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Unformatted text preview: ipts and disbursements, the financial manager,
who is probably a generalist,
needs to rely on the expertise of
the commercial banker for the
firm’s most cost-effective means
of managing cash.
Funds that have been sent by the
payer but are not yet usable
funds to the payee.
The time delay between when
payment is placed in the mail and
when it is received.
The time between receipt of a
payment and its deposit into the
The time between deposit of a
payment and when spendable
funds become available to the
firm. Hint One method of
accelerating the collection of
accounts receivable is to let
someone else do the financing
for you, such as by using bank
credit cards or selling accounts
receivable to a third party at a
discount. Another method is to
change the credit terms:
Increase the cash discount and
shorten the required payment
A collection procedure in which
customers mail payments to a
post office box that is emptied
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