Financial Operations Hub

Vendors and their invoiced customers use dynamic discounting without involving sources of third-party financing. When the customer pays vendor-selected invoices for which a dynamic discount is offered, they earn a calculated early payment discount based on the day they pay the supplier invoice. The earlier they pay, the higher the early payment discount the customer receives.

If your cash flow analysis shows you are running low on cash, a business can make quicker and more informed decisions. It can adapt by cutting costs, obtaining financing, or increasing income. This is what makes examining cash inflows and outflows one of the most important aspects of maintaining a proactive accounting strategy.

Operational efficiency is the ratio of a company’s input and output, which determines a system’s overall performance. It’s a measure of how much costs are incurred during a financial activity. In this sense, lower costs equate to greater efficiency.

Every time you run payroll, there will be expenses a business owes but has not paid. These are called payroll liabilities and can include employee compensation (earned but not yet received), taxes withheld, expenses (like Social Security and Medicare taxes), and other payroll-related costs.

Balance sheets are one of the core financial statements presented in business plans and financial models for analyzing potential M&A transactions and establishing a valuation. These balance sheets are prepared with assumptions as estimated projections of future assets, liabilities, and shareholders’ equity.

An inventory management system tracks an item from the moment of purchase through its time of use. The best methods include detailed records of all materials to optimize inventory levels and ensure availability across multiple channels.

Income statements are important for assessing a company’s financial performance. Businesses can manage revenue and expenses in the financial plan and budget with variance analysis. Companies use Income statement projections to model and set financial goals.

Horizontal and vertical integration are important parts of a company’s M&A strategy to increase return on investment, attain rapid global growth, gain new technologies and talent, improve supply chain and product quality and timeliness, improve distribution, and find opportunities to reduce costs.

Closing the books each month can be a tedious process, but it is vital to ensuring the financial health of your company. The month-end close can help you identify deviations from your financial plan early, so you can respond quickly. Conversely, it can uncover new opportunities for business growth, and drive strategies so you can exploit them.

By implementing business growth and cost reduction strategies, management can change the break even point for your business calculated by financial analysts. The break even point can also change in response to external factors like inflation resulting in product cost increases, a recession, and increased competition. You have less control over the external factors.

The profit margin is a financial ratio used to determine the percentage of sales that a business retains as earnings after expenses have been deducted. For example, a 20% profit margin indicates that a business retains $0.20 from each dollar of sales that it makes. By factoring in business expenses, the profit margin determines how well a company is able to manage expenses relative to sales, which makes it a good indicator of a company’s profitability and overall financial health.

Understanding financial statements is essential for accounting and finance team members, CEOs, business owners, creditors, and shareholders. This article provides financial statement basics and some more advanced concepts for complex companies.

Working capital is the lifeblood of any business. You need it to fund daily business operations, cover expenses, and finance business expansion.
Working capital requirements can vary by industry. A manufacturer may need third-party funding for working capital since it generates revenues only after products are sold. The up-front funding allows the company to purchase the raw materials for productionEven better is the supermarket that can get suppliers to stretch terms to 75 days, which they could negotiate in exchange for expanding shelf space for a product line.

Financial technology is advancing globally to improve and create financial applications with AI/ML-driven, algorithmic digital technology. FinTech significantly expands the types of financial data used. It enables insights, automated decisions, and actions for businesses and consumers.

You want to integrate as seamlessly as possible with existing accounting and ERP systems. However there are many key steps along the supplier payment process that still require significant manual effort beyond sending out payment instructions to the transfer API for bank, ACH, and wire services.

The accounting equation is a formula computed as total Assets = Liabilities + Equity. The basic accounting equation originates with double-entry bookkeeping. It ensures that the accounting books are in balance. The source of a company’s accounting equation numbers is its balance sheet. Equity can be Shareholders’ Equity, Stockholders’ Equity, or Owner’s Equity. 

In this article, we will look at the benefits of business process outsourcing, discuss the best practices for selecting an external provider, and examine what sort of issues can arise during the implementation of an outsourcing contract.

ROI is a useful financial percentage metric measuring stock and portfolio investments’ positive or negative performance. ROI can also be applied to evaluating business investment projects, especially when the returns can be quickly realized on an investment.

This guide provides an overview of ICFR meaning and objectives, internal control, ICFR requirements for public companies, and links to other helpful ICFR resources. If your company has the growth potential for going public, you’ll be ready to meet ICFR requirements.

The acid test ratio is a more stringent financial ratio than the current ratio. Acid test ratio doesn’t include inventory and prepaid assets in the numerator, as does the current ratio.

Invoice factoring is a financing option where you sell some or all of your outstanding invoices, or accounts receivable, to a third-party to improve your cash flow. The third-party factor will charge a fee, also known as a discount, for providing the service.

There are a lot of general arguments to make for the fintech market and working this into your business model. When it comes to market share and data analysis, the numbers always come out on top.

International payroll, including payments to employees and independent contractors like freelancers, is a complex process that requires expertise. International payroll consultants and services provide valuable insights into country payroll policies and how to pay international employees.

Accrued revenue is an asset account that could be accounts receivable to record revenue that’s earned before cash is received, under the generally accepted accounting principles (GAAP) accrual basis of accounting. GAAP accounting standards, including ASC 606 for revenue recognition in corporate finance, are based on the revenue recognition principle that defines when revenue is earned.