Last week the FAO Blog covered the Approval Matrix structures.
Today I share with you a nice report by Aberdeen Group on balancing receivables and payables. It is always good to receive early and pay late.
Simplification is easy but over-simplification can be dangerous. We have been told to collect early and pay late, but maximizing DPO and minimizing DSO are not the goals you should be aiming for. When it comes to payables and receivables, optimization is a far better pursuit. This means not only paying later, but also paying earlier when that is more profitable. It also means understanding what options you have available, and knowing when it is against your long-term interest to employ them. This Analyst Insight looks at both pieces of this puzzle, and provides suggestions on how to get the most out of the accounts payable and receivable functions…
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