How to reduce the cost of enterprise credit, in addition to interest rate cuts there are other effective measures

There is also an increase in the turnover rate of enterprise liquidity, the turnover rate of assets.

The capital turnover ratio is an indicator that reflects the speed of capital turnover.

Enterprise funds (including fixed funds and working capital) in the process of production and operation of uninterrupted circulation turnover, so that the enterprise to obtain sales revenue. Enterprises with the least possible use of funds, to obtain as much sales revenue, that the speed of capital turnover, capital utilization is good.

The speed of capital turnover can be expressed in terms of the number of capital turnover in a certain period of time, can also be expressed in terms of the number of days required for a capital turnover. The formula is as follows:

For example, the enterprise's total sales revenue of 40 million yuan a year, the average annual occupancy of fixed assets (original value) and working capital totaling 20 million yuan, that is, the turnover of 2 times a year, each turnover requires 180 days. Accelerate capital turnover, can save money. In a certain scale of production and sales revenue, the capital turnover rate doubled, you can save half of the funds. The capital turnover rate can also be used fixed capital turnover rate and capital turnover liquidity turnover rate are reflected.

Its turnover or the number of days is still calculated using the above formula, but the average occupancy of funds should be changed to fixed assets (original value) or the average occupancy of working capital. Fixed capital turnover rate reflects the turnover rate of fixed funds. From the fixed capital turnover form, it has its own characteristics, that is: a relatively long period of time to preserve its physical form, its value is only with the degree of wear and tear gradually transferred to the value of the product, and at the same time to depreciation in the form of recovery of the corresponding monetary funds until its value have been transferred to the value of the product, the recovery of monetary funds for the renewal of fixed assets, only to complete the cycle of its turnover. Therefore, from the point of view of individual fixed assets, its capital turnover rate is its life cycle. Liquidity turnover rate, reflecting the speed of liquidity turnover. In the case of normal production and operation, the faster the rate of capital turnover, the better the utilization of funds.

Types of asset turnover:

Asset turnover can be divided into total asset turnover, classified asset turnover (current asset turnover and fixed asset turnover) and individual asset turnover (accounts receivable turnover and inventory turnover, etc.) three categories.

The purpose of measuring and analyzing the efficiency of asset utilization varies among the users of different statements:

1. Shareholders can help to judge the financial security of the enterprise and the earning capacity of the assets through the analysis of the efficiency of asset utilization in order to make the corresponding investment decisions.

2. Creditors, through the analysis of the efficiency of asset utilization, can help to judge the degree of material security of their claims or their security, so as to make the corresponding credit decisions.

3, managers through the analysis of asset utilization efficiency, can find idle assets and underutilization of assets, so as to dispose of idle assets to save money, or improve the efficiency of asset utilization in order to improve business performance.

Measurement indicators of asset utilization efficiency

(a) Total asset turnover

Total asset turnover refers to the ratio of an enterprise's income from main business to its total assets for a certain period of time, which indicates the number of times that an enterprise's total assets have been turned over within a certain period of time (usually one year). The formula is as follows:

Total assets turnover = income from main business/average balance of total assets

Where: average balance of total assets = (total assets at the beginning of the period + total assets at the end of the period)/2

Total assets turnover can also be used to express the number of days of the turnover, which is calculated as follows:

Total assets turnover days = number of days of the calculation period/total assets turnover rate

The level of total asset turnover depends on two factors: main business income and assets. Increasing revenue or decreasing assets can increase the total asset turnover.

(B) Classification of asset turnover

1, current asset turnover

Current asset turnover refers to a certain period of the enterprise's income from main business and the average balance of the current assets of the ratio, that is, the enterprise's current assets in a certain period of time (usually one year) turnover times. Current asset turnover is an indicator reflecting the efficiency of the use of current assets. The formula is as follows:

Current assets turnover = income from main business / average balance of current assets

Where: average balance of current assets = (opening current assets + closing current assets)/2

Current assets turnover days = days in the calculation period / current assets turnover

Current assets turnover indicators not only reflect the use of current assets, but also affect the business efficiency, but also affects the profitability of the enterprise. The faster the turnover rate of current assets, the more turnover times, indicating that the enterprise with the same current assets occupied by the realization of the more income from main business, indicating that the efficiency of the use of current assets is better, and thus the enterprise's solvency and profitability can be enhanced. On the contrary, it indicates that the ability of the enterprise to utilize current assets for business activities is poor and less efficient.

2, fixed asset turnover

Fixed asset turnover refers to a certain period of the enterprise's income from main business and the ratio of the average net value of fixed assets. It is to reflect the enterprise's fixed asset turnover, measure the efficiency of fixed asset utilization indicators. The formula is:

Fixed asset turnover = income from main business / average balance of fixed assets

Which: the average balance of fixed assets = (the beginning of the fixed asset balance + fixed asset balance at the end of the period) / 2

Fixed asset turnover days = 360 / fixed asset turnover

The higher the turnover of fixed assets, indicating that the fixed assets of the enterprise The higher the fixed asset turnover rate, indicating that the fuller the utilization of fixed assets, indicating that the enterprise fixed asset investment is appropriate, the fixed asset structure is reasonably distributed, can more fully play the efficiency of the use of fixed assets, the more effective the enterprise's business activities; on the contrary, it indicates that the use of fixed assets is inefficient, to provide the results of production and operation is not much, the enterprise's fixed asset operating capacity is poor.

3, long-term investment turnover rate

The relationship between the amount of long-term investment and the main business income is not necessarily obvious, so rarely calculate the turnover rate of long-term investment.

Long-term investment turnover = income from main business / average balance of long-term investment

Long-term investment turnover days = 360 / long-term investment turnover

(3) Turnover of individual assets

The turnover of individual assets refers to the turnover rate of assets calculated separately according to the items on the left side of the balance sheet. The most important and commonly used of these are the accounts receivable turnover ratio and the inventory turnover ratio.

1, accounts receivable turnover

Accounts receivable turnover is the ratio of the enterprise's income from main business and the average balance of accounts receivable for a certain period of time, which means the number of times that the enterprise's accounts receivable are turned over in a certain period of time (usually one year). Accounts receivable turnover ratio is an indicator to reflect the efficiency of the enterprise's accounts receivable utilization. Its calculation formula is as follows:

Accounts receivable turnover (times)

Accounts receivable turnover (times)

Where: average balance of accounts receivable = (accounts receivable at the beginning of the period + accounts receivable at the end of the period)/2

Accounts receivable turnover days = days in the calculation period / accounts receivable turnover (times)

or = (average balance of accounts receivable x Days of calculation period)/Main business income

The higher the accounts receivable turnover rate of an enterprise within a certain period and the higher the number of turnover times indicate that the faster the recovery of accounts receivable, the higher the management efficiency of the enterprise's accounts receivable, the higher the liquidity of the assets, and the stronger the short-term debt repayment ability. At the same time, a higher turnover rate of accounts receivable can effectively reduce collection costs and bad debt losses, thus relatively increasing the earning capacity of the enterprise's current assets.

Further analysis of the accounts receivable turnover rate also needs to pay attention to the following issues:

(1) The reasons affecting the decline of the accounts receivable turnover rate are mainly the credit policy of the enterprise, deliberate delays of the customers and financial difficulties of the customers.

(2) Accounts receivable is a point-in-time indicator, which is easily affected by seasonality, chance and human factors. In order to make this indicator as close to the actual value as possible, the average should be calculated using as much detailed information as possible.

(3) An excessively fast accounts receivable turnover rate may be caused by a tight credit policy, the result of which may jeopardize the sales growth of the enterprise and damage its market share.

2. Inventory turnover

Inventory turnover is calculated in two ways. One is the cost-based inventory turnover ratio, mainly for liquidity analysis. The second is the inventory turnover ratio based on revenue, mainly used for profitability analysis. The formulas are as follows:

Cost-based inventory turnover = cost of doing business/average net inventory

Revenue-based inventory turnover = revenue from doing business/average net inventory

Average net inventory = (opening net inventory + closing net inventory)/2

Inventory turnover days = days in the computation period/inventory turnover ratio

Inventory turnover ratio based on cost, can be more realistic performance of inventory turnover; and revenue-based inventory turnover ratio not only maintains the consistency of the calculation of the indicators of the ratio of the efficiency of the use of assets, and thus the calculation of inventory turnover days and accounts receivable turnover days on the same basis, so that it can be directly added up and get the business cycle.

In the calculation and analysis of inventory turnover indicators, should also pay attention to the following issues:

(1) statement users in the analysis of inventory turnover indicators, should be as much as possible, combined with the batch factor, seasonal changes in inventory factors and other factors to understand the indicators, and at the same time on the structure of the inventory and the impact of the inventory turnover rate of the important indicators to analyze the raw materials through further calculation of the turnover rate, the product turnover rate, or the product turnover rate. By further calculating the turnover rate of raw materials, the turnover rate of products or a certain inventory turnover rate, from different perspectives, links to identify problems in inventory management, in order to meet the needs of production and operation of the enterprise at the same time, as far as possible to reduce the operation of the occupied funds, improve the level of enterprise inventory management.

(2) Inventory turnover is too fast, there is a possibility that the further development of production or sales operations will be affected by the lack of inventory reserves, especially those in tighter supply.

Calculation method Working capital turnover ratio is the ratio of annual net sales to working capital, reflecting the number of times working capital is turned over in a year. The formula is as follows:

Net sales revenue/(average current assets - average current liabilities)

"Average" means the average of the beginning of the statement period and the end of the statement period.

The speed of capital turnover can be expressed in terms of the number of times the funds are turned over in a certain period of time, or in terms of the number of days it takes for the funds to turn over once. The formula is as follows:

Capital turnover = the current period of income from main business / [(the beginning of the period occupied funds + funds occupied at the end of the period) / 2]

There is no universal standard for measuring working capital turnover, only the historical level of this indicator with the enterprise, other enterprises or the average level of the same industry to have a meaningful comparison. However, it can be said that if the working capital turnover ratio is too low, it indicates that the working capital utilization rate is too low, i.e., relative to the working capital, sales are insufficient, and there is potential to be tapped; if the working capital turnover ratio is too high, it indicates that there is insufficient capital, and the business is in the midst of a crisis of debt repayment.

How to improve capital turnover?

The capital turnover rate is affected by two dynamic variables, namely capital flow and logistics. Capital flow and logistics are pretty much the management core of a modern dealer organization. Only by starting with management can we truly achieve an increase in the rate of capital turnover. Now the workflow of the dealer organization as the main line, zoom in on each local process management on the capital turnover rate of the impact of the characteristics of the dealer organization, so as to inspire the dealer organization to find ways to improve the rate of capital turnover.

One, the development of the goods plan

Many distributor organizations in the development of the goods plan does not have a detailed workflow, control procedures are quite arbitrary. Some by the warehouse manager to do, some by the salesman to do, but also to let the financial personnel to do, these are in fact inappropriate behavior. Warehouse personnel will consider their existing storage capacity and work intensity, little consideration for the market and financial; salesman mainly from the market point of view, the more the goods is the better; finance is the last period or the same period of data as a reference, timeliness and market feel poor.

Reasonable practice is recommended: the business is responsible for making a next cycle (select weekly, ten days, monthly, quarterly, etc. for the unit can be) the number of market demand for goods and the frequency of important customer demand for goods, combined with the existing inventory by the warehouse manager of the existing stock of some of the products to be adjusted to adjust the amount of goods, and then by the financial data based on the last period or the same period of the last year, as well as the actual state of financial funds to amend the last dealers to organize the responsible person Finally, the person in charge of the distributor's organization will consider the whole situation and approve it. (Special reminder: to be goods must pay attention to the allocation of non-normal goods, sometimes in order to match the supplier's economic transportation unit volume, arbitrarily increase some of the unplanned non-normal goods. In fact, this distribution of loads finally become backlog inventory, return are a problem.)

More goods are easy to take up working capital, reduce the efficiency of capital turnover; less goods may be out of stock by the end-customer lock code and economic penalties, the loss outweighs the gain. Want to plan to do a bad job, the capital turnover rate increase can only be fantasy.

Two, distribution management

In the traditional dealers, distribution is an extremely simple work, not at all count as a management project. This is a misunderstanding of the understanding of the distribution management is good, will directly affect the efficiency of logistics, thus affecting the capital turnover rate.

The order means the opportunity to trade, but if you miss the order delivery time, it will cut off the opportunity to trade, but also on the customer relationship has a negative impact.

Distribution management is not complicated, yet it is the lack of attention that leads to inefficiency and even disruption in distribution that occurs frequently in distributor organizations.

Take an example: a dealer in a customer's order placement period is every Tuesday, Thursday, the next day delivery. If the order is delayed once on Thursday, even without penalty, the order has to be re-ordered on the following Tuesday and delivered on the following Wednesday. During this period there is a four-day sales delay on Saturday, Sunday and the following Monday and Tuesday. The theoretical inventory period for this batch of products is then increased by four days, and in practice it must be greater than four days. If it happens to be after the checkout period, this batch of products to be moved to next month's settlement, it is even more reduce the rate of capital turnover.

Three, account management

Retail customers will only be extended every year to shorten the account period is unlikely to seek a workaround from the account period to improve the speed of capital turnaround feasibility is not high. Some retailers allow early settlement, but the dealer's interest costs are high, unless the urgent need for capital turnover can not take into account the increase in financial costs.

We are here to manage the billing period mainly in the actual closing period and the contractual billing period is in the normal deviation zone. For example, the contract period of 45 days, the terminal reconciliation period coincides with the October 1 holiday, so the dealer to the terminal to issue a tax invoice period from the terminal check the actual invoice period of 50 days. The 5-day deviation in this interval is acceptable, and if this interval is greater than 5 days there is a problem.

A dealer in the author's financial last year under the prompting of a year of a store out of the accounting period for a summary analysis, found that the average settlement period of 82 days (statutory holidays have not been avoided), and the contract signed with the store accounting period of 60 days.

Booking period management can not just stay in the contract negotiation, but also to put the center of gravity in the implementation. Try to avoid giving retailer customers reasons to delay payment, so that their side is always in the active state.

Four, social inventory control

There is a dealer boss said helplessly, he is very rich, but the money is in the goods. He said here that the goods is what we often call social inventory, that is, in the downstream customers where the products sold on credit.

Do terminal dealers understand a truth: without a certain social inventory, there is no display effect, and can not increase sales opportunities. But too high a social inventory is a black hole in the rate of return of funds, how to do a good job of social inventory control has become particularly important.

Only the right inventory, no reasonable inventory. Doing business is different from theoretical conception, and what is reasonable is often out of context.

For example, to do two terminals, store A 300 square meters, store B 1000 square meters, from the display space, store B shelf inventory should be greater than store A to be reasonable. However, A store only do two brands in this category, B store has seven brands, the two brands in the A store to do slightly higher than the sales of these two brands in the B store. From a dealer business perspective, social inventory is more valuable to store A than to store B.

Distributors are different from powerful manufacturers, can not blindly pursue the so-called numerical spread rate, not to focus on the so-called total opportunity (that is equivalent to the air, the potential is there, but the cost of competition is greater).

Fifth, the implementation of promotions

The faster you sell the higher the turnover rate, which is the obvious law. Promotion of the effect of many standards, but as a dealer organization, sales out of how much is the hard way.

1. The root of the promotion is to promote sales, help dealers create more premium income. Dealers the most normal trading behavior is the behavior of markups, although now more and more difficult to generate profits through markups, but this is the essence of distribution. The normal result is that the more appropriate the promotion, the greater the sales and the higher the rate of capital turnover.

2. Promotions can maintain the dealer's control over downstream customers. With today's advanced business distribution, channel customers can easily buy almost any product, but they can't get promotional support, which is a natural advantage for distributors. Having loyal and stable downstream customers will invariably help dealers improve capital efficiency.

3. Promotion is one of the few powers that dealers have to take the initiative. There is not a downstream customers are not interested in promotions, if the promotional efforts beyond the norm, even the "temperament" of the retail store purchases will become friendly and easy to deal with. There is also more room for maneuver in terms of period management. In spite of the billing period requirement, if there is a big discount promotion, it is also very possible to do cash transaction with the retailer.

But there are many people in the dealer community who treat factory promotions as donkey meat and keep them for themselves. Some people will be the promotion as a source of profit, a hard to apply to the upstream factory promotional costs or misrepresentation of costs. This practice of putting the cart before the horse is ultimately detrimental and not beneficial to oneself.

The author suggests that dealers friends: promotional inputs can not save a penny, promotional resources a penny can not be greedy, good steel have to be used on the knife edge.

Six, residual inventory processing

Residual inventory in each dealer, there are commercial after this problem, can be said to be a persistent problem. Since it is unavoidable, it should be actively and properly handled.

Stagnant inventory is not an asset, but a liability. The author suggests that distributor organizations should always pay attention to the generation and handling of residual inventory and not accumulate it in an attempt to one day be able to discount it to upstream suppliers at its original price. If the residual inventory has to deal with upstream suppliers, it would be better to deal with the realization of the earlier, even if it is really "ten improper one point to sell".

Seven, customer management

Each customer will not have the same requirements for the return of funds, the dealer should be given to each customer to assess the rate of return of funds. The higher the rate of return of customers to maintain a certain level above the line, follow the "cash is king" business philosophy. Timely elimination of some of the settlement reputation of poor customers, not every customer is worth dealing with.

Excessive requirements for customers to spread the rate will significantly reduce the rate of capital turnover, this result has been verified countless times.

Eight, item management

Item management is not a foreign concept, for the trade-oriented dealers, item management is imperative.

Distributor item management includes the following:

1. Brand focus: a dealer often operates several brands, each brand's return on investment and the rate of return of funds are different.

2. Category division: according to the local market consumption level and consumption structure division, to ensure the effectiveness of capital investment. Not every manufacturer can do a good job of all the categories in hand, so dealers should pay more attention to their own regional characteristics.

3. Small item adjustment: turnover rate and gross margin to the opposite direction, dealers must weigh the choice of profit and turnover rate focus.

4. Seasonal products: Seasonal products are not balanced in terms of capital requirements, dealers should plan for seasonal products and the use of funds for regular products, both to focus on seasonal products and to prevent excessive occupation of funds for regular products.

5. Unless the products, goods and commodities are being sold hot, it is necessary to control the amount of goods in each batch.