfect,and some enterprises have hidden risks.Therefore,it is crucial to explore the establishment of risk prevention and control system.As a relatively short established state-owned enterprise,the main functions of W are project development and construction,investment and financing,and commercial trading.Being a good credit state-owned enterprise,W has always been the core enterprise of the supply chain it is in.In 2019,W established a factoring subsidiary to serve the capital financing needs of various business segments within the enterprise,while actively exploring the development of supply chain finance.Although the factoring business has not been in operation for a long time,the amount of accounts receivable and factoring business has grown very rapidly.This has placed high demands on the efficiency of supply chain capital operations,but the factoring subsidiary has not yet established a complete and effective risk prevention and control system,and the risk prevention and control measures cannot match the speed of business development,and there are significant risk hazards,especially when some of the businesses are at risk of repayment,which has a negative impact on the development of the enterprise.Therefore,it is imperative to establish a risk prevention and control system.This paper adopts a case study approach and takes the unique perspective of a core supply chain finance enterprise.By collecting first-hand data from the enterprise’s grassroots practitioners and local supply chain finance association experts,it identifies the main risk indicators faced by W,statistically analyses and quantifies them,and concludes that W should build a risk prevention and control system from three aspects: solvency risk,credit risk and operational risk,and proposes a targeted construction plan for the risk control system and specifies specific preventive measures.Finally,from the perspective of W’s future development of supply chain finance,it is recommended that it continue to improve the prevention of credit risk in factoring,strengthen the control of operational risk in factoring and attach great importance to the prevention of legal risk in factoring.The case study of W can help similar enterprises to set up reasonable departmental functions at the initial stage of factoring business,identify risks as early as possible,formulate timely risk prevention and control plans,strengthen the overall control of the enterprise and ensure the safety of supply chain capital activities,which has certain reference value and significance to the sound development of enterprises and the industry.