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Regular analysis of payables affects cash cycle efficiency from "summary" of Romancing the Balance Sheet: For Anyone Who Owns, Runs or Manages a Business by Anil Lamba
Managing payables is not merely an accounting exercise; it directly influences the cash cycle of a business, which is pivotal for maintaining liquidity and operational efficiency. When you analyze payables regularly, you gain insights into your payment terms, vendor relationships, and cash flow needs. This scrutiny allows for strategic decisions that can optimize cash outflows. By understanding the timing and amount of payables, a business can negotiate better terms with suppliers, potentially extending payment periods without incurring penalties. This extension provides the company with additional time to utilize cash for other operational needs or investments, thereby enhancing cash flow. Timely payments can s...
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