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Tham khảo tài liệu 'pearson education of management accounting_14', kinh doanh - tiếp thị, quản trị kinh doanh phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 438 CHAPTER 11 MANAGING WORKING CAPITAL Real World 11.11 continued Figure 11.9 The average OCC of large European businesses The survey calculates the operating cash cycle using year-end figures for trade receivables inventories and trade payables. We can see that there has been a slight improvement in 2007 compared to the two previous years. Source Compiled from information in 2008 REL CFO European Working Capital Survey www.relconsult.com. Cash transmission A business will normally wish to benefit from receipts from customers at the earliest opportunity. The benefit is immediate where payment is made in cash. However when payment is made by cheque there is normally a delay of three to four working days before the cheque can be cleared through the banking system. The business must therefore wait for this period before it can benefit from the amount paid in. In the case of a business that receives large amounts in the form of cheques the opportunity cost of this delay can be significant. To avoid this cost a business could require payments to be made in cash. This is not usually very practical mainly because of the risk of theft and or the expense of conveying cash securely. Another option is to ask for payment to be made by standing order or by direct debit from the customer s bank account. This should ensure that the amount owing is always transferred from the bank account of the customer to the bank account of the business on the day that has been agreed. It is also possible for funds to be transferred directly to a business s bank account. Customers can pay for items by using debit cards which results in the appropriate account being instantly debited and the seller s bank account being instantly credited with the required amount. This method of payment is widely used by large retail businesses and can be extended to other types of business. MANAGING TRADE PAYABLES 439 Bank overdrafts Bank overdrafts are simply bank current accounts that have a negative balance.