Poor accounts receivable management at Qui Long Refrigeration Electrical Engineering Technology Company LTD

Abstract

Qui Long Refrigeration Electrical Engineering Technology Company Limited operates in the field of design and construction for projects across the country, specializing in providing solutions and building clean rooms in the medical and pharmaceutical areas. Through this study, the author finds two initial symptoms: low net profit margin and decreased receivables turnover ratio. Two problems are raised from interviews and data analysis: poor supplier management and poor receivables management. After validation, poor receivables management is the main problem of this project. Further research discovers three causes of this problem: poor assessment of the client's financial health, ineffective receivables management system, and weak receivables management process. And then the main cause of the problem is poor receivables management. After that, two alternatives are given to solve the cause and select one appropriate solution for the company's situation. Finally, an action plan is developed according to the chosen solution. During the implementation of this project, primary and secondary data from observations, interviews, literature, and reports are collected to support the research results.