What do we call the arrangement where a supplier allows a customer to delay payment for goods or services?

The arrangement where a supplier allows a customer to delay payment for goods or services is known as trade credit. This practice is beneficial for businesses as it helps them manage their cash flow more effectively. With trade credit, customers can obtain the necessary goods or services immediately without having to pay upfront, thus allowing them to sell the products and generate revenue before the payment for those goods is due.

Trade credit also fosters good relationships between suppliers and customers, as it provides flexibility for the customer while helping suppliers maintain business by increasing their sales. This arrangement is commonly used in various industries and is an important aspect of managing business operations.

Other options like net cash flow refer to the net amount of cash being transferred in and out of a business, insolvency refers to a situation where a business is unable to meet its financial obligations, and cash flow forecast is a projection of cash inflows and outflows over a specific period, which are distinct concepts from the arrangement of trade credit.