Which action occurs last in the cash flow cycle?

Prepare for the CIPS Defining Business Need (L4M2) Test with multiple choice questions and insightful explanations. Enhance your understanding and ensure success!

The action that occurs last in the cash flow cycle is to receive funds from customers. This step is crucial because, after a business has successfully created and stored products, and after it has paid suppliers for raw materials or goods, the final step is the realization of revenue. This is when customers purchase the finished products and consequently the business receives funds in exchange.

Receiving funds is the culmination of previous processes which include manufacturing products, storing them in inventory, and ultimately paying suppliers for the resources used to create those products. Only after all these steps are completed can a business effectively realize the profits from its sales, making it the concluding action in the cash flow cycle.

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