What potential issue can arise from delayed cheque payments for a company?

Study for the BAFT Certificate in Principles of Payments Test. Utilize flashcards and multiple-choice questions, with hints and explanations for each query. Prepare thoroughly for your exam!

The potential issue that can arise from delayed cheque payments for a company is negative cash flow. When a company issues cheques to pay for goods or services, a delay in these payments can lead to funds not being released on time. This situation creates an imbalance where the company's outgoing cash may exceed its incoming cash during the period of delay.

Negative cash flow can have several repercussions, such as affecting a company's ability to meet its financial obligations, pay suppliers, or invest in new operations. It may also lead to the need for short-term financing solutions, potentially increasing costs related to borrowing.

Additionally, unlike the other options, which suggest positive outcomes, delayed cheque payments primarily lead to financial strain rather than improvement in sales, employee satisfaction, or supplier relationships. Therefore, the correct answer highlights the significant concern of managing cash flow effectively to maintain company stability and operational efficiency.

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