Accounting for IGCSE & O level - Advanced Principles (Section 6 - No. 13)
Why might a business want to delay payments to its suppliers?
To improve its credit rating
To free up cash for other uses.
To increase its inventory levels.
To shorten the trade receivables collection period.
Explication
Delaying payments to suppliers allows a business to retain cash for a longer period, which can be used for operational expenses or other investments.