Question

Explain various methods of accularitingcash inflow and slowing cash outflow

Answer 1

In order to accelerate cash inflows, the collections from customers should be prompt. This will be possible by prompt billing. The customers should be promptly informed about the amount payable and the time by which it should be paid.

It will be better if self addressed envelope is sent along-with the bill and quick reply is requested. Another method for prompting customers to pay earlier is to allow them a cash discount. The availability of discount is a good saving for the customer and in an anxiety to earn it they make quick payments.

Answer 2

$\large \green{ \fcolorbox{gray}{black}{ ☑ \: \textbf{Verified \: answer}}}$

CASH IN FLOW

• It means that cash is going into the company.
• E.g : Receipt of a bank loan, Interest on savings and Investments and Shareholder investments etc

CASH OUT FLOW

• It means cash is going out of the company.
• E.g: Purchase of stock, Raw materials or tools, Wages, Rents and Daily operating expenses, Dividend payments, Income tax etc