Which of the following is a result of implementing an e-commerce system, which relies heavily on electronic data interchange and electronic funds transfer, for purchasing and billing?
Which of the following is a result of implementing an e-commerce system, which relies heavily on electronic data interchange and electronic funds transfer, for purchasing and billing?
Implementing an e-commerce system that relies heavily on electronic data interchange (EDI) and electronic funds transfer (EFT) for purchasing and billing can result in higher cash flow and treasury balances. E-commerce systems streamline the processing of transactions, reduce the time and effort required for traditional paper-based processes, and enable faster payments from customers. Consequently, this leads to quicker collection of accounts receivable, thus improving cash flow and the organization's treasury balances.
correct answer is A. Higher cash flow and treasury balances. Justification: Implementing an e-commerce system that relies heavily on electronic data interchange (EDI) and electronic funds transfer (EFT) for purchasing and billing can result in higher cash flow and treasury balances. E-commerce systems enable faster and more efficient processing of transactions, reducing the time and effort required for traditional paper-based processes. This can lead to quicker payments from customers and more timely collection of accounts receivable, resulting in higher cash flow and treasury balances for the organization.
answer is C
Would you mind explaining?
Would someone please explain?
It is C. I looked into this more and basically, adding EFT to your process doesn't necessarily increase your bills more (i.e., your accounts payable is always gonna be the same whether you have EFT or not); however, if you add an EFT feature to receiving payments from customers, you're gonna have a lot more people paying their bills to you on their credit cards - i.e., more accounts receivable.