What is the result of a well-managed trade payables payment period?

A well-managed trade payables payment period leads to improved cash flow by allowing an organization to time its payments effectively. When a business extends its payment terms with suppliers while ensuring that it maintains good supplier relationships, it can hold onto cash longer. This strategy provides the company with greater flexibility in managing its working capital, enabling it to use available cash for operations, investments, or to cover unexpected expenses.

Moreover, efficient management of trade payables aligns payment schedules with cash inflows, ensuring that the business does not strain its liquidity. By maintaining an optimal payment period, a company can balance its obligations and ensure that it meets its financial commitments without compromising its operational needs.

In contrast, focusing on other outcomes like higher profitability or increased revenue does not directly relate to the management of trade payables and would typically depend on a broader strategy involving pricing, cost management, and sales activity. Decreased liabilities, while potentially a result of reduced trade payables, is not a direct outcome of managing the payment period effectively; it's more about managing overall business obligations.