leading and lagging

Definition

Accounting technique of expediting (leading) or delaying (lagging) receipts and payments of cash to gain a business advantage. In foreign trade, for example, if a manufacturer has to pay $1 million on a certain date for imported material and receives an export order for $1 million, it might try either to delay the payment for imports or to press for an early payment by the buyer, or both, so that the cash inflow from export is used as cash outflow for imports. It will thus try to escape devaluation risk in import-payment and default risk in export-receipt by juggling two cash flows.
Similarly, in transactions between the subsidiaries of the same firm, receipts and payments of cash may be delayed or expedited to defer taxes.

Use leading and lagging in a sentence

We did some late date leading and lagging with the purchases from Alibaba to make the purchases solely with the clients' funds.

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LEADING AND LAGGING Accounting technique of expediting (leading) or delaying (lagging) receipts and payments of cash to gain a business advantage.

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Leading and lagging transfer often require more work from the office accountant and support staff as additional work may be required in order to assure there are funds in the office accounts when needed.

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leaders leading indicator