Evans Ltd, a retail company have been expanding rapidly in recent years. The company has doubled the
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Evans Ltd, a retail company have been expanding rapidly in recent years. The company has doubled the range of products that it sells, with 50% of those sales being on extended credit to online customers. The company offers prompt delivery to customers and feel the need to pay suppliers promptly to ensure they always receive goods on time. With increasing inventory levels, an increase in the time taken to collect money from credit customers as well as an increase in irrecoverable debts and a reduction in the time taken to pay suppliers Evans Ltd are having severe cash flow problems. What action could the management accountant of Evans Ltd take in respect of inventory, receivables and payables to help to improve cash flow?
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