prepare a business letter to share your advice with a client. You will explain complex financial data and discuss the cause and effect of select accounting transactions on cash balances.
Read the fictional scenario and respond to the checklist items.
Scenario:
The Chief Financial Officer (CFO), Patricia Bendiger of Tellabine Company in Denver, Colorado is asking for your advice. The CFO explains sales are increasing but there is a constant matter of not having enough cash to meet payroll or pay vendors within 30 days.
Checklist: Prepare a business letter to the CFO:
- Explain why cash can go down even when sales are up; refer to “receivables.”
- Analyze the scenario and explain three accounts the CFO should review each day and explain why. Focus on short-term balance sheet accounts, i.e., “receivables and payables.”