Why would your company want to reduce its accounts receivable policy? Select One A.Reducing their receivables will increase their available cash B.Reducing their receivables will slightly increase demand C.Reducing their receivables will anger their suppliers D.None of the above
A. Reducing their receivables will increase their available cash
Reducing accounts receivable means that the company is collecting payments from customers more quickly. This, in turn, increases the cash flow of the company. By having more cash on hand, the company can better manage its financial obligations, invest in opportunities, and respond to unexpected challenges. Therefore, reducing accounts receivable is a common strategy for improving liquidity and financial flexibility.
