AFinancialSystemDesignedtoControltheSalesActivitiesofQingdaoDelingTradeCo.Ltd.贸易公司销售活动财务控制

A Financial System Designed to Control the Sales Activities of Qingdao Deling Trade Co., Ltd.贸易公司销售活动财务控制论 文 摘 要本文作者就职于山东德盛有限责任会计师事务所（以下简称“本事务所”），主要从事为客户提供财务、税收及审计服务等业务。与本事务所有着长期的业务往来的青岛德琳贸易有限公司（以下简称“德琳公司”），主要从事化工产品销售及相关产品的初加工业务。由于德琳公司规模扩张较快，管理体系建设相对落后，致使公司正面临资金严重短缺困难。鉴于形势紧迫，委托本事务所为其设计一套控制公司销售活动的财务指标体系，以销售控制开始，由点至面地推开全面的管理体制改革。鉴于对该客户经营、财务状况的了解，和已掌握的有关该公司的财务数据，本事务所接受了委托：本文作者被指定为该项目的执行人。由于德琳公司赊销收入增长较快，一方面应收账款增加，另一方面存货和应付账款也相应增加。当供货商提供的商业信用期短于应收账款的回款期时，公司的流动资金出现相对不足。本文立足于财务指标体系的建立，通过该体系的实施，对公司销售活动加以控制、改良公司现有的销售管理体系，以缓解资金短缺矛盾。本论文前期通过财务状况分析及SWOT分析法等研究方法，确定了项目实施的具体目标；中期在财务指标体系设计的过程中，通过项目进度流程表、项目工作日志等形式来检查和保证设计内容得到及时调整和如期完成。后期在财务指标体系的试运行阶段，主要采取财务指标的实际值与目标值的对比来进行评估。经过三个多月的努力工作，本论文设计的财务指标体系得以顺利试运行且取得了积极的效果：一方面，公司财务报表已经呈现出正向的现金流量，意味着资金短缺问题已经得以缓解；另一方通过该制度的实施，财务控制指标及相关财务知识得以在公司销售人员中普及，资金成本意识加强，销售队伍的整体素质提高了，间接促使销售活动健康发展。AbstractThe writer is working in Shandong Desheng Certified Public Accountants Firm (Desheng firm). Its mainly business includes providing finance, tax and auditing services to its clients. Qingdao Deling Trade Co., Ltd.(Deling company) is one of Desheng firms old clients. Its mainly business is selling chemical products to household appliances factories and it is growing fast for the last few years. Deling company authorized Desheng firm to design a finance system to control its sales activities. The writer was assigned to be the executor of the project.Benefiting from selling on credit, Deling Company has grown fast. However, while the Sales increase, the Account Receivable, the Inventories and Account Payable increase accordingly. When the suppliers credit period is shorter than what the company provides to its clients, Deling Company has to face the funds shortage. This paper is focusing on the establishment of a finance control system (the system), through which the sales activities can be controlled and the sales management can be improved so as to ease the funds shortage contradiction.In the paper, Finance Analysis and SWOT Analysis were used to confirm the specific objectives.Project progress chart and project journal are also adapted to monitor the project and ensure its smooth proceeding. During the test period, comparison between true value and target value was an important method to appraise the project.After three months hard working, the finance control system designed in the paper was tested smoothly and the result showed a positive image. The finance statements showed a positive cash flow, that is to say the funds shortage contradiction was eased. A healthier fund circulation begins.TABLE OF CONTENTSA Financial System Designed to Control the Sales Activities of Qingdao Deling Trade Co., Ltd.1. Introduction1.1 BackgroundI work in Shandong Desheng Certified Accountants firm. And my daily work is to accept assignments to provide accounting, financing, auditing, and tax service to my customers. Qingdao Deling Trade Co., Ltd. is one of my customers with cooperation for years. At the beginning of 2007, we were entrusted by the company to design a financial system to control the sales activities. I was appointed to be in charge of organizing and fulfilling this project.Qingdao Deling Trade Co., Ltd. began its business from 2002. Its mainly business is selling adherence tapes. It is now one of the biggest seller s of adherence tape in shangdong and occupied a large industrial-used tape market. 1.2 Problem AnalysisThe company grows fast with its aggressive sales policy during last few years. Low prices, relax accounts collecting periods, promotions and discounts made the company a larger and larger market occupation. However, the financial situation has been worse since 2006. The company sells more, the accounts receivable accumulated more. The market occupation becomes bigger, the inventories is correspondently bigger. A large fund was occupied by the accounts receivable and inventories. However the company can not gain any longer commercial credits form its supplier, whose payment terms are always strict. Now the company is facing serious funds shortage. If there is no enough fund supporting, the business can not be going on. 1.3 Project Aim and Time ScaleI began to prepare the project in July of 2007. The project aims to shift the fund turnover speed via the sales activities controlled by a new designed financial system. Then the objective during the following four months is to launch a new designed financial system based on sales activities. By the end of September, 2007, the final work, designed financial system will be presented to the management of the company. 1.4 Project HypothesisIt is hypothesized that if the new designed system is accepted by the board of directors and performed seriously then the fund turnover will be shifted and the company can step out from the fund shortage difficulty. I planned a series of activities to be carried out during four months to make sure that the hypothesis will come true eventually, including gathering and analyzing market information, meeting and exchanging opinions with the company staff, training courses, and testing, etc. 1.5 Key Methods and BudgetIn the project, I adopted what I learnt from the book “Practical Project Design” (by Gu Yueguo). SWOT analysis was applied when I prepare the project. I devised some measures to control and manage potential risks.When designing the project, I found flowchart and project framework are very useful. The application of these scientific methods gives me a clear picture of the process of the whole project.The output of the project is a new designed financial system, following which the sales activities can be more healthy, the fund turnover speed can be accelerated and company financial situation can be better.The total cost of the project will be 68,200 Yuan, including purchasing print papers and other stationary, staff salaries, expense for information collection, such as taxi fares, paying cell phone bills, etc.2. Summary of the preliminary research2.1 ProblemThe problem is how to ease the conflict between the insufficient circulating fund and the expansion of the inventories and accounts payables and how to accelerate the fund turnover.2.2Problem analysis2.2.1 Current situation of Deling Company2.2.1.1Company profileDeling company was founded in 2003 with Paid-in Capital at RMB1, 000,000 and Total Assets RMB1, 150,000. The company mainly sells various types of industry-used adhering tapes. After 4-year growing, Deling Company has enlarged its Total Assets by RMB2, 000,000 by the end of 2006. Its total Sales are about RMB30, 000,000, six times more than the year of 2003. And now, the company has already become one of the biggest dealers of the Breaker adhering materials. 1）Current financial situation By the end of 2006, the total assets were 20 million yuan, the total liabilities were 11.5 million yuan and the stakeholders equity was 8.5 million yuan. Compared to the level of 2005, the total assets increased by 17.4%, the total liabilities increased by 35.5% and the stakeholders equity decreased by 0.5%. The Sales have enlarged a great deal. By the end of 2006 the total Sales of the company were 30 million yuan, increased by 67% over the 2005 level of 18 million yuan. The finance data show us the company is growing fast but there are threats behind the fast increasing. 2) Current situation of the sales department and its managementa. The Marketing DepartmentThe company set up a Marketing Department when the business began. A Marketing Director runs the department. And the department is divided into four sales teams, each team dealing with several types of adhering material. And each team is headed by a sales manager. There are 4 to 5 sales clerks under each sales manager. Generally, clerks sell goods according to a price list set by the company. When clients ask for a special low price, clerks will report to their manager, via whom the report is finally sent to the Marketing Director. The director will approve the special price only when he thinks the transaction is profitable.b. Sales encouragement policyThe company provides its sales clerks attractive salaries and bonuses. Each sales clerks fundamental salary is 2000 yuan per month. And bonuses are calculated based on a proportion and the sales amount each clerk performed each month. The proportion varied according to the hierarchy of the Marketing Department. (Proportions of each grade: The director 2%, manager 1.5%, senior clerk 1%)The board of directors made a new decision last year that offered a superior position and a car to the people whose performance reached RMB1, 000,000.2.2.1.2 Clients profileThe Sales of 2006 are structured by old clients old projects (45%), old clients new projects (29%) and new clients new projects (26%). In view of long-term cooperation, the company must provide old clients special treatments, e.g. sales on credits, special inventories for special clients. And to defeat competitors and gain new clients, the sale on credit and commercial discounts are also needed.2.2.1.3 Demands of situationTo seek out the demands in detail, we analyzed the finance data as follows:1) Sales and the Cost of salesThe Sales have enlarged a great deal. By the end of 2006 the total Sales of the company were RMB 30,000,000, increased by 67% over the 2005 level of RMB 18,000,000. However the Cost of sales also enlarged even more, at RMB 27,500,000, increased by 73% over the 2005 lever of RMB 15,840,000. The result means a lower Gross Profit Ratio of 2006 by 8.3% than the one of 2005 by12%.2) Accounts receivable and the Accounts receivable turnover ratioBy the end of 2006, the amount of Accounts receivable was RMB6, 600,000. The Accounts receivable turnover ratio was 4.5 times. However, the same ratio of 2005 is 4.7 times. The ratios show us a slight slide in the accounts receivable turnover, but the circulating fund occupied by Accounts receivables increased RMB2, 750,000, by 71%. The increase in Accounts receivables has become headaches of the management. 3)Inventory and the Inventory turnoverBy the end of 2006, the amount of Inventory was RMB3, 900,000. The Inventory turnover ratio was 7.1 times. However the same ratio of 2005 was 7.2 times. Times of inventory turnover fell mildly while the amount of Inventory increased RMB1, 700,000, by 77%. The result means the company must prepare more circulating fund to fulfill the needs of growing Inventories. To sum up, the data and ratios mentioned above show us that the sales are growing fast, which leads to the growth of current assets that occupy more and more money. The pressure of circulating fund shortage is increasing accordingly. The finance situation needs to:1. cut down the amount of sales on credit2. reduce the inventory3. minimize the amount of short-term loans2.3 A SWOT analysis of the situationThe results of Deling Company current situation analysis show that the sales management needs an integrated finance planning and exam system to control its sales activities. Its time to establish a series finance target data and ratios to fulfill the companys demands. To get a further understanding of current situation, I carried out a SWOT analysis and the results are mentioned as follows:2.3.1 Strength1) The whole company will provide a good environment, which will be helpful for the new financing planning and exam system to be carried out. Having 4-year history, the company is still in her growing period. Its her needs to strengthen the administration and to establish a whole controlling system. 2) There is support coming from stakeholders. When more sales bring the company more pressure on circulating funds, the stakeholder is eager to conduct a reform. 3) The company has an excellent accounting system, which can provide more detailed sales data for use.2.3.2 Weakness 1) Most of the sales clerks are totally strangers of finance and accounting. Facing the new system of planning date and exam ratios, they may be confused and dont know how to carry it out.2) Targets of sales clerks are not same as those of the company. When there are conflicts between them, great resistance will rise.2.3.3 Opportunity1) Inside of the company.There are unreasonable items in the current sales encouragement policy, and sales clerks always feel unfair. 2) Outside of the companyLast year the company sold the Breaker adhering materials successfully and become the main supplier of its old clients. It seems that there wont be great competition in a short period. From inside to outside, there seems to be a good opportunity for the company to take action.2.3.4 Threat 1) The sales clerks may feel pressure once new sales planning and exam system begins. When they couldnt reach the targets their bonus will be lessened. And they will think of choosing another company.2) Accompanying with the new sales planning and exam system, the commerce credits and the discounts provided to clients will be limited. Some old clients will seek other suppliers. That means the sales will be affected.3. Project Objective, Hypothesis and Rationale3.1 Project aim and objectives: The project aims to shift the fund turnover speed via the sales activities controlled by a new designed financial system. Then the objective during the following four months is to launch a new designed financial system based on sales activities. By the end of June, 2007, the final work, a designed financial system will be presented to the management of the company.3.2 Project Hypothesis:It is hypothesized that if the new designed system is accepted by the board of directors and performed seriously then the fund turnover will be shifted and the company can step into a better finance situation.3.3 Project Rationale:When the project began, I adopted SWOT analysis theory and other analysis methods that I learned from Practical Project Design ( Gu Yueguo,) to find out what problems Deling Company was facing and what kind of strength, weakness, opportunities and threats the company had. The SWOT analysis gave us a guideline to design the project.Guided by Modern Management Theory (Zhao Shujian), I know “ There is no department which can operate independently within a company. You must think of all the other aspects when you want to change something.”After a series of analysis, the problem of Deling Company was clearer. Generally speaking, it was a problem of cash flow and funds occupation. Its a financial problem but the solution must include general management of sales, purchase and inventories. To solve the problem, almost the whole company will be involved. Since it was only a test, the project we designed was focusing on the sales activity which is an important aspect of the business. “A rapid circulation of money is better than a large funds occupation; its a way to save money (Zouming,).” After finance analysis, I found that most funds of Deling company were occupied by Account Receivables(AR) and Inventories. As the sales on credit are increasing, the AR and the inventory turnover speed is slower and slower. This led to a bad funds circulation. “Business credits are convenient to be obtained than loans from bank, but their credit periods are short and prices of giving up credits are high( Gaohong,).” I also analyzed the funds source of Deling Company. I noticed that there were two important funds providers, one was stakeholder and the other was bank. Since Account Payable was very small, that is to say, the company failed to use business credits. However, the company provided their clients long-term credit period. Thats the immediate reason of the funds shortage.According to Ma Sumei(), “lost revenue should be regarded as additional costs when making decisions”. When we design finance ratios and set target value, we considered the lost revenue when the clients stop buying product from Deling company and choose other suppliers.4. Project Design 4.1 Activities planned to take place:To reach the aim and object made in advance and avoid time and cost wasted, the project progress should be planned carefully and logically. I design a series of procedure to be carried out, which include five stages:Stage 1: Information collection and analysis This stage includes two steps: firstly, team members collect information concerned. Well get finance information from the finance and accounting department, such as Balance sheet, Income statement, Cash-flow statement and other finance date about sales and costs. The market-planning department will provide us information of marketing situation. The marketing director can provide us the amount each sales clerk sold each period. We also can obtain information about the industry, which the company belongs to by other means; for example, we can explore the Internet, visit the homepages of the companys competitors and look through newspapers and professional magazines, etc.And then we turn to the second step: Information analysis. When enough information is collected, well begin to analyze, including relationships between these data, reasons why the company always be in lacking of current funds, possibilities to improve he sales situations Stage 2: Present a design draftAfter finishing the information analysis, well get a better understanding and draw a primary conclusion of the situation. Then a design draft will base on the processed information. Our design will bases on the finance and sales situation of the company. Then a design draft will base on the processed information.Stage 3: Communicate with the board of directors and modify the design draftWe present the first reportdesign draft to the board directors. After reading it carefully, theyll give us their written opinion. We also prepare questionnaires for the sales clerks. By these means, we could gather feedbacks both from the top and the bottom of the company. And then, well meeting with the Director Manager, the Marketing Director and several sales clerks. Well report the modified draft to them, explain the content of the draft, and listen to their further opinions and advices about the draft. Well communicate with them until they accept the design draft.Stage 4: Training and test runningThen we turn to the training and test running stage. The first step is give people-related training courses so as to make them understand the new system better and execute smoothly. The second step is test running. This step is the examination of the training course. People execute the system as if it were issued formally. Each person concerned with the system will do his daily work following the guideline of the training course. A secretary will be assigned to record the whole process. The test running wont be long and at the last well get further feedbacks in detail by report prepared by the secretary.Stage 5: Modify and present a final designAnd then we move to the last stage. We get useful feedbacks by which we can modify our design draft. We think of contingencies we havent considered of, add terms to improve the bugs, delete the terms of little meaning, etc. Each team member checks the draft carefully within his individual responsibilities scale, for its a final report.And then, my project will finally be completed when the final reportthe finance planning and assessing system for controlling of the sales activities be present to the companys board of directors. Flowchart of this part of activities:Stage1:Meeting with the top managementGather