Business Finance Flashcards
2 prepayments for a pizza delivery business
Rent of the shops= normally paid in advance
Insurance = for equipment such as delivery vans
2 problems with high trade payable days ratio
-future cash flow problems = a growing amount of money owed to suppliers
-loss of supplier goodwill = the supplier may decide not to supply the business in the future if not being paid
Give 2 advantages of crowdfunding
-Access to capital income
- publicity and awareness
Trade payable
The amount of money a business owes to its suppliers
Trade receivable
Money owed to the business by customers for products or services
Discount allowed
Given to customers who pay the outstanding amount within in specific period of time
Discount received
Given to the business by suppliers when it pays the amount within a specified period of time
Invoice discounting
A company lends you money of your unpaid invoices from customers .
Debt factoring
A business sells its outstanding invoices to a third party to exchange for immediate cash
