New DPO Data Guides the Decision of How Far to Stretch Payments
October, 2002
The decision to stretch payments is one that faces virtually every company today. With cash flow under pressure, most companies have stretched payments out by one to four days over the past year. Once the decision to stretch has been made, the next assessment is how long should payments be withheld. If one day is good, is two better?—and then what about three? Firms in the electrical components and equipment area have pushed them out by then days on average. The assessment is often guided by the corporate culture of the company as well as what is generally being done in the industry.
2009
