The FinFloh Blog

Every finance team knows the feeling. You send an invoice or a payment reminder… and then the replies start flooding in. “Here’s the payment proof.”“Can you resend the invoice?”“There’s a mistake on line item 3 –  please fix.”“We’ll pay by next week, not this one.” Whether it comes through email or chat, your AR team […]

It’s a story finance teams know all too well. The collections team is following up consistently. Escalations are happening on time. Every interaction is logged and tracked. And yet – Days Sales Outstanding (DSO) refuses to budge. For many mid-market and enterprise finance teams, this stagnation feels baffling. On paper, everything seems to be running […]

Credit Risk Reduction Definition : Credit risk reduction refers to the strategies and practices implemented by businesses to minimize the likelihood of financial losses due to unpaid debts or defaults from clients, customers, or partners. In the context of accounts receivables, credit risk reduction is essential for maintaining cash flow, securing profits, and ensuring long-term […]

Credit Risk Scoring Model Definition : A Credit Risk Scoring Model is a mathematical tool used by lenders, financial institutions, and credit agencies to evaluate the likelihood of a borrower defaulting on a loan or credit obligation. This model assigns a numerical value, or “credit score,” based on an individual’s or business’s creditworthiness. It considers […]

Credit Sales Definition : Credit sales refer to transactions in which a business allows its customers to purchase goods or services without paying immediately. Instead, the customer agrees to pay the business at a later date, typically within a specific time frame. This practice is common in industries where businesses want to build customer loyalty […]

Credit Scoring Engine Definition : A Credit Scoring Engine is a sophisticated algorithm-driven system designed to evaluate the creditworthiness of individuals or businesses. It leverages a wide range of data points, including financial history, transaction behavior, and other relevant factors, to calculate a credit score that reflects the likelihood of a borrower repaying their debt. […]

Credit Union Definition : A credit union is a nonprofit, member-owned financial cooperative that provides a wide range of financial services. Unlike traditional banks, which are typically for-profit institutions, credit unions operate with the primary goal of serving their members. As a member, you become a part-owner, giving you a say in the credit union’s […]

Current Liabilities Definition : Current liabilities are a company’s short-term financial obligations that are due within one year or within the normal operating cycle of the business—whichever is longer. These liabilities typically arise from a company’s day-to-day operations and are settled using current assets, such as cash or accounts receivable. In accounting, managing current liabilities […]

Current Yield Definition : Current yield is a financial metric used to measure the annual income (interest or dividends) generated by a security—most commonly bonds or dividend-paying stocks—relative to its current market price. It is expressed as a percentage and provides investors with a quick snapshot of the income return they can expect from an […]

Customer Master Definition : A Customer Master is a central repository of detailed and structured information about a company’s customers. It acts as a comprehensive, authoritative database that consolidates all customer-related data in one place, allowing businesses to have a single view of each customer across various systems. The Customer Master is vital for streamlining […]

Doubtful accounts refer to outstanding accounts receivable that a business believes may not be fully collectible due to a customer’s potential inability or unwillingness to pay. These receivables are not yet written off as bad debts but are considered risky and uncertain in terms of collection. Businesses typically identify doubtful accounts during the normal course […]

Profit and Loss (P&L) Definition : The term Profit and Loss (P&L), also known as the Income Statement, is a financial document that provides a summary of a company’s revenues, expenses, and profits or losses over a specific period. This crucial statement is used by businesses, investors, and analysts to assess a company’s financial performance […]