Advance Payment Management- Prepaid Purchases and Strategies

Lecture Notes Title: “Advance Payment Management: Prepaid Purchases and Strategies" 1. Purchase of Goods or Services with Immediate Payment • Operation Description: In this operation, as in subsequent ones, investments are made using available funds obtained from previous financing operations. • Investment: Inflow of goods or services, resulting in cash outflow. 2. Purchase of Goods or Services with Advance Payment • Investment: Increase in supplier credits, involving an outflow of cash due to advance payment. 3. Granting Financing Credits to Third Parties • Investment: Increase in financing credits, accompanied by a cash outflow due to credit extension. 4. Investments and Disinvestments Investments: Utilization of resources for acquiring productive assets or providing financing to third parties. Disinvestments: Retrieving previously used funds through: • The termination of financing extended to third parties. • The sale of goods or service provision. • A disinvestment can also involve a simultaneous different type of investment. 5. Purchase of Goods or Services with Deferred Payment • This operation results in both an increase in financing and an increase in investments. 6. Extinction of Financing Credit Granted to Third Parties • This operation leads to a cash inflow and a decrease in financing credits. 7. Extinction of Credits Arising from Deferred Payment Sales • It results in a cash inflow and a decrease in operating credits. 8. Sale of Goods or Services with Immediate Payment • This operation allows the retrieval of liquid funds (cash or available in bank and postal accounts). 9. Sale of Goods or Services with Deferred Payment • This operation simultaneously involves disinvestment of previously used funds in purchasing productive assets and investment in extending financing to customers. 10. The Flow of Management • Acquisitions are investment operations, while sales are disinvestment operations. • Availability of productive assets is essential for business operations. • New financing may be necessary when investment needs differ from disinvestment timing, leading to disparities between cash inflows and outflows. • Financing involves both equity and external capital.