Final answer:
An acceptable explanation for not taking discounts when settling accounts payables could be the company's policy or practice of prioritizing long-term supplier relationships over immediate cost savings.
Step-by-step explanation:
An acceptable explanation for not taking discounts when settling accounts payables could be the company's policy or practice of not taking advantage of early payment discounts. Some companies prioritize maintaining positive relationships with suppliers over reducing costs. By not taking discounts, the company may feel it is showing trust and support to their suppliers, which could lead to better pricing or preferential treatment in the future.
This approach may be more common among financially stable companies that prioritize long-term supplier relationships and do not prioritize immediate cost savings. However, it is important for the president of Harter Company to assess the potential impact of this decision on the company's financial health and evaluate whether there are opportunities for cost savings without jeopardizing important supplier relationships.
For example, the president could analyze the cost savings potential by calculating the total discounts that could have been obtained and comparing them to the impact on the company's financial statements. They should also consider alternative negotiation strategies to achieve supplier concessions without relying solely on discounts for early payment.