Asked by Savanah Grieve on Jul 23, 2024
Verified
Establishing preauthorized payments for fixed payments from customers should help reduce the total collection time for your firm.
Preauthorized Payments
Financial arrangements allowing a payee to automatically withdraw money from a payer's bank account for recurring bills or subscriptions.
Collection Time
The duration it takes for a business to receive payments owed by its customers.
- Appreciate the value of adopting a lockbox system and preauthorized payments for the reduction of collection periods.
Verified Answer
LL
Lorena LopezJul 26, 2024
Final Answer :
True
Explanation :
Preauthorized payments ensure that funds are automatically transferred from the customer's account to the firm's account on a predetermined schedule, thereby reducing the time it takes to collect payments manually.
Learning Objectives
- Appreciate the value of adopting a lockbox system and preauthorized payments for the reduction of collection periods.
Related questions
Implementing a Lockbox System Will Decrease the Total Collection Time ...
The Stetson Co ...
Preauthorized Payments Help Reduce Collection Float
Establishing Preauthorized Payment Arrangements Will Decrease the Total Collection Time ...
Burke Corporation Is Investigating a Lockbox System to Reduce Its ...