Do anybody think that extending credit in sales really boosts the sales?
Answer:
i think they do.
In general, if it is done at the same price, definitely yes. But you will make less money. (see time value of money)
If it done at a higher price (as it should be) it depends of the premium, the cost of money for the buyer, etc.
Almost always will be somebody who will not buy in cash but will do it with credit. That is why retailers honors credit cards, which is expensive but brings additional sales.
Yes. Buyers / individuals will spend a lot more if they can use a credit card, than if they were to pay cash.
A good company will expect credit as a matter of courtesy. For example, AT&T would never pay cash on demand (COD) or prepay. They would shop elsewhere. For them, it is an unnecessary inconvenience to prepay & they want proof of receipt of the goods or services ordered. The accounts payable process desires time to assure an honest transaction occured.
For most companies, there is a routine to income and expenses. A company creates or buys a product, paying in advance to do so. It generates an expense or cost. It would like to offset that expense by obtaining these inputs on terms / credit.
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