Financial management is a critical and essential way of governing and controlling the financial flow of the finance within the organization. However, most of the economic issues on whether to pay the organization’s bill in time or at the last minute highly focusses on the ideology and the law of the organization. In as much as most of the companies have highly concentrated on paying and clearing their outstanding bills in time, there are a couple of companies such as Bath, Bed and Beyond who have decided to settle their bills at the last minute.
To begin with, Bed company has been paying its bills at the last minute of the time due to a couple of reason, to begin with, the company has had a couple of activities that are to be sorted and verified. In this case, the reality and the reason to why the clearance of these bills is always at the last minute are due to the slow decision making from the top managerial levels. On the same note, the issue and steps of creating the financial cycle has also been a major source of the delayed clearance of the financial bills of these organizations.
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On the contrary, this is due to slow payment of the products from the clients that contribute to slow growth of the finance and accumulation of the company’s capital. In addition to the above statement, the slow accumulation of the company’s finances is because of the debt owed to the company by its clients. In this manner, the company takes longer to sort out and calculate their final monthly profit before allocating the final amount of money to settle their bill.
On the other hand, several companies such as Kmart have always cleared their bills in time, a step that gives them a chance to evaluate their monthly financial budget from all angle. As a matter of fact, the company is fully collecting their debts from their clients. In this case, the company can clear their bills in advance.
