5.1 Accounting for Accounts Receivable

5.1.1 The Finance Department sets up detailed accounts receivable according to customers to promptly reflect the occurrence and balance of each customer's accounts receivable. Increase or decrease changes, and supervise the implementation of credit policies.

5.1.2 The Finance Department prepares a detailed list of accounts receivable, analyzes the aging of accounts receivable, and provides it to the Sales Department, Clearance Office and company leaders. According to The credit policy provides early warning information feedback when the amount of accounts receivable is too large or exceeds the credit period, or the aging of accounts is extended.

5.1.3 The sales department sets up accounts receivable ledger according to customers and records the basic information of accounts receivable in detail. Including each customer's credit limit, credit period, contract number of each business, handling personnel, approving personnel, delivery method and date, invoice records, payment collection records and reconciliation, and collection records.

5.1.4 The occurrence and formation of accounts receivable must be accompanied by valid vouchers that completely reflect the sales transaction and delivery of ownership of the goods, including authorized contracts, authorized credit policies and Customer signs receipt. The above materials should be archived and saved as the original data for selling goods and forming accounts receivable.

5.1.5 If a sales return occurs, the sales department will review and approve it and be responsible for obtaining the return certificate issued by the local competent tax agency from the customer, and issue a red-letter invoice based on this certificate. The quality control department should inspect the goods returned by the customer and issue an inspection certificate. The warehousing department should inventory the goods and process the return to the warehouse according to the returned product evaluation form. The Finance Department will adjust accounts receivable and related business processing when the procedures are complete.

5.2 Collection of accounts receivable

5.2.1 The business managers of the sales department are responsible for the entire process of the accounts receivable they handle, and are responsible for the customer's business conditions and collection of accounts receivable. Conduct tracking and analysis on payment ability, keep abreast of customer fund holdings and adjustment levels, and ensure the recovery of accounts receivable.

5.2.2 Sales staff should manage account receivables by category. Accounts receivable within the credit period should promptly remind customers to pay as agreed, and supervision should not be relaxed to prevent new arrears. For accounts receivable that have exceeded the credit period, sales staff will submit analysis and collection measures to the sales department leader for review. Customers with malicious defaults and poor credit quality should be removed from the credit list and collection efforts should be stepped up. If the collection fails and the amount is relatively large, it should be settled through litigation. For customers who have exceeded the credit period but have always had normal or even good credit records in the past, we should strive to properly resolve the issue of accounts receivable arrears while continuing and enhancing mutual business relationships. If the amount of overdue accounts receivable is large, the amount of overdue accounts receivable should be within the statute of limitations. Resolve in a timely manner through litigation.

5.2.3 When the sales staff are transferred, the accounts receivable handled or taken over by the sales staff should be handed over one by one as the main content, and the successor business staff must take over the responsibility for clearing the accounts receivable. , in the event of overdue bad debts or bad debts, the predecessor and subsequent sales staff should be held accountable at the same time according to the specific circumstances.

5.2.4 The company’s debt settlement department will be responsible for the accounts receivable that have expired before the formulation of these measures and have exceeded the statute of limitations and the original sales business manager has been transferred from the company and has no business dealings. Take over the collection.

5.3 Inventory of accounts receivable

5.3.1 Sales department staff should reconcile accounts with customers regularly, and the reconciliation results can be confirmed with a confirmation letter or reconciliation confirmation letter . The inquiry letter or reconciliation confirmation should be stamped by both parties and submitted to the Finance Department in a timely manner to ensure that the creditor's rights are clear and valid. If there are problems with the reconciliation between the two parties, the Finance Department will provide reconciliation support when necessary and work with the business staff to reconcile with the customer.

5.3.2 The sales department, finance department, and warehousing department should conduct a comprehensive inventory of accounts receivable and inventory goods on a regular basis (at least at the end of each quarter). Invoices must be issued and verified for goods that have been shipped and the property rights have been transferred. Confirm accounts receivable. Sales personnel who violate the above provisions shall be held accountable.

5.3.3 When the Finance Department checks accounts receivable, the corresponding payables should be checked together. For the same creditor who has both claims and debts, the Sales Department and the Purchasing and Supply Department should jointly explain the situation. After approval by the leaders of the Sales Department and the Purchasing and Supply Department, the Finance Department will perform accounting deduction processing to confirm that the creditor should The true amount of the receivable.

5.3.4 For the accounts receivable formed by the internal units of the group, the Finance Department should regularly reconcile the accounts receivable, prepare a reconciliation statement, and have it stamped and confirmed by both parties.

5.4 Assessment of accounts receivable

5.4.1 The Finance Department is responsible for verifying the occupation amount, aging structure and turnover period of accounts receivable, and decomposing them into each business segment. Assessed together with sales volume and repayment rate.

5.4.2 The company will hold sales personnel responsible for causing bad debt losses and deduct commission rewards.

5.5 Accounts receivable management expenses

5.5.1 Labor expenses and litigation expenses incurred in the process of managing and recovering overdue receivables shall be included in profit and loss as current expenses , no account should be left open.

5.5.2 If an agreement is signed with the debtor to recover the debt at a certain proportion of discount in order to reduce bad debt losses, the discount part shall be treated as a loss upon review by the company's board of directors or general manager's office meeting.

5.6 Bad debt write-off management procedures

5.6.1 Principles for recognition of bad debt losses

5.6.1.1 If the debtor is declared bankrupt or revoked in accordance with the law, he shall obtain a bankruptcy declaration , proof of cancellation of industrial and commercial registration or license revocation, or documents ordering closure by government departments and other relevant materials, after deducting the part repaid with the liquidation of the debtor's property, the receivables that cannot be recovered will be treated as bad debt losses;

< p>5.6.1.2 If the debtor dies or is declared missing or dead in accordance with the law, and his property or inheritance is insufficient to pay off the receivables and there are no heirs, the receivables shall be treated as bad debt losses after obtaining relevant legal documents;

5.6 .1.3 Receivables involved in litigation shall be treated as bad debt losses if the People's Court's judgment, ruling, or ruling on the lawsuit has taken effect, or if the lawsuit is won but the execution is terminated due to inability to execute;

5.6 .1.4 For accounts receivable that are overdue for 3 years and have legal collection negotiation records by the enterprise, and it can be confirmed that there has been no business dealings within 3 years, the balance after deducting various amounts payable to the debtor and compensation from the relevant responsible personnel shall be treated as bad debts Loss;

5.6.1.5 Receivables that are overdue for three years, the debtor is overseas or in Hong Kong, Macau, and Taiwan, have not been recovered despite legal collection, and there has been no business dealings within 3 years , after obtaining a certificate issued by an overseas intermediary agency that the debtor has fled or has gone bankrupt, it will be regarded as a bad debt loss.

5.6.2 Bad debt losses should be reported to the competent tax authorities in accordance with the relevant provisions of the tax law and processed after approval.

5.6.3 Internal processing procedures for bad debt losses

5.6.3.1 The sales department submits an application for bad debt write-off, explains the causes and facts of bad debt losses, and provides internal certification materials and external evidence. Legally valid documents.

5.6.3.2 To implement the relevant provisions of the Group Company’s Accounts Receivable Management Measures, the Finance Department will issue specific opinions after verification based on the write-off application and submit them to the company’s board of directors or general manager’s office meeting for approval.

5.6.3.3 For bad debt losses involved in litigation, the enterprise shall entrust a lawyer to issue a legal opinion.

5.6.3.5 For amounts owed by units within the group to each other, the creditor shall write off the debt in the same amount and at the same time as the debtor, and a written agreement shall be signed to provide each other with internal financial resources for handling claims or debts. material.

5.6.4 Bad debt losses caused by accounts receivable that are overdue for more than three years will be written off and retained, and the right of recourse will be retained by the business department or the internal debt settlement department of the unit.