If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it does not represent a real financial cost to your firm as long as the customer periodically pays off its entire balance.

Question

Quizplus · Accepted Answer

Even if the customer periodically pays off the entire balance, "stretching" accounts payable represents a real financial cost to the firm in the form of lost interest income and potential cash flow problems.

If One of Your Firm's Customers Is "Stretching" Its Accounts