UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - NGUYEN HUU CANH INEFFECTIVE ACCOUNTS RECEIVABLE MANAGEMENT AND SOLUTION IN CASE OF HAI SON CONSTRUCTION MATERIAL COMPANY LIMITED MASTER OF BUSINESS (HONOURS) Ho Chi Minh City – Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - NGUYEN HUU CANH INEFFECTIVE ACCOUNTS RECEIVABLE MANAGEMENT AND SOLUTION IN CASE OF HAI SON CONSTRUCTION MATERIAL COMPANY LIMITED ID: 22140005 MASTER OF BUSINESS AMINISTRATION SUPERVISOR: PHAM PHU QUOC Ho Chi Minh City – Year 2018 EXECUTIVE SUMMARY Working capital management is very important for a company, especially for manufacturing, trading and distribution companies, because it has a significant impact on the profitability and liquidity of the company (1) As one of the three main elements of working capital, receivables also have an impact on the performance of the business This is the most important source of external financing of enterprises (2) and also a source of support for buyers (3) As a result, managers can use accounts receivable as an instrument to increase the revenue, profitability, and customer relationship However, the amount of receivables that are too high can lead to many downsizing effects on the company (4) So, keeping receivables in optimum amounts is an important financial issue Management of accounts receivable is also management of trade credit (8) Therefore, a specific and efficient trade credit policy is an important factor to improve the management of accounts receivable and working capital of the company The thesis is about Hai Son's inefficient account receivable management, in which specification of the ineffective trade credit policy This leads to inefficient cash conversion cycles and working capital management has a negative impact on the profits Research will show the factors that make this inefficiency as well as its financial results After considering all the aspects that lead to the problem, the thesis then aims to find and advise on possible alternatives and practices to improve the company's management of receivables ACKNOWLEDGEMENT This thesis becomes a reality with the support and assistance of many individuals I want to send my sincere thanks to all of them First of all, I would like to express my gratitude and sincerely thank my adviser, Dr Pham Phu Quoc for his guidance, imparting knowledge and expertise to my studies Special thanks to the members of Hai Son Company for cooperation, support and provide necessary information related to this thesis My thanks and appreciation also came to my teammates who have collaborated with me to complete the thesis and my classmates who are ready to help me with their abilities Last but not least, thanks for my family who always support and encourage me to complete this thesis TABLE OF CONTENT EXECUTIVE SUMMARY ACKNOWLEDGEMENT LIST OF FIGURES LIST OF TABLES INTRODUCTION 1.1 The information of Hai Son Construction Material Company Limited 1.2 The mission and vision of Hai Son Co., Ltd PROBLEM CONTEXT 2.1 The current financial status of Hai Son 2.1.1 The fall in revenue and net profit after tax in recent years 2.1.2 The rising of days sales outstanding 2.2 Trade credit policy of Hai Son 10 2.3 Current status of Hai Son in comparison with key competitors 11 PROBLEM IDENTIFICATION 14 3.1 Potential problems 14 3.1.1 Ineffective trade credit policy 15 3.1.2 The inherent conflict between Accounting and Sales Department 16 3.1.3 The impact of economic situation 17 3.2 Problem validation 18 3.2.1 Eliminating conflict and economic condition as the main problem 18 3.2.2 Illuminating the lenient trade credit policy as the main problem 18 3.2.3 Causes and effect diagram 19 CAUSE VALIDATION 20 4.1 The trade credit policy without discounts for early payment and ineffective collection policy 20 4.2 The trade credit policy without credit standards 20 SOLUTION 21 5.1 Improving trade credit policy with cash discount and effective debts collection 21 5.2 Request bank guarantee to overcome the weakness of credit standards 24 5.3 Selection of Solution 25 ORGANIZATION OF ACTIONS 26 CONCLUSION 29 SUPPORTING INFORMATION REFERENCES APPENDIX LIST OF FIGURES Figure 2.1 The decreasing in revenues and accounts receivable Figure 2.2 ROA of Hai Son, Viet Trung Figure 2.3 ROE of Hai Son, Viet Trung Figure 2.4 Receivable turnover ratio of Hai Son, Viet Trung Figure 2.5 Days sales outstanding of Hai Son, Viet Trung Figure 2.6 Aging of Hai Son’s accounts receivable in 2017 Figure 2.7 Cause and effective tree Figure 6.1 Cash conversion cycle Figure 6.2 Consequences of high accounts receivable LIST OF TABLES Table 2.1 Revenue and net profit after tax of Hai Son Table 2.2 ROA and ROE of Hai Son Table 2.3 Percentage of accounts receivable on credit sales Table 2.4 Receivables’ ratios of Hai Son INTRODUCTION 1.1 The information of Hai Son Construction Material Limited Company Hai Son Construction Material Company Limited was established in 2007 Currently, Hai Son is the exclusive distributor for INSEE Viet Nam and distributing materials for construction projects in Ben Tre province Hai Son has step by step built a strong foothold for its brand in the market of construction for supplying the current materials Despite many difficulties and challenges, the strength and experience of Hai Son have been confirmed so as to try to achieve the stable growth by undertaking the extraordinary breakthrough with main purpose of building a sustainable brand in order to always meet and satisfy all customers’ demands Some basic information about Hai Son: Company Name: Hai Son Construction Material Co., Ltd Office: Nghia Huan Hamlet, My Thanh Commune, Giong Trom District, Ben Tre Province Capital: billion dongs Organizational structure: Director Accounting Department Sales Department STORES Warehouse Department 1.2 The mission and vision of Hai Son The world is changing to the time To thrive as business in the future, Hai Son have look ahead, understand the trends and prepare for what is to come Hai son must get ready for tomorrow today The vision of Hai Son is all about It creates a destination of business and lead Hai Son to face with the next challenges The mission of Hai Son is permanent such as creating the value and inspire moments of happiness and optimism PROBLEM CONTEXT Financial statements are the reports about the financial results, financial condition and cash flows Ross, Westerfield and Jordan (5) stated that financial statements are the snapshot of organizing and summarizing the assets and equity of a company, reflecting the results of business in one year Skim through the financial statements from 2014 to 2017 of Hai Son, there are some issues which is worthy to concern: At first sight, Income statements presented the sharp fall in sales and net profit after tax from 2014 to 2017, even that the losses occurred in years ago The fall in sales also contributed to the decreasing of accounts receivable on Balance sheet Going to deeper analysis, the increasing with high speed from 2014 to 2017 of days sales outstanding ratio were disturbing in accounts receivable management The following detail analysis will illustrate the problems which Hai Son is facing 2.1 The current financial status of Hai Son 2.1.1 The fall in revenue and net profit after tax in recent years According to Income statement from 2014 to 2017, the most noticeable is the significant decreasing in total revenue and net profit after tax during four years period The company was even loss in 2016 and 2017 which illustrated at Table 2.1 Unit: Dongs Revenue Net profit after tax 2017 26,441,898,554 2016 34,229,467,009 2015 50,348,740,177 2014 83,873,256,671 (252,311,629) (45,378,148) 26,388,869 1,185,546,509 (Hai Son’s Income statement, 2014-2017) Table 2.1 Revenue and net profit after tax of Hai Son The speed of decreasing in net profit after tax was too high If net profit after tax was 1.185 million dongs in 2014, net profit after tax was just negative number in 2017 Addition, during three years from 2015 to 2017, return of assets (ROA) and return of equity (ROE) of the company tend to decrease significantly According to Table 2.2, if ROA and ROE were rather high in 2014 (2.69% and 38.8%), both ratios reduced sharply in 2017 (-0.88% and -7.18%) The main reason was the loss Unit: Dongs 2017 Net profit after tax Assets Equity ROA ROE 2016 2015 2014 (252,311,629) (45,378,148) 26,388,869 1,185,546,509 28,716,257,635 3,512,878,725 -0.88% -7.18% 31,496,161,227 3,765,190,153 -0.14% -1.21% 36,852,678,129 3,811,935,578 0.07% 0.69% 44,022,502,581 3,055,469,522 2.69% 38.80% (Financial statements of Hai Son from 2014 to 2017) Table 2.2 ROA and ROE of Hai Son To find out what happened, an interview with the individuals concerned is conducted Accordingly, the director of Hai Son is Mrs Hanh who understanding the problems that the company is facing In conversation, she state that The major cause of the decrease in revenue is the change of business orientation Before 2015, our revenues were very high However, since 2015, Hai Son oriented to become a specialized project distributor because of highly competitive market in building material distribution Thus, Hai Son reduces supplying for 2nd level agencies to concentrate on construction projects especially government construction projects That explains for the fall in the revenue in the next years Another reason, I think, is the highly sovereign debts So, the government restricts to build or repair the public construction Therefore, the results of Hai Son’s business is negative in recent years Mr Hai who working in Sale department for years continued that In recent year, the massive competition of other distributors have caused problems for the introduction of products and sale Many new distributors appeared and offered lower price to agents It is reason which forces Hai Son to change orient business and aims to supplying building material to construction projects Basically, the fall in revenue and profit were starting from 2015 when Hai Son changed orientable business and aims to supplying goods to construction projects 2.1.2 The rising of day sales outstanding After studying the reasons that caused to the fall in revenue and profit, a further consideration of sale activities will show the details of problems Based upon balance sheet, it can be seen that the amount of receivables fell significantly during 2014 to 2017 This reduction was not only due to the management of accounts receivable but also the reduction of revenue The speed of decreasing in accounts receivable was even lower than that of revenues indicating that credit terms seem more loosely During years, revenues decreased more than 68% while accounts receivable decreased by less than half Figure 2.1 will show the detail of the speed of decreasing in revenues and accounts receivables % decrasing in revenues % decrasing in accounts receivable 150,00% 100,00% 50,00% 0,00% -50,00% -100,00% 2014 2015 2016 2017 Figure 2.1 The decreasing in revenues and accounts receivable 32 10 How about the debts collection procedures? x 11 Is there penalty interest rate or legal actions for late payment provision in sale contract? x 12 How about the procedure of overdue debts collection, especially bad debts? x QUALITATIVE RESEARCH: Time of interview: 14:00, 02 Apr 2018 in Ben Tre Province Duration for each interviewer: 10-20 minutes Address: Nghia Huan Hamlet, My Thanh Commune, Giong Trom District, Ben Tre Province In-depth interview 1: - Interviewer: Nguyen Huu Canh Interviewee: Huynh Thi Tuyet Hanh Title: The director Age: 42 Nguyen Huu Canh: Good morning Could you introduce something about yourself and the position you are working in this company? Huynh Thi Tuyet Hanh: My name’s Tuyet Hanh, I am director of Hai Son Nguyen Huu Canh: As the director of Hai Son, you are understand all problems of Hai Son Could you share your opinion about the fall in sales in recent years? Huynh Thi Tuyet Hanh: The major cause of the decrease in revenue is the change of business orientation Before 2015, our revenues were very high However, since 2015, Hai Son oriented to become a specialized project distributor because of highly competitive market in building material distribution Thus, Hai Son reduces supplying for agencies to concentrate on construction projects especially government construction projects That explains for the fall in the revenue in the next years Another reason, I think, is the highly sovereign debts So, the government restricts to build or repair the public construction Therefore, the results of Hai Son’s business is negative in recent years Nguyen Huu Canh: Could you share your opinion about the fall in profit in recent years and negative profit after tax in years ago? 33 Huynh Thi Tuyet Hanh: Despite of decreasing in sales, the operation costs still occurred to maintain the business There are many type of costs such as rent expense, wage and salary expense, interest expense, depreciation and other expenses which did not reduce Because of these expenses, combined with the fall in sales, the profit after tax was effected and decreased sharply Addition, it is harder to collect receivables from agencies when Hai Son changed oriented business and reduced supplying goods for them Nguyen Huu Canh: How about the difficulty of debts collection from the customer? What are the reason? Huynh Thi Tuyet Hanh: Because of the difficulty economic situation and competition in the market, many customers have been unable to pay their debts on time and they postponed the payment repeatedly The agencies only pay their debts when they have already sold out the goods Besides, there is more risky in selling for construction projects The contractors just make the payment when they finish project and receive the money from the owner’s construction Nguyen Huu Canh: How about the procedures in granting credit to customers? Huynh Thi Tuyet Hanh: The majority customers of Hai Son are contractors Thus, Hai Son is granting different credit limit for different customers We based on cost estimate of construction which provided by the customer to set credit limit We will stop to deliver goods to the customer when their debts is greater than credit limit or who not pay their debts on time Nguyen Huu Canh: Are there credit standards to evaluate a customer? Huynh Thi Tuyet Hanh: No, there are not We mainly set up credit limit on the basis of cost estimate of construction project Nguyen Huu Canh: How about the credit period? Huynh Thi Tuyet Hanh: The credit period is 45 days for all customers and the cash discount for immediate payment is 2% Nguyen Huu Canh: How about the cash discount for early payment? Huynh Thi Tuyet Hanh: There is no discount for early payment on credit sales The customers have to pay all the value of sales contract on time Nguyen Huu Canh: Is there penalty interest rate or legal actions for late payment provision in sale contract? 34 Huynh Thi Tuyet Hanh: When we compose sales contract, we usually attach penalty interest rate for late-payment provision However, we seldom request that fine We think that it will impact to the relationship and the honor of the customers Thus, we just apply legal actions to the customers who are unwilling to pay and postpone the payment in long time Nguyen Huu Canh: How about the procedure of overdue debts collection, especially bad debts? Huynh Thi Tuyet Hanh: When customer is not willing to pay and hold the debts in long time, we use legal actions And we once had to sell a bad quality receivable for a collecting company It was very expensive Those companies often take from 20% to 40% of the amount of accounts receivable that they buy However it is still better than losing total of that debt In-depth interview 2: - Interviewer: Nguyen Huu Canh Interviewee: Nguyen Van Hai Title: Salesman Age: 35 Nguyen Huu Canh: Good morning Could you introduce something about yourself and the position you are working in this company? Nguyen Van Hai: My name is Hai, I am salesman I currently work for Hai Son Nguyen Huu Canh: Could you share your opinion about the fall in sales in recent years? Nguyen Van Hai: In recent year, the massive competition of other distributors have caused problems for the introduction of products and sale Many new distributors appeared and offered lower price to agencies Furthermore, the fake and low quality products continuous appeared in the market which the price is lower than Hai Son’s products These factors impacted to the business and sales of Hai Son These reasons forced Hai Son to change orient business and aims to supplying building material to construction projects Nguyen Huu Canh: Do you evaluate paying capacity of the customers to sell the goods on credit sales? Nguyen Van Hai: In reality, the primary income of salesman bases on commission and bonus related to revenues Therefore, the salesman usually try to sell as many goods as possible, salesman seldom concerns about the paying capacity of customers on credit sales Beside, revenues are decreasing and difficult to sell goods in recent years So, we all everything to attract the customers and increase the revenues 35 In-depth interview 3: - Interviewer: Nguyen Huu Canh Interviewee: Tran Thi Ngoc Thanh Title: Chief Accountant Age: 34 Nguyen Huu Canh: Good morning Could you introduce something about yourself and the position you are working in this company? Tran Thi Ngoc Thanh: My name is Thanh, I am chief accountant I work in Hai Son for years Nguyen Huu Canh: Could you share your opinion about the fall in profit in recent years and negative profit after tax in years ago? Tran Thi Ngoc Thanh: In my opinion, the primary reason caused the fall in profit that is to compete in supplying materials for construction projects and second level agencies, Hai Son has to keep the price lower than market Therefore, the cost of goods sold is high and the markup rate is just from 3% to 5% When sales decreased, the net income also decline Because of high operating expenses, the net income was not enough to cover all the expenses As a result, there are losses in years ago Nguyen Huu Canh: How about the difficulty of debts collection from the customer? What are the reason? Tran Thi Ngoc Thanh: Many customers postpone their obligation for long time Some customers have already paid after to months Some customers have already paid after one year Some customer even have not already paid and gotten default in payment On the other hand, since Hai Son reduced supplying goods for second level agencies, some customers are not willing to make the payment for the previous sale contracts According to my investigation, the reason is that these customers have not sold all of the goods yet so they could not pay all of debts The large amount of accounts receivable became doubtful debts Some customers did not meet the conditions to become the second level agency of other distributors Therefore, they postpone to pay or make partial payment because Hai Son will continue to supply the goods to them Besides, because of the late payment of the owner’s construction, the contractors have not pay on time and a lot of capital jammed in accounts receivable 36 Addition, the important reason is the Sales department The salesman did not concern the qualification and effective business of customers when offered sale contracts They just aimed to increasing revenues As the result, the Accounting department has to face with the large amount of bad debts In my opinion, it is really the real conflict between Accounting and Sale departments Nguyen Huu Canh: How about the debts collection procedures? Tran Thi Ngoc Thanh: We usually make the call or send the confirmation note even visit each customer to claim the debt at the end of the year to collect accounts receivable But, these collection method are not effective and the amount of money received which is not like expectation 37 REFERENCES (1) Lazaridis I, Tryfonidis D Impact of Working Relationship Between Working Capital Management and Profitability of Listed Companies in the Athens Stock Exchangeapital Management on Profitability: A Study on Listed Manufacturing Companies in Colombo Stock Exchange Journal of Financial Management and Analysis 2006; 19(1):26-35 (2) Petersen M, Rajan R Trade Credit: Theories and Evidence Review of Financial Studies 1997;10(3):661-691 (3) Cheng N, Pike R The trade credit decision: evidence of UK firms Managerial and Decision Economics 2003;24(6-7):419-438 (4) Gill A, Biger N, Mathur N The Relationship between Working Capital Management And Profitability: Evidence From The United States Business 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Finance income Finance expenses Selling expenses General and administrative expenses Operating profit Other income Other expenses Other profit Accounting profit before tax Current corporate income tax expense Deferred tax (expense) imcome Net profit after tax 2017 2016 2015 2014 26,441,898,554 34,229,467,009 50,348,740,177 83,873,256,671 11,771,463 64,703,960 26,441,898,554 34,217,695,346 50,284,036,017 83,873,256,671 25,605,589,697 32,742,950,364 48,110,417,564 79,584,299,662 836,308,657 1,474,744,782 2,173,618,253 4,288,956,809 4,691,487 99,533,930 492,249,559 6,353,722 299,830,843 786,082,149 13,643,120 449,711,966 1,129,376,256 584,626,698 1,177,971,508 501,527,884 440,563,260 514,299,883 1,089,331,890 -252,311,629 0 -45,378,148 0 93,872,868 61,886,118 -61,886,518 1,437,026,113 0 -252,311,629 -45,378,148 31,986,550 1,437,026,113 0 5,597,481 251,479,404 0 0 -252,311,629 -45,378,148 26,388,869 1,185,546,509 Appendix 2: Balance sheet of Hai Son Unit: Dongs ASSETS A -Current assets I Cash and cash equivalents II Short-term investment III Accounts receivable Accounts receivable from customers Other accounts receivable 2017 2016 2015 2014 28,399,206,909 31,104,656,117 36,331,973,060 43,465,677,687 6,680,845,794 9,143,524,131 1,333,852,968 6,310,736,888 8,624,256,877 0 9,228,398,834 12,156,450,969 6,300,089,888 8,624,256,877 9,228,398,834 12,156,450,969 10,646,800 0 4,914,810,472 40 ASSETS Allowance for doubtful accounts 2017 2016 IV Inventories V Other current assets B - Long-term assets Fixed assets TOTAL ASSETS LIABILITIES AND EQUITY A Liabilities I Current liabilities Current liabilities Accounts payable 2015 2014 0 15,055,117,294 13,112,068,542 24,176,924,345 24,448,027,141 352,506,333 224,805,967 1,592,796,313 1,946,388,505 317,050,526 391,504,910 520,704,869 556,824,694 317,050,526 391,504,910 520,704,869 556,824,694 28,716,257,635 31,496,161,227 36,852,678,129 44,022,502,581 2017 2016 2015 2014 25,203,378,710 27,730,970,874 33,040,742,351 40,967,033,859 25,203,378,710 27,730,970,874 31,490,742,351 40,967,033,859 1,399,999,800 1,851,864,035 5,383,846,056 1,549,999,800 23,803,378,710 25,528,382,992 23,916,561,691 38,341,448,460 Taxes and payable to state budget Other current liabilities II Long-term liabilities B - Equity Paid-in capital Undistributed earnings TOTAL LIABILITIES AND EQUITY 350,723,447 390,334,204 75,585,199 0 3,512,878,725 2,599,999,800 912,878,725 0 3,765,190,153 2,599,999,800 1,165,190,153 1,799,999,800 1,549,999,800 3,811,935,578 2,599,999,800 1,211,935,578 999,999,800 3,055,469,522 2,599,999,800 455,469,522 28,716,257,635 31,496,161,227 36,852,678,129 44,022,503,581 Appendix 3: Income Statement of Viet Trung Unit: Dongs Items Revenue from sales and services Deductions Net revenue from sales and services Costs of goods sold Gross profit from sales and services Finance income Finance expenses Selling expenses General and administrative expenses Operating profit Other income Other expenses Other profit Accounting profit before tax 2015 13,799,545,030 2016 13,218,935,288 2017 17,885,479,584 13,799,545,030 13,218,935,288 17,885,479,584 10,720,783,218 9,296,967,442 10,997,928,836 3,078,761,612 3,921,967,646 6,887,550,548 51,606,526 2,793,000 267,111,794 112,638,812 60,317,524 16,229,250 3,072,798,538 3,770,753,174 5,863,858,432 54,776,400 305,687,254 1,067,780,190 54,776,400 305,687,254 1,067,780,190 41 Items Current corporate income tax expense Deferred tax (expense) imcome Net profit after tax 2015 2016 2017 9,585,706 61,137,290 213,555,878 45,190,494 244,549,764 854,224,112 Appendix 4: Balance sheet of Viet Trung Unit: Dongs ASSETS A -Current assets I Cash and cash equivalents II Short-term investment III Accounts receivable 2015 7,800,321,656 5,739,273,350 1,539,515,136 2016 8,243,825,342 5,607,976,634 1,871,418,398 2017 11,362,651,218 6,739,951,928 2,664,896,876 Accounts receivable from customers 1,092,561,210 1,403,389,970 1,478,813,552 446,953,726 468,028,228 978,083,124 Other accounts receivable 0 207,999,800 Allowance for doubtful accounts 0 195,797,652 325,734,918 300,838,388 49,639,818 251,198,370 8,101,160,244 496,496,534 267,933,176 632,938,166 11,923,366 621,014,600 8,876,763,708 1,628,953,080 328,848,734 185,475,642 -200 185,475,642 11,548,127,060 Advance payment to supplier IV Inventories V Other current assets B - Long-term assets Fixed assets Real estate investment TOTAL ASSETS LIABILITIES AND EQUITY A Liabilities I Current liabilities Current liabilities Accounts payable Advance payment from customer Taxes and payable to state budget Other current liabilities II Long-term liabilities B - Equity Paid-in capital Undistributed earnings TOTAL LIABILITIES AND EQUITY 2015 2016 2017 5,358,731,332 4,357,922,364 3,917,780,908 5,889,784,832 4,888,975,864 4,209,762,290 7,706,923,872 6,706,114,904 4,999,290,644 93,045,108 320,817,566 861,712,142 330,115,948 250,934,778 338,638,500 16,979,800 1,000,808,768 2,742,428,712 1,999,999,800 742,428,712 107,460,630 1,000,808,768 2,986,978,676 1,999,999,800 986,978,676 506,473,018 1,000,808,768 3,841,202,988 1,999,999,800 1,841,202,988 8,101,160,244 8,876,763,708 11,548,127,060 42 APPENDIX 5: AGING OF ACCOUNTS RECEIVABLE Unit: Million dongs 31/12/2017 Classification Debts Aging of accounts receivable - 45 days 45 days - month months - months months - 12 months year - years Over years 31/12/2016 Recov Book erable value value 31/12/2015 Recov Book erable value value 31/12/2015 Recover Book able value value Book value Recovera ble value 6,310 6,310 8,624 8,624 9,228 9,228 12,156 12,156 1,073 1,073 1,466 1,466 1,568 1,568 2,067 2,067 1,451 1,451 1,984 1,984 2,123 2,123 2,796 2,796 2,209 2,209 3,018 3,018 3,230 3,230 4,255 4,255 694, 694, 948 949 1,015 1,015 1,337 1,337 379 505 379 505 517 670 517 670 554 738 554 738 729 973 729 973 43 APPENDIX 6: TRADE CREDIT POLICY OF HAI SON 44 45 46 ... ratios of Hai Son INTRODUCTION 1.1 The information of Hai Son Construction Material Limited Company Hai Son Construction Material Company Limited was established in 2007 Currently, Hai Son is... OF ECONOMICS HO CHI MINH CITY International School of Business - NGUYEN HUU CANH INEFFECTIVE ACCOUNTS RECEIVABLE MANAGEMENT AND SOLUTION IN CASE OF HAI SON CONSTRUCTION MATERIAL COMPANY. .. capital in receivable Remaining too high amount of accounts receivable and too long days sales outstanding cause the negative effects on profitability of the company In the case of Hai Son, the