At the end of each year, many companies worry about collection, and the difficulty of collection has become the common voice of many companies. Companies in the LED display industry also face such problems.

　　 The LED display industry, like most manufacturing industries, has some potential billing rules. In the industry, for some companies with a certain bargaining power and a certain reputation, LED display companies will give a certain billing period. This billing period can be as little as one or two months, or as long as six months. The existence of the billing period is helpful to support some growth companies and some companies that have certain financial pressures.

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　　 On the other hand, the LED display industry started in a rash, and many companies started out thanks to credit owed to suppliers. LED displays are products with engineering attributes, unlike other consumer products that require a one-time payment in full. A certain amount of money needs to be prepaid in advance for a project, and the rest is paid according to the progress of the project. *Approximately 5%-10% of the account will be paid as the customer’s warranty within the agreed time. Some companies in the LED display industry are able to conduct business operations and production by relying on the existence of accounts receivable and relying on certain personal resources to credit their suppliers and raw material vendors, seeking their continuous development and growth.

　　 The existence of accounts receivable in the LED display industry comes from the industry’s triangle debt.

In recent years, the LED display industry has overcapacity, fierce market competition, and intensified price wars. In order to expand the market share and "win customers", many companies provide "accounting" methods to stimulate customers to purchase the company's products. The amount and period of time. The "lending" strategy adopted by LED display companies has an immediate effect, but it also lays a safety hazard for the future development of the company.

The "lending" implemented by LED display companies may even owe as long as six months or longer. In this way, if the capital turnover of the company is not smooth, it is equivalent to handing over the company’s "life and death" capital chain. In the hands of customers, in this way, once something goes wrong in a certain link in the middle, it may cause the company's capital chain to break, and in serious cases, the company will go bankrupt. In the LED display industry, it is often seen that customers default on the payment of display manufacturers, display manufacturers default on the payment of suppliers, and suppliers owe the payment of upstream chips and other auxiliary materials factories. The original normal industrial chain of the LED display industry has also evolved into a risky debt chain. There is a financial crisis in a certain part of the LED display industry, and the accounting period cannot be delivered in time, and related companies will also be affected. If other connected companies are not strong in resisting risks, they will face the risk of bankruptcy.

　　 The existence of accounts receivable has increased the probability of bad debts for companies in the LED display industry. In the process of credit sales, due to the lack of effective risk management in some companies, incomplete internal control mechanisms, and insufficient understanding of customers' credit, it is easy for the accounts receivable to become uncollectible and directly become bad debts.

　　 The existence of accounts receivable has a certain impact on the business cycle of LED display companies. The existence of unreasonable accounts receivable will affect the company's capital circulation, causing a large amount of working capital to settle in non-production links, resulting in a shortage of corporate funds, and in serious cases, it will affect the normal production and operation of the company.

　　The existence of accounts receivable also reduces the efficiency of capital use of LED display companies. Credit sales did not really increase the company’s cash inflows. Instead, companies had to use limited liquid funds to advance various taxes and expenses, which accelerated the company’s cash outflow, resulting in tighter corporate funds and poor capital turnover, which affected the company’s operations. Normal production and operation work.

　　 The management of the accounts receivable of LED display companies plays an important role in the survival and development of the company. The recent news that Huaying Technology’s 3.1 billion accounts receivable could not be recovered, and the news that Huaying Technology’s sudden "thunder explosion" also illustrates this point again, which will once again sound the alarm for enterprises in the LED display industry.

　　As a stable LED display company, it will reduce the adverse impact of accounts receivable on its own company.

　　 First of all, companies in the LED display industry must control the company’s external accounting behavior. Unfavorable corporate collections will cause normal liquidity to be squeezed out by a large amount of accounts receivable. If there are no strong collection measures, the bad debt ratio of enterprises will rise sharply, which will not be conducive to the normal production and operation of enterprises.

Secondly, the LED display should establish and improve the risk early warning mechanism of accounts receivable. When accounts receivable endanger the business management of the company, the company must take care of the transfer risk of accounts receivable and solve the problem of uncollected accounts receivable. The problem of shortage of funds.

　　Finally, when LED display companies sell products on credit to customers, they must conduct certain credit evaluations on customers, and strictly control the release of accounts to companies with bad reputation.

　　 Based on the risks of accounts receivable, more and more companies in the industry are reluctant to release their accounts, preferring to have less performance and choosing a cash settlement method.