The invoice factoring service has several advantages and disadvantages. Allowing the company to get cash immediately is its main advantage. However, using the services of a factoring company requires the company to spend money to pay
Accounting and Finance
Invoice Factoring: Meaning, Importance, How it Works
What's it: Invoice factoring is a financing arrangement in which a company sells its invoices receivable to a finance company (called a factor or factoring company) in exchange for liquidity. The factoring company will pay cash from
Breakeven Point: How to Calculate, Benefits, Pros, Cons
What's it: The breakeven point is the point where revenue equals total costs. At that point, the company's sales level is not high enough to profit but not low enough to incur a loss. Why is the breakeven point
Company Funding: Purposes, Types of Sources
What’s it: Company funding is an injection of money from funders to companies. Sometimes, we also refer to it as corporate financing. In general, two sources of funding: equity and debt. We refer to equity funders as stock
Operating Leverage: Why It Matters, How to Calculate it
What's it: Operating leverage shows you the extent to which a company's operating costs are dependent on fixed operating costs. If the company has high leverage, it shows that the company has a significant proportion of fixed costs.
Activity-Based Budgeting: Meaning, Steps, Simple Examples, Pros, Cons
What's it: Activity-based budgeting is a budgeting method by quantifying only key business activities and their associated costs. In the process of allocating money, the company maps critical activities to achieve company goals. Then,
Full Costing: Meaning, Components, Pros, and Cons
What's it: Full costing is a cost accounting technique that considers all the costs of producing a single unit of product, whether fixed or variable overhead. These costs include direct material costs, direct labor costs, and all
Top-Down Budgeting: Meaning, Stages, Advantages, and Disadvantages
What's it: Top-down budgeting is a budgeting approach in which top executives set a budget and then pass it on to managers for implementation. Budgeting will be following the targets and objectives to be achieved by
Business Risk: Meaning, Types, Sources, Impacts
Competition has become more dynamic in recent years, increasing the business risk for many companies. The business environment is rapidly changing. And it causes some challenges and problems. What is the business risk Business risk is