Definition
Cash flows are the monies received and paid out that are associated with a project per period, including the initial investment, or more simply, the movement of cash into and out of the business. [1]
Where the “inflows” (receipts) have exceeded the “outflows” (disbursements) in a specified period of time, positive cash flow provides additional net cash.
When the disbursements exceed the receipts in a specified period of time, negative cash flow reduces net cash. [2]
Cash Payments
Cash before delivery (CBD) or cash in advance (CIA) refers to payments made before receipt or delivery of goods or services. [2]
Cash on delivery (COD) is the practice of collecting for the price of the merchandise plus the relevant transportation charges. [2]
The collect on delivery (COD) method requires the buyer must to make payment for the purchase at time of delivery of goods. It is considered a poor substitute for cash before delivery or cash in advance because if the purchaser refuses, the seller incurs return freight charges and any deterioration of the product in the process. [2]
See Also
Cash discount
Cash flow velocity
References
- Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc.
- American Marketing Association, AMA Dictionary.