Running Header: REPLY TO TORRANCE WILLIAMS

Jarrett Davis Reply to Torrance Williams BUSI 530

REPLY TO TORRANCE WILLIAMS

Williams (2012) did a great job sharing the benefits of being proactive and realizing cash flow issues before they become severe. Torrance and I are in agreement that networking and discussion should take place to ensure that financing options are available in the event they were needed. He noted that searching for alternative sources of capital can be essential to avoiding cash flow problems. It was suggested that companies be aware which assets they can liquidate without harming business operations. This paper will attempt to add additional insight on cash flow. In the present many firms are being forced to allow long term financing in an effort to remain competitive. This has caused many companies to experience problems holding the necessary working capital to do business. Firms must be aware of their cash flow cycle (Watt, 2011). The cycle can be measured in days, and begins with the purchase of raw materials and ends when receivables on an account are collected. Currently account receivable days are now longer than their average rate prior to the recession. As CFO it is best to be familiar with your customers, be aware who is a slow payer and who is reliable. Some small firms are beginning to stop issuing credit on accounts that are not paid in a timely fashion. Such companies understand that as the debtor you are not asking for money, you are asking your customer to be true to the agreement in place. We should all be mutually accountable to one another in love and in responsibility. Owe no one anything, except to love each other, for the one who loves another has fulfilled the law. (Rom. 13:8).

REPLY TO TORRANCE WILLIAMS References Watt, A. (2011). Improving the cashflow cycle. NZ Business, 25(5), 66.