Is an increase in collection period necessarily bad?

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Is an increase in collection period necessarily bad?

2007-09-12 08:11:50 · 2 answers · asked by cute 1 in Business & Finance ➔ Other - Business & Finance

2 answers

Usually yes, but if an increase in collection period is compensated by an increase in how long you take to pay your creditors, then it's not so bad. The worst case is if you have to pay your creditors cash on delivery but your debtors take months to pay you. In that case, you're financing your debtors. You need to be tougher on your debtors.

2007-09-13 03:52:38 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋

This is a good question, and one that has been the source of confusion for me for quite a while.

2016-08-24 15:40:34 · answer #2 · answered by Anonymous · 0⤊ 0⤋