Main types of non-performing assets and preventive measures

1. Non-performing assets in monetary assets

Non-performing assets in monetary assets are mainly caused by insiders. It mainly includes long-term outstanding accounts in bank deposits that are difficult to recover and bad and dead accounts in foreign deposits. Long-term outstanding accounts in bank deposits are long-term outstanding accounts that cannot be recovered or are difficult to recover due to exchange errors; Dead accounts in foreign deposits are the funds that enterprises remit to the purchasing place or distribution generation gap outlets in the name of purchasing, which are misappropriated or formed due to other reasons, but still hang in other monetary fund accounts without treatment.

for the long-term outstanding accounts of the enterprise, the financial personnel of the enterprise can carefully check the cash, bank deposit journals and bank statements. Enterprises generally conduct such a verification once a month, and prepare statement of bank reconciliation. Preparing reconciliation tables regularly helps enterprises to know the outstanding accounts in time, analyze the reasons and find out the bad assets. For those deposits deposited in foreign accounts in the name of purchase, enterprises should also regularly ascertain their authenticity. In case of misappropriation, they should ascertain the whereabouts of funds and determine their recoverability. If they are losses, they should also promptly ascertain the causes of losses.

2. Bad assets in accounts receivable

Accounts receivable refer to the money that should be collected from customers for selling products and providing services. Accounts receivable mainly occur because enterprises sell on credit in order to gain competitive advantage; Or the time difference between sales and collection between enterprises. The non-performing assets in accounts receivable are one of our most common non-performing assets. It is mainly due to the poor operating conditions of the client unit or the malicious default. Including bad debts and dead accounts in accounts receivable, prepayments and other accounts receivable.

for risk prevention in accounts receivable, we can mainly avoid risks by setting reasonable credit period, credit period and cash discount. When there are bad debts, you can also take a proactive approach to collect accounts and extract bad debts, so as to reduce losses as much as possible. At the same time, according to the recovery of accounts receivable, we should confirm the amount of loans and dead accounts in accounts receivable, other accounts receivable and prepayments, and strive to correctly evaluate the actual stock of accounts receivable of enterprises.

3. Non-performing assets in inventory

Inventory refers to the materials reserved by an enterprise for sale or consumption in the process of growth and operation, including raw materials, low-value consumables, products in process, semi-finished products and fuels. Non-performing assets in inventory are mainly due to inventory backlog, production elimination and damage, resulting in the realized value of inventory being less than historical cost. The main causes of non-performing assets in inventory are the decline of market price and the mildew and damage of goods themselves. For those products in process, semi-finished products and finished products, part of the reason is that enterprises have inflated costs higher than the actual value in order to overestimate profits.

for the prevention of non-performing assets in inventory, the enterprise itself can carry out the following aspects. First of all, of course, it is necessary to fully study the market demand, integrate products with the market, and not blindly purchase and produce, resulting in a backlog of waste. At the same time, it is necessary to strengthen the control of inventory turnover, speed up inventory turnover, and prevent backlog losses. Secondly, inventory can be classified and classified into three categories: A, B and C according to the proportion of costs by ABC analysis, so as to facilitate classified management. Finally, due to the principle of prudence, every enterprise will make provision for impairment loss of inventory. Compare the book value of inventory with the market price to determine the amount of the book value of inventory higher than the actual value. For those who artificially overestimate profits and cause inflated value, they should be distinguished from the inventory impairment caused by normal market price decline. Provision for inventory depreciation is made separately to minimize the loss of non-performing inventory.

4. Non-performing assets in investment

Non-performing assets in the investment link account for the largest proportion of non-performing assets in the whole enterprise, and decision-making mistakes are the root cause of non-performing assets. It mainly includes unrecoverable investment income and unrecoverable investment principal. On the one hand, it is difficult for enterprises to realize the purchase of securities because of the market downturn and falling prices, or the investment losses and investment principal losses caused by the operating losses of the invested enterprises. On the other hand, in order to whitewash the statements, enterprises overestimate the low-value assets and invest them in related enterprises, thus forming inflated investment.

for the non-performing assets generated in the investment, we must first determine a reasonable investment structure and establish an investment early warning system. For the investment with obvious investment losses, we must transfer the investment in time to prevent it from bringing more serious losses to the enterprise in the future. Secondly, it is necessary to test the authenticity of the investment and prevent some employees from taking the principal and investment income as their own use. Finally, it is necessary to conduct regular analysis and research on the projects invested by enterprises, investigate the operating situation, find out the existing problems and propose solutions. Reduce the risk of investment decision to the lowest point and minimize the amount of non-performing assets in investment.