Instructions

Reflect on this case study and discuss how implementing such a policy could benefit a business of your choice. Provide your response in the space below. Be sure to write your responses in complete sentences. For example, "Implementing a policy like this could benefit Amazon by$..."$

Underline the name of the business you chose.

See in the example above.

What is Accounts Payable?

Accounts payable refers to the money a company owes to its suppliers or vendors for goods and services it has received but not yet paid for. It's a short$-$term debt that the company should settle within a specific period.

Example: Imagine you run a small bakery. You order flour, sugar, and other ingredients from a supplier. The supplier delivers the goods and sends you an invoice for $$500.$ You are to pay the invoice amount within $30$ days. Until you pay that invoice, the $$500$ is considered accounts payable for your bakery.

Score

The total points for this question is $5$ points.

Case Study

Company ABC, a mid$-$sized manufacturing firm, implemented a policy to pay at least $50\%$ of its invoices within the discount period to take advantage of early payment discounts. This strategy significantly improved their cash flow, reduced their accounts payable, and enhanced their relationships with suppliers, leading to more favorable terms in future negotiations.