FitSmallBusiness

What is

Purchase Order Financing: What It Is & How It Works

Purchase order (PO) financing is a form of short-term financing that involves a creditor paying your supplier for goods or services to be delivered to your customers.

By July 15, 2024 | Financing, What is

For businesses without the resources to fulfill orders, PO financing can help avoid turning away customers or processing delays if you have insufficient funds or limited stock. Take note that it requires that you sell finished goods to either a business (B2B) or the government (B2G). The process is simple—the financing company reviews the order,…

What Does Code 806 Mean on an IRS Transcript?

By July 15, 2024 | Taxes, What is

IRS Code 806 represents the tax withheld during the year on your behalf, generally on Form W-2 or 1099. Tax withholding is typically done by an employer or brokerage account administrator and acts as a prepayment of the tax that the IRS may assess when your tax return is filed. The Code 806 amount on…

Quick Ratio: What It Is & How to Calculate It [+ Calculator]

By July 15, 2024 | Financing, Free Resources, What is

The quick ratio, also known as the acid-test ratio, calculates a company’s ability to cover its current liabilities by means of its current assets. It is a liquidity ratio used by a company’s stakeholders, investors, and lenders and takes a company’s quick assets—which are current assets minus inventory and long-term receivables—and divides them by current…

Certificate of Liability Insurance: What It Is & How to Request One

By July 15, 2024 | Insurance, What is

A certificate of insurance (COI) is a document that provides proof of insurance. It includes policy details like your specific coverage, limits, and effective dates, but it is not an insurance contract. Companies often require businesses they partner with to carry liability insurance because they don’t want to risk being held solely responsible. In those…

What Is ChexSystems & How Does It Impact Your Business?

By July 11, 2024 | Banking, What is

ChexSystems is a reporting agency that monitors business and consumer deposit account activity. It operates similarly to credit reporting agencies when producing a credit score. If you have negative bank activity—such as bounced checks, overdrawn balances, and fraudulent or suspicious activities—these will appear on a ChexSystems report. Negative items on a report can keep you…

What Is a Receiving Report? Example, Purpose & Types

A receiving report (RR) is a formal document used to record the arrival and condition of goods ordered from a supplier.

By July 11, 2024 | Accounting, What is

An RR is essentially a confirmation and record of what was received against what was ordered and acts as a verification document before the accounts payable (A/P) department processes payment to the supplier. It ensures the goods were received as ordered before releasing funds. Receiving Report Example In our RR example above, Roy’s Burger House…

What Is Auto Lease Inclusion & How to Calculate

The auto lease inclusion is a reduction to allowable automobile lease payment deductions.

By July 10, 2024 | Taxes, What is

While the naming convention implies that something is included in income, the auto lease inclusion is a calculated amount by which lease payment deductions are reduced. The reduction is triggered if the lease duration is 30 days or more and the fair market value (FMV) of the vehicle exceeds the threshold amount that the IRS…