Payment processors are responsible for obtaining authorization for credit and debit card transactions. Payment processors instruct the financial institution as card issuer to pay the acquirer bank on behalf of its cardholder customer, using secure, encrypted information. Then the acquirer pays the merchant through their designated merchant account, which is a bank account.
Vendor fraud schemes are one of the major challenges businesses face today. Fraud and billing schemes have ruined the financial fortunes of many, and have threatened the survival of some.
To effectively combat vendor fraud, organizations need to know how to identify them, practice due diligence, and establish effective internal controls.
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.
Net 45 is an important credit term because it allows customers to pay 15 days later than the more common payment terms of net 30. Net 45 could give well-financed businesses a competitive advantage if they’re willing to take the risk and tie up their cash in accounts receivable longer or offer an early payment discount combined with the net 45 credit terms.
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.
Enterprise risk management helps a company anticipate, detect, and respond to change. Risk assessment includes potential risks, new risks, and changes to existing business risks. Change creates both threats requiring lessening of downside risks and lucrative opportunities to pursue. ERM methodology builds resilience.
A procurement strategy is the blueprint for implementing a procurement process. It considers everything from building a supply chain, the systems for initiating and tracking purchases, managing costs and risks, and evaluating results. The goal is to quickly match buyers with contracted suppliers, streamline transaction processing, eliminate errors, minimize risk, and effectively manage corporate expenses.
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.
Payment terms are specifications of amounts owed, how, when, and where payments are due on sales transactions between sellers and buyers. Payment terms from a contract or purchase order are included on an invoice to the customer. Although payment terms may be negotiated, often the seller sets payment terms for routine sales transactions.
Open banking is a driving force for digital transformation, using shared electronic financial data.
It provides lucrative business model opportunities for third-party Fintech app and financial services industry providers. Open banking gives global consumers and business users new products, valuable information, and payment services when they share banking data.