December 30, 2009 
This entry was posted on Wednesday, December 30th, 2009 at 9:56 pm and is filed under Accounting, Accounts Payable, Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
If you are engaged in trading you must learn how to manage your money. You will receive payments from clients, customers and buyers. This is your sales or your accounts receivable. At the same time you will be making payments to suppliers, to rent etc. This is your accounts payable. The trick is to manage your accounts payable terms to make sure that you can collect payments immediately and pay later.
This is what you can do to maximize your accounts payable terms. The best scenario is to collect immediately from sales. If you are in retail then the collection of cash is immediate. You will then negotiate with suppliers to pay them on terms such as 30 days, 60 days or 90 days. You will then buy enough time to manage your cash flow. You could place it somewhere else to earn interest before paying your suppliers.