In 2020, Maoqian Industry Co., Ltd. maintained a stable operation with an annual accounts receivable amount of 8.2 million yuan, staying at a well-off level suitable for the company’s scale. The receivables mainly came from its core business—wooden structure component sales (accounting for 75%) and small-scale wooden house customization services (accounting for 25%), with no major non-performing receivables.
Affected by the global economic environment, the company appropriately extended the credit period for 3 long-term cooperative clients (within 90 days, in line with industry norms) to support their operations, which slightly increased the receivable cycle to an average of 65 days (vs. 60 days in 2019). However, the recovery rate remained high at 98%, as the company strengthened follow-up management by assigning dedicated personnel to track payment progress monthly.
By the end of 2020, the company had recovered 92% of the annual receivables, with the remaining 8% (0.656 million yuan) scheduled to be collected in the first quarter of 2021. This receivable status ensured the company’s normal cash flow, laying a foundation for business expansion in the following year.
