The Implement of Enterprise AMC for Credit Management
|School||Shanghai Jiaotong University|
|Keywords||credit management crediting policy accounts receivable|
In essence, modern market economy is considered as credit economy, credit management is a key area of modern business operation and management. Major defects in current internal operation and management, especially lack of credit management, are the fundamental reason why company payment default has not been put under effective control. Internal management mechanism must be reformed and separate credit risk management must be set up.At present, credit risk control and accounts receivable management are the keys to the success of the business in China. Slow-down of business operation and payment defaults have become the major barriers to the development of the business. Due to credit crisis, many business faced difficulties in both sales and payment. To solve these problems, companies should not wait for the improvement of external credit environment, but to improve their own capability to guard against credit risk, which, most importantly, requires the increase of the capabilities to control customer credit risk and payment default risk.In the operation and management of the business, credit management is cross-disciplinary and comprehensive. It involves planning, purchasing, producing, marketing, accounting, etc. The improvement of credit risk management can lead to the improvement of management at all levels and the improvement of overall management. Poor credit management in some of the companies in China is not only reflected in poor management in sales, accounting and credit, but also in the fragmentation and contradiction among different departments and lack of coordination and overall plan which will not help the business in modern market competition.Credit management mainly includes setting up credit management department, customer credit management system and internal authorization and improving accounts receivable management system.With China’s accession the WTO, credit management is surely the basis for the success of the business to survive and develop in a more open and more competitive market. All that the company should do is to reform the outdated management system and launch credit management system.