credit management is the core of accounts receivable
in the process of development and growth, logistics enterprises tend to take accounts receivable as a marketing means to relax the management of accounts receivable while pursuing expansion. In this way, the sharp increase in accounts receivable, capital chain will have the risk of fracture. As a result, some logistics companies began to segment customers, formulate different accounts receivable policies for different customers, and form their own set of credit management system.
first of all, logistics enterprises should determine a reasonable credit standard. The credit rating of customers is usually based on “5C” evaluation method（ “5C” it refers to the customer's conduct, ability, capital, collateral value and other conditions). For the customers who meet the standard, we can adopt the preferential account receivable conditions, and for the customers who do not meet the requirements, especially for the business with large amount, we can reduce the credit sales. In this way, the limited funds can be used to ensure the maintenance of high-quality customers and reduce the risk of bad debts.
adopt reasonable credit terms, mainly including credit term and cash discount. The term of credit is the payment term stipulated by the enterprise for customers. Cash discount refers to the price preference given by logistics enterprises to customers by paying in advance. Although cash discount reduces the income of enterprises, it can reduce the average collection period of accounts receivable.
establish an appropriate credit line. Credit line is the maximum credit line given by logistics enterprises to customers according to their repayment ability. Any customer has its solvency limit, once beyond the limit, it will greatly increase the probability of bad debts, so it is actually the maximum amount of risk that the enterprise is willing to bear for a customer. Determining the appropriate credit line can effectively guarantee the sales volume and prevent the enterprise from suffering great losses due to excessive credit sales and exceeding the customer's actual ability to pay.
in a word, when enterprises formulate credit policies, they should make careful comparative analysis and choose a better scheme. That is to say, we should ensure that the increased revenue is greater than the increased cost of accounts receivable, and we should not blindly relax the credit policy in order to expand sales. On the contrary, we should not try our best to improve the credit standard in order to reduce the accounts receivable. “ if you don't sell on credit, you'd better not seek death. ” Soros has a famous saying: “ you can't call it a career without risks, but it's important to know where there are risks and leave a way for yourself. ” business operators need to do a good job in cost analysis of risks, and formulate specific measures to prevent, control and manage risks, so as to achieve the purpose of reducing risks, improving business management and improving enterprise benefits.