The FinFloh Blog

Budgeting Definition : Budgeting is the process of creating a structured plan to allocate financial resources, manage expenses, and track income over a specific period. It serves as a financial roadmap that helps individuals, businesses, and organizations achieve their financial goals by ensuring controlled spending, optimized savings, and improved cash flow management. Effective budgeting is […]

Bonds Payable Definition : Bonds Payable refer to long-term financial obligations that a company or government entity issues to raise capital. These bonds represent a formal agreement to repay the borrowed amount, known as the principal, along with periodic interest payments, over a predetermined period. Classified as a liability on the balance sheet, bonds payable […]

Average Maturity Definition : Average Maturity refers to the weighted average time until the principal amount of a set of financial obligations, such as loans, bonds, or accounts receivables, is due for repayment. It is a crucial metric in financial management, helping businesses and investors assess the risk and liquidity associated with outstanding debts or […]

Average Days Delinquent (ADD) Definition : Average Days Delinquent (ADD) is a key accounts receivable metric that measures the average number of days an invoice remains overdue past its due date. It helps businesses assess how effectively they collect outstanding payments and manage credit risk. Table of Content : Why is ADD Important for Businesses? […]

Automatic Lockbox Definition : An Automatic Lockbox is a banking service that digitizes and automates the processing of check payments, enabling businesses to streamline their accounts receivable operations. It is an advanced version of a traditional lockbox system, where incoming payments are collected at a secure P.O. box and processed by a financial institution. The […]

Automated Risk Assessment Software Definition : Automated Risk Assessment Software is a technology-driven solution that evaluates, analyzes, and predicts potential financial, operational, or compliance-related risks within an organization. Using artificial intelligence (AI), machine learning (ML), and data analytics, this software automates the traditionally manual process of risk assessment, enhancing accuracy, speed, and decision-making efficiency. In […]

Automated Correspondence Definition : Automated Correspondence refers to the use of technology, such as artificial intelligence (AI) and robotic process automation (RPA), to streamline, schedule, and send communications without manual intervention. This system is commonly used in accounts receivable (AR) management to handle invoicing, payment reminders, dunning letters, and customer follow-ups efficiently. By automating repetitive […]

Automated Clearing House Definition : The Automated Clearing House (ACH) is an electronic payment network that facilitates seamless financial transactions between banks in the United States. Operated by Nacha (National Automated Clearing House Association), ACH enables businesses, individuals, and government entities to process payments efficiently, securely, and at a lower cost than traditional paper-based methods. […]

At-Risk Account Definition : An At-Risk Account refers to a customer account that shows signs of potential non-payment, late payment, or disengagement, putting a business’s revenue at risk. These accounts often exhibit warning signals such as chronic late payments, reduced communication, declining transaction volumes, or disputes over invoices. Identifying at-risk accounts early is critical for […]

Assets in Accounting Definition : In accounting, assets refer to any economic resources owned or controlled by a business that provide future financial benefits. These resources can be tangible (physical) or intangible (non-physical) and are recorded on a company’s balance sheet as part of its financial position. Assets are fundamental to business operations, representing everything […]

Asset-Based Lending Definition : Asset-Based Lending (ABL) is a financing method where businesses secure loans or lines of credit using their assets as collateral. These assets typically include accounts receivable, inventory, equipment, or real estate. ABL is widely used by companies that need immediate working capital but may not qualify for traditional loans due to […]

AR Collection Solutions Definition : AR Collection Solutions, or Accounts Receivable Collection Solutions, refer to the tools, strategies, and services that businesses use to manage overdue invoices and recover outstanding payments from customers. These solutions streamline the collections process, enhance cash flow, and reduce the risk of bad debt by automating follow-ups, tracking payments, and […]