Assuming that a firm has done all it can to stimulate customers to pay promptly and to select vendors offering the most attractive and flexible credit terms, it can further speed collections and slow disbursements by taking advantage of the "float" existing in the collection and payment systems.

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By taking advantage of the "float" existing in the collection and payment systems, a firm can further speed collections and slow disbursements, even after stimulating customers to pay promptly and selecting vendors with favorable credit terms. Float refers to the amount of time between when a check is written or funds are transferred and when the funds actually move from one account to another. By strategically timing deposits and payments, a firm can maximize the benefits of float to improve its cash flow.

Assuming That a Firm Has Done All It Can to Stimulate