Shenzhen JIT Technology: Accounts Receivable Management Issues
(6 pages of text)
In March 2012, the president of Shenzhen JIT Technology Co., Ltd., a small electronics manufacturing company in Shenzhen, China, was facing a problem with the company’s uncollected accounts receivables (AR). The company had a high level of AR, and the time it was taking to settle these accounts was much longer than the industry average, which had led to financial difficulties. The company had formalized its sales commission structure to include a system of rewards and penalties related to the collection of outstanding AR payments, but these new rules had not solved the AR problem. The president needed answers: What was the main reason for the company’s high AR and receivable turnover? What was wrong with its AR policy? What specific approach for quantity management of AR would resolve these issues?
This case is appropriate for undergraduate and graduate courses in credit management and accounts receivable. It is intended to enhance students’ in-depth understanding and application of the theories of accounts receivable management. After working through the case and assignment questions, students will be able to do the following:
- Understand the theoretical foundation of accounts receivable management.
- Grasp the various approaches to accounts receivable management.
- Understand the various risks of accounts receivable and appropriate response measures.
Information, Media & Telecommunications
China, Medium, 2012
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