What are Debits and Credits in Business Accounting? In accounting, journal entries are used to record financial transactions. Credits increase liability or equity accounts while decreasing asset accounts. On the contrary, a debit entry boosts asset accounts and reduces liabilities or equity accounts. The fundamental accounting principle is the accounting equation, which states that assets equal liabilities plus equity. When accountants credit revenue, they increase either the equity or liability side of the equation. Likewise, when expenses are debited, assets decrease while either liabilitie ..read more

What is a Business Credit Card? Business credit cards are financial tools for small business owners to manage expenses. These cards operate similarly to personal credit cards but are specifically tailored for business purposes. They offer benefits such as higher credit limits and rewards tailored to business needs. Business credit cards allow for easy tracking of business expenses, separating them from personal finances. They also offer additional features like the ability to issue employee cards, helping streamline expense management within a company. Moreover, these cards often come with pe ..read more

What is an Annual Percentage Yield (APY)? An Annual Percentage Yield (APY) represents the total interest earned on an account, including compound interest. APY can accumulate on savings or checking accounts from a bank or credit union. It’s crucial for individuals to understand how APY works to make informed financial decisions. Calculating APY involves considering factors such as the initial investment, interest rate, and compounding frequency. By using the formula: APY = (1 + (r/n))^n – 1, where r is the annual interest rate and n is the number of compounding periods per year, one can deter ..read more

What is Chick-fil-A? Chick-fil-A is a very popular and well-known American fast-food restaurant known for its chicken sandwiches and dipping sauces. The company has a massive marketing presence and a loyal customer base. It’s quite common to see Chick-fil-A drive-thru lines wrapped around the block. The company boasted annual sales of $21.58 billion in 2023, up from $18 billion in 2022. Since the company’s founder, Truett Cathy, launched the business in 1946, it’s grown to over 2,600 Chick-fil-A restaurants nationwide. The company is also known for a heavy religious bent, which may or may not ..read more

What does it mean to Sell a Business to a Competitor? Selling a business to a competitor involves transferring ownership and control to another company in the same industry. This move can strengthen the market position by merging resources, customer bases, and expertise. Benefits include increased market share, access to new technologies or markets, and operational efficiencies. However, challenges may arise from integrating corporate cultures, regulatory issues, or customer and employee backlash. It’s crucial to carefully weigh the pros and cons before making this strategic decision. Competi ..read more

What is an Independent Sales Organization (ISO)? An independent sales organization (ISO) is a third-party company that partners with payment processors to facilitate transactions for merchants to accept credit cards and other noncash payments. They offer personalized payment processing services tailored to each merchant’s specific needs and requirements. Merchants must carefully assess an ISO’s reputation and track record before entering into a partnership to ensure smooth transactions and reliable support. Working with a reputable ISO can lead to better outcomes, while a less reliable one ma ..read more

What is Collateral in Small Business Financing? Collateral in small business financing refers to assets or property that a borrower pledges to a lender as security for a loan. Quality collateral can include real estate, equipment, inventory, or accounts receivable. This provides the lender with assurance that if the borrower defaults on the loan, they can seize the collateral to recoup their funds. Entrepreneurs and small business owners often need financing to start or grow their businesses. Lenders or other financial institutions may require collateral to mitigate the risk of lending money ..read more

What is Business Credit for Property Investors? Business credit refers to a company’s financial history and ability to borrow money, reflected on the business credit report. The major business credit bureaus produce business credit scores to help creditors determine an enterprise’s creditworthiness. Property investors often use this credit to purchase real estate or finance other activities like renovations, marketing, etc. Unlike personal credit, business credit is tied to the company, not the individual. Establishing strong business credit typically allows investors to access higher credit l ..read more

What does Loss Payee mean in business financing? In business financing, a loss payee designation, also called a standard loss payable provision, is an individual or entity that receives a loss payment in case of damage or loss to the insured property. When a lender is listed as a loss payee, they have the right to receive insurance proceeds before the borrower if a covered loss occurs. Suppose you pledge property as security for a business loan. In that case, the lender will request that you obtain insurance to safeguard the pledged assets, including machinery, real estate ..read more

What is a Financial Affiliate Program? Financial affiliate programs are partnerships between financial companies and affiliates who promote their products or services in exchange for a commission. Affiliates can be individuals or businesses who drive traffic to the financial company’s website through various marketing efforts such as blog posts, social media promotions, or email campaigns. When a visitor purchases or signs up for a service through the affiliate’s unique link, the affiliate earns a commission. Types of financial affiliate programs include: Credit card affiliate programs: Affi ..read more