Question

The B/AR/C process completes the order-to-cash process by:

a) Initiating purchase orders
b) Managing inventory levels
c) Handling billing, accounts receivable, and cash receipts
d) Analyzing market trends

Answer 1

The B/AR/C process, which stands for Billing, Accounts Receivable, and Cash receipts, completes the order-to-cash process by handling billing, managing accounts receivable, and receiving cash from customers, thus ensuring that the company collects payments and maintains healthy cash flow.

Step-by-step explanation:

The B/AR/C process refers to Billing, Accounts Receivable, and Cash receipts, which are integral components of the order-to-cash process within a business context. The order-to-cash process is part of a company's working capital management and is crucial for maintaining healthy cash flow. It begins when a customer order is received and ends when the company collects payment for that order, ensuring the business has the necessary funds to operate and grow.

In this case, the B/AR/C process specifically addresses the latter half of that journey by focusing on:

1. Handling billing, which involves issuing invoices to customers for products or services delivered.
2. Managing accounts receivable, which includes monitoring customer payments, managing credit policies, and pursuing overdue accounts.
3. Cash receipts, which pertains to the actual collection of cash from customers, often recorded and reconciled against outstanding receivables.

Therefore, the correct answer to the question presented is c) Handling billing, accounts receivable, and cash receipts, as this combination of activities completes the order-to-cash process by ensuring that the company receives payment for the goods and services it provides to customers.