A balloon payment is the final amount due following a repayment structure that has a series of smaller monthly payments, with a larger lump sum due at the end of the loan term. Monthly payments can be interest-only or include principal, and the remaining principal amount is to be repaid in full with the last…
What is
At-will Employment: Ultimate Guide for Small Businesses
Employment at-will allows employers to terminate employees without cause (meaning for any legal reason or no reason at all), provided that the termination doesn’t violate anti-discrimination or other employment statutes. It also allows employees to leave a company at any time, for any reason, provided there are no other restrictions on their employment. This gives…
Do You Need a Business Savings Account? 7 Key Benefits
Creating a dedicated business savings account is a great way to start building funds for emergencies, taxes, and other business goals. Business savings accounts are Federal Deposit Insurance Corp. (FDIC)-insured to keep your money safe and offer higher interest rates to help grow your balances. Without a savings account to separate your savings from your…
What Is the Cash Ratio & How to Calculate It?
The cash ratio measures a company’s ability to pay its short-term debts using only cash and cash equivalents. It’s one of many financial ratios that investors and lenders use to measure the health of a business and the risk of lending it additional money. The cash ratio is calculated by taking the sum of a…
What Is a Deposit in Transit on a Bank Reconciliation?
A deposit in transit is a cash deposit that a business has recorded in its books but the bank hasn’t processed it and posted it to the corresponding bank account. Think of it like a package you’ve shipped. Once you hand it over to the shipping carrier, it’s “in transit” until it reaches its destination….
What Is Goodwill in Accounting? Factors & Calculation
Goodwill is an intangible asset that arises from a business combination. When one company purchases another, the acquiring company often pays more than the value of the acquired company’s net assets. Think of it like selling a product—if you want to make a profit, you need to charge more than what the product costs to…
Salary Survey: Ultimate Guide for Small Businesses
What Is a Salary Survey A salary survey is a benchmarking tool to help you collect and analyze employee compensation data, such as wages and benefits. These surveys are conducted with different employers to determine pay levels for specific jobs in the organization. For better data comparison, the surveys are usually carried out by region,…
10 Cash Flow Management Tips for Small Businesses
By following our 10 cash flow management tips for small business operations—including not paying bills until due, utilizing a credit line, investing excess cash, establishing a petty cash fund, and determining your cash conversion cycle—you can meet short- and long-term cash requirements and optimize return on idle funds. Cash flow management is important for all…