Accounts Payable (AP, Payables)
Accounts payable” (AP) refers to an account within the general ledger that represents a company’s obligation to pay off a short-term debt to its creditors or suppliers. Another common usage of “AP” refers to the business department or division that is responsible for making payments owed by the company to suppliers and other creditors.
Accounts Payable (AP) Finance
Accounts payable finance (see supply chain finance) refers to lending that concentrates on the payment of supplier invoices. It enters into the working capital cycle at an earlier point in the supply chain than other finance products, providing funds as and when required to fund opportunities, and pay suppliers and other creditors.
Accounts payable finance relies on the ability of the buyer business to repay the credit supplied, and does not rely on supplier or customer capacity or credit status. Businesses can take as much cash as required up to their assigned credit limit in order to pay whatever supplier invoices they choose. at a predetermined time of their choosing. Credit is usually offered up to 120 days and, once repaid, the revolving facility can be used, repaid and reused in line with the business cash needs.
Accounts Receivable (AR, Receivables)
Accounts receivable (AR) is the balance of money due to a firm for goods or services delivered or used but not yet paid for by customers. Accounts receivables are listed on the balance sheet as a current asset. AR is any amount of money owed by customers for purchases made on credit.
Accounts Receivable (AR) Finance
Accounts receivable (AR) financing is a type of financing arrangement in which a company receives financing capital related to a portion of its accounts receivable. Accounts receivable financing agreements can be structured in multiple ways usually with the basis as either an asset sale or a loan.
The Automated Clearing House (ACH) Network is an electronic funds-transfer system run by the former National Automated Clearing House Association (NACHA) since 1974.
The ACH payment system provides ACH transactions for use with payroll, direct deposit, tax refunds, consumer bills, tax payments, and many more payment services in the U.S.
Advance / Early Payment
Advance/early payment is a type of payment made ahead of its normal schedule such as paying for a good or service before you actually receive it. Advance payments are sometimes required by sellers as protection against nonpayment, or to cover the seller’s out-of-pocket costs for supplying the service or product.
There are many cases where advance payments are required. Consumers with bad credit may be required to pay companies in advance, and insurance companies generally require an advance payment in order to extend coverage to the insured party.
In the context of accounts receivable finance, an advance rate is the percentage of an invoice that a lender will advance upfront, typically between 70-90 percent.
Asset-based lending is the business of loaning money in an agreement that is secured by collateral. An asset-based loan or line of credit may be secured by inventory, accounts receivable, equipment, or other property owned by the borrower.
The asset-based lending industry serves business, not consumers. It is also known as asset-based financing.
In finance, assignment is the transfer of ownership or interest in a payment obligation between two or more parties.
In finance, availability refers to the total amount of money available to a client by a lender. Clients can transfer these funds into their company bank account at any time.