Showing papers on "Accounts payable published in 2012"
TL;DR: In this article, Michalski et al. presented a model of financial liquidity management in NPOs from the perspective that claims the basic financial aim of an NPO is the most financially effective realization of the mission, resulting in the donors' support for the organization.
Abstract: This paper contributes to the discussion about nonprofit organizations’ (NPO) model of financial management in the accounts receivable area. In fact, when it is judged from a technical point of view, the opinion that nonprofit financial management do not differ from a for-profit business could be justified, and is known in nonprofit financial management discussion (Jegers 2011; Hansmann, 1987). But that point of view is only partially right. Sloan et al. and Wedig et al. implemented with modifications a financial management portfolio theory to NPO financial management (Sloan et al., 1988; Wedig 1994, Wedig et al. 1996, Jegers, Verschueren, 2006). In the paper, the model of financial liquidity management in NPOs is presented from the perspective that claims the basic financial aim of an NPO is the most financially effective realization of the mission, resulting in the donors’ support for the organization (Leone, Van Horn, 2005; Eldenburg et al., 2011). It is close in many points to the maximization of for-profit firms’ values, but in fact it has many differences, and non-profit entrepreneurship could attract entrepreneurs more than for-profit organizations (Michalski, 2012; Chapelle, 2010). The net working capital requirements and the elements shaping it, such as the level of cash tied up in accounts receivable, inventories, the early settlement of accounts payable, and operational cash balances, is one of the fields where a difference could be seen. Not many NPOs have to deal with all aspects of liquidity decisions or current assets management. Like for-profit organizations, some of them use only cash from current assets, redistributing it from donors to beneficiaries. Other NPOs collect free-of-charge goods for resale, using this income to realize their mission. Many NPOs are almost identical in operating processes with for-profit businesses, but are nonprofit because of their main mission.An NPO’s management team’s decision about the accounts receivables policy is a balance between gaining new customers by way of a more liberal organization’s trade credit policy and limiting the risk of allowing for delayed payment from unreliable purchasers. That kind of decision shapes the level and quality of accounts receivables (Michalski, 2012). Paraphrasing Keith Smith and James A. Gentry’s observations, it is possible to observe that Robichek et al. (Gentry, 1988; Robichek et al., 1965; Smith, 1973) talk about the risk involved to accounts receivable decisions which must be accepted by financial institutions’ pledging of accounts receivable of the firm. Keith Smith (Smith, 1973; Gentry, 1988) predicted and Michalski (Michalski, 2008) showed how a portfolio theory may be used to decrease the accounts receivable risk. Current assets, and among them accounts receivables, could be viewed in the portfolio context as presented by Friedland (1966; Gentry, 1988). Pringle and Cohn (1974; Gentry, 1988) tried to adapt the CAPM theory to working capital elements. Bierman and Hausman (1970; Gentry, 1988) discuss the granting policy of an organization and shows that trade credit policy requires balancing the future sales gains against possible losses. Lewellen, Johnson and Edmister (Lewellen, Johnson, 1972; Lewellen, Edmister, 1973) explain how and why traditional devices used for monitoring accounts receivable should be changed by new and better ones. Freitas (Freitas, 1973) shows the relationship between liquidity and risk during accounts receivable management. The question discussed in that paper concerns the making of decisions by NPOs in the accounts receivables area.
39 citations
Patent•
4 Apr 2012
TL;DR: In this paper, a system and methods are provided for managing resource allocation by generating a finance-investment plan relative to one or more time intervals while maintaining a cash reserve at a predetermined threshold based on information related to financial activities including asset related activities and liability related activities.
Abstract: In accordance with aspects of the disclosure, a system and methods are provided for managing resource allocation by generating a finance-investment plan relative to one or more time intervals while maintaining a cash reserve at a predetermined threshold based on information related to financial activities including asset related activities and liability related activities The systems and methods may include evaluating accounts receivable patterns for each asset to determine cash surplus ranges within the one or more time intervals, evaluating accounts payable patterns for each liability to determine cash flow gaps within the one or more time intervals, maintaining an asset-to-liability ratio during the one or more time intervals, and generating the finance-investment plan while maintaining the cash reserve at the predetermined threshold within the one or more time intervals based on the asset-to-liability ratio and potential cash flow forecasting schemes for each asset and liability
24 citations
TL;DR: The findings of this study suggest that working capital management indeed matters for hospitals’ profitability, and efforts aimed at reducing large balances in both accounts receivable and accounts payable may frequently be worthwhile investments that have the potential to reduce the costs associated withWorking capital management and thus improve the profitability of an organization.
Abstract: Background Increased financial pressures on hospitals have elevated the importance of working capital management, that is, the management of current assets and current liabilities, for hospitals' profitability. Efficient working capital management allows hospitals to reduce their holdings of current assets, such as inventory and accounts receivable, which earn no interest income and require financing with short-term debt. The resulting cash inflows can be reinvested in interest-bearing financial instruments or used to reduce short-term borrowing, thus improving the profitability of the organization. Purpose This study examines the relationship between hospitals' profitability and their performance at managing two components of working capital: accounts receivable, measured in terms of hospitals' average collection periods, and accounts payable, measured in terms of hospitals' average payment periods. Methodology/approach Panel data derived from audited financial statements for 1,397 bond-issuing, not-for-profit U.S. hospitals for 2000-2007 were analyzed using hospital-level fixed-effects regression analysis. Findings The results show a negative relationship between hospitals' average collection period and profitability. That is, hospitals that collected on their patient revenue faster reported higher profit margins than did hospitals that have larger balances of accounts receivable outstanding. We also found a negative relationship between hospitals' average payment period and their profitability. Hospital managers did not appear to delay paying their vendors. Rather, the findings indicated that more profitable hospitals paid their suppliers faster, possibly to avoid high effective interest rates on outstanding accounts payable, whereas less profitable hospitals waited longer to pay their bills. Practice implications The findings of this study suggest that working capital management indeed matters for hospitals' profitability. Efforts aimed at reducing large balances in both accounts receivable and accounts payable may frequently be worthwhile investments that have the potential to reduce the costs associated with working capital management and thus improve the profitability of an organization.
23 citations
Posted Content•
TL;DR: In this paper, the authors used over 2.5 million observations for 600.000 firms in 8 euro area countries in the period 1993-2009 to show that firms use the trade credit channel to manage growth.
Abstract: While many theories of accounts payable and receivable are related to firm performance, there has not been a direct test whether firms actively use them to manage their growth. We argue that it is not just the accounts payable but also the accounts receivable that matter. While the former help to alleviate imperfections in the financial market, the latter do so in the product market. Using over 2.5 million observations for 600.000 firms in 8 euro area countries in the period 1993-2009, we show that firms use the trade credit channel to manage growth. In countries where the trade credit channel is more present, the marginal impact is lower, but the total impact is still bigger. Further, firms that are more vulnerable to financial market imperfections, and therefore more likely to be financially constrained, rely more on the trade credit channel to manage growth. Finally, we show that also the overall conditions of the financial market matter for the importance of the trade credit channel for growth. JEL Classification: C23, E44, G32, L25
15 citations
Patent•
26 Sep 2012
TL;DR: In this paper, a method is proposed to determine whether a payables profile of a client associated with the client device is to be modified based on the accounts payable data file and when the level of service of the client when the profile is not modified.
Abstract: A method begins by receiving an accounts payable data file from a client device The method continues by determining whether a payables profile of a client associated with the client device is to be modified based on the accounts payable data file The method continues by determining a level of service of the client when the payables profile is not to be modified The method continues processing payment transactions for accounts payable contained in the accounts payable data file on behalf of the client in accordance with the payables profile via a wide area network when the level of service is a first level of service
14 citations
Journal Article•
TL;DR: In this paper, the authors extend findings regarding the relationship between working capital management and profitability and reveal a statistically significant negative relationship among profitability (as measured through gross operating profit), the cash conversion cycle (CCC), and number of days accounts receivable (AR).
Abstract: Efficient working capital management is an integral component of the overall corporate strategy to create shareholders' wealth. This paper seeks to extend findings regarding the relationship between working capital management and profitability. A sample of 69 companies listed on the Johannesburg Stock Exchange (JSE) for the period from 1998 to 2008 was selected. The results revealed a statistically significant negative relationship among profitability (as measured through gross operating profit), the cash conversion cycle (CCC), and number of days accounts receivable (AR). The results also revealed a positive and significant relationship among profitability, the number of days accounts payable (AP), and the number of days inventory (INV). The results suggested that managers could increase their company's profitability by effectively managing the CCC and its components.
13 citations
Patent•
18 Jan 2012
TL;DR: In this article, a system and methods are provided for managing working capital by scheduling payments to be paid for accounts payable based on payments received for accounts receivable relative to one or more time intervals while maintaining a predetermined working capital reserve threshold.
Abstract: In accordance with aspects of the disclosure, a system and methods are provided for managing working capital by scheduling payments to be paid for accounts payable based on payments received for accounts receivable relative to one or more time intervals while maintaining a predetermined working capital reserve threshold. The systems and methods may include calculating accounts receivable patterns for each customer to determine a confidence level in receiving payments from each customer within the one or more time intervals, generating one or more potential payment schemes for each vendor, and generating a payment schedule for accounts payable for each vendor within the one or more time intervals based on the determined confidence level for each customer and the one or more potential payment schemes for each vendor while maintaining the predetermined working capital reserve threshold.
12 citations
7 Mar 2012
TL;DR: Tax Free Savings Account (TFSA) is a way for indivuduals who are 18 years or older to set money aside, tax free, throughout their lifetime.
Abstract: A Tax-Free Savings Account (TFSA) is a way for indivuduals who are 18 years or older to set money aside, tax free, throughout their lifetime. Rules for opening a TFSA account, how to determine the TFSA contribution room, make transfers and situations when tax is payable.
8 citations
Patent•
26 Jun 2012
TL;DR: In this paper, the factoring process involving a business client, one or more factors, and a third party (i.e., a debtor doing business with the business client) providing confirmations for the accounts receivables upon the client's request is described.
Abstract: Systems and methods are defined for facilitating the factoring process involving a business client, one or more factors, and a third-party (i.e., a debtor doing business with the business client) providing confirmations for the accounts receivables upon the client's request. The client requests confirmation of accounts receivables from a confirmation system, the confirmation system queries the debtor(s) for confirmation of their accounts payable to the client, and the confirmation system provides completed accounts receivables to one or more factors designated by the client (i.e., initially provided to the confirmation system with the accounts receivable data that initiates the confirmation process).
7 citations
TL;DR: In this article, the authors discuss the liquidity management model in Polish nonprofit organizations influenced by changes in economics and management occurring throughout managerial processes in the context of globalisation, and illustrate empirical data from over 3000 Polish NPOs.
Abstract: The basic financial aim of nonprofit organization is the most financially effective realization of the mission that cause the donors support for the organization. It is close in many points to creating of for-profit firms value. The aim of paper is to discuss the liquidity management model in Polish nonprofit organizations influenced by changes in economics and management occurring throughout managerial processes in the context of globalisation. Financial literature contains information about numerous factors that influence organization financial efficiency. Among those contributing factors is the extent of the net working capital and the elements shaping it, such as the level of cash tied up in accounts receivable, inventories, the early settlement of accounts payable, and operational cash balances. The theoretical model of financial liquidity management in nonprofit organization is illustrated by empirical data from over 3000 Polish NPOs. DOI: http://dx.doi.org/10.5755/j01.em.17.3.2107
6 citations
Journal Article•
TL;DR: In this paper, Michalski et al. presented a model of financial liquidity management in NPOs from the perspective that claims the basic financial aim of an NPO is the most financially effective realization of the mission, resulting in the donors' support for the organization.
Abstract: This paper contributes to the discussion about nonprofit organizations’ (NPO) model of financial management in the accounts receivable area. In fact, when it is judged from a technical point of view, the opinion that nonprofit financial management do not differ from a for-profit business could be justified, and is known in nonprofit financial management discussion (Jegers 2011; Hansmann, 1987). But that point of view is only partially right. Sloan et al. and Wedig et al. implemented with modifications a financial management portfolio theory to NPO financial management (Sloan et al., 1988; Wedig 1994, Wedig et al. 1996, Jegers, Verschueren, 2006). In the paper, the model of financial liquidity management in NPOs is presented from the perspective that claims the basic financial aim of an NPO is the most financially effective realization of the mission, resulting in the donors’ support for the organization (Leone, Van Horn, 2005; Eldenburg et al., 2011). It is close in many points to the maximization of for-profit firms’ values, but in fact it has many differences, and non-profit entrepreneurship could attract entrepreneurs more than for-profit organizations (Michalski, 2012; Chapelle, 2010). The net working capital requirements and the elements shaping it, such as the level of cash tied up in accounts receivable, inventories, the early settlement of accounts payable, and operational cash balances, is one of the fields where a difference could be seen. Not many NPOs have to deal with all aspects of liquidity decisions or current assets management. Like for-profit organizations, some of them use only cash from current assets, redistributing it from donors to beneficiaries. Other NPOs collect free-of-charge goods for resale, using this income to realize their mission. Many NPOs are almost identical in operating processes with for-profit businesses, but are nonprofit because of their main mission.An NPO’s management team’s decision about the accounts receivables policy is a balance between gaining new customers by way of a more liberal organization’s trade credit policy and limiting the risk of allowing for delayed payment from unreliable purchasers. That kind of decision shapes the level and quality of accounts receivables (Michalski, 2012). Paraphrasing Keith Smith and James A. Gentry’s observations, it is possible to observe that Robichek et al. (Gentry, 1988; Robichek et al., 1965; Smith, 1973) talk about the risk involved to accounts receivable decisions which must be accepted by financial institutions’ pledging of accounts receivable of the firm. Keith Smith (Smith, 1973; Gentry, 1988) predicted and Michalski (Michalski, 2008) showed how a portfolio theory may be used to decrease the accounts receivable risk. Current assets, and among them accounts receivables, could be viewed in the portfolio context as presented by Friedland (1966; Gentry, 1988). Pringle and Cohn (1974; Gentry, 1988) tried to adapt the CAPM theory to working capital elements. Bierman and Hausman (1970; Gentry, 1988) discuss the granting policy of an organization and shows that trade credit policy requires balancing the future sales gains against possible losses. Lewellen, Johnson and Edmister (Lewellen, Johnson, 1972; Lewellen, Edmister, 1973) explain how and why traditional devices used for monitoring accounts receivable should be changed by new and better ones. Freitas (Freitas, 1973) shows the relationship between liquidity and risk during accounts receivable management. The question discussed in that paper concerns the making of decisions by NPOs in the accounts receivables area.
2 Jan 2012
Posted Content•
1 Jan 2012
TL;DR: In this article, the authors analyzed the impact of bank-related household credit on Hungarian households' interest burden on their disposable income and consumption and showed that although the ratio of household credit to GDP is relatively low in Hungary in comparison to other European countries, the related interest-to-GDP ratio is high.
Abstract: During the credit boom prior to 2008, a substantial quantity of cash flowed from the banking sector to Hungarian households. With the emergence of the crisis, however, the direction of the cash flow has reversed, due to a net lending related factor and an income-related factor. First, in terms of the net lending, households turned from net borrowers to net repayers. But there is a second, less often analysed, income-related aspect of the process: the volume of interest payable by households has also increased as a result of the strong growth of credit in the pre-crisis years. This was further aggravated by the effect of the depreciation of the forint on FX loans, and, to a lesser extent, by unilateral interest rate increases by banks after 2008. As a consequence, the net interest balance of households deteriorated significantly, reducing both their disposable income and consumption. As a further novel aspect of our analysis, we also carried out an EU-wide comparison of interest burden on households. This has revealed that although the ratio of (bank-related) household credit to GDP is relatively low in Hungary in comparison to other European countries, the related interest-to-GDP ratio is high.
Patent•
30 Oct 2012
TL;DR: In this paper, a method for the electronic transmission of receipts to a central database and use of the contents thereof was proposed, at the option of the consumer to receive coupons, discounts, information and other items from manufacturers, retailers or anyone else.
Abstract: A method for the electronic transmission of receipts to a central database and use of the contents thereof. The use of the contents of the receipts by the consumer and at the option of the consumer to receive coupons, discounts, information and other items from manufacturers, retailers or anyone else. The invention relates to commerce, the internet, record keeping, retail purchases, credit card charges, banking, accounts payable and receivables, marketing, purchase incentives, coupons, etc. The receipts may be transmitted at points of sale or by companies or institutions to: a website, an e-mail account, a portable wireless device, a portable device that has a wire for input, a tablet computer, a portable computer, a memory card, stick or other device. The receipt is preserved and a copy is retrievable by the consumer.
1 Jan 2012
TL;DR: The problem of formation of income basis of budget system of the Russian Federation is imperative in modern conditions of economic redevelopment after the world financial and economic crisis as discussed by the authors, and measures to improvement the efficiency of the tax administration promoting to sustainable development of economy and different budgetary recharge are worked out on the base of the analysis of taxes payable.
Abstract: The problem of formation of income basis of budget system of the Russian Federation is imperative in modern conditions of economic redevelopment after the world financial and economic crisis. The measures to improvement the efficiency of the tax administration promoting to sustainable development of economy and different budgetary recharge are worked out on the base of the analysis of taxes payable.
Posted Content•
TL;DR: In this article, the authors deal with project finance restructuring in the view of future or present financial distress, and treat the occurrences of negative cash flow and negative NPV as signs of potential project distress.
Abstract: This paper deals with project finance restructuring in the view of future or present financial distress. We treat the occurrences of negative cash flow and negative NPV as signs of potential project distress. The solutions offered for negative cash flow are (1) restructuring debt thereby making it payable earlier when the project has sufficient cash influx or (2) change of the project management and contractors. The paper explains advantages of the first technique over the second. We explain that legal costs in the latter can exceed perceived benefits. The paper argues the best solutions for negative NPV problems are deferring of payments and restructuring of cash disbursements as a part of the project financial agreement. JEL: G31, G32
Journal Article•
TL;DR: In this paper, the authors examined the determinants of trade credit use by randomly sampled quoted firms in Nigeria and found that trade credit is influenced by depreciation provision, sales value, institutional loan, tangibility and current assets of non financial firms.
Abstract: This study examines the determinants of trade credit use by randomly sampled quoted firms in Nigeria. Panel data framework was fitted to the secondary data obtained from 70 sampled firms for the period 2000-2009. The results indicate that trade credit use is influenced by depreciation provision, sales value, institutional loan, tangibility and current assets of non financial firms. Firms should endeavour to readjust their financial structure in order to benefit from the advantages of using trade credit. Keywords : Trade credit, Account payable, Panel data, Nigeria.
1 Jan 2012
TL;DR: In this paper, the authors examined the relationship of working capital management and profitability company in food and beverage sector listed at Indonesia Stock Exchange, using regression analysis, F test and t test was conducted.
Abstract: The purpose of this research is to examine the relationship of working capital management and profitability company in food and beverage sector listed at Indonesia Stock Exchange. In order to know the relationship occur among the independent variable (Inventory Conversion Period, Days Sales Outstanding, Payable Deferral Period, and Cash Conversion Cycle) on Return on Asset using the regression analysis, F test and t Test was conducted. This research is explanatory research, in accordance with its purpose to explain the correlation and relations of some fixed variables. The sample in this research were the income statement and statement of cash flows data from Food and Beverage sector listed at Indonesia Stock Exchange. The sampling technique is Purposive sampling and the research instruments tested using classical assumption test. The hypothesis testing was using the F and t test to analyze the data to be used in Multiple Regression Analysis. The multiple regression showed that, simultaneously and partially tested Inventory Conversion Period, Days Sales Outstanding, Payable Deferral Period, and Cash Conversion Cycle. While the dominant tes shows cash conversion cycle has dominant affecting to Return on Assets. Keywords; Inventory Conversion Period, Days Sales Outstanding, Payable Deferral Period, and Cash Conversion Cycle, and Return on Assets
Patent•
23 Feb 2012
TL;DR: The automated centralized settlement system as discussed by the authors is coupled to various accounts receivable systems and the accounts payable systems, and it contains a receiving module, a processing module, and an output module.
Abstract: The automated centralized settlement system is coupled to various accounts receivable systems and the accounts payable systems. The automated centralized settlement system contains a receiving module, a processing module, and an output module. The receiving module is for the reception of accounts receivable data from a receiving party via an accounts receivable system, and of accounts payable data from a paying party via an accounts payable system. The processing module produces balance data from the accounts receivable and payable data, and the balance data is output by the output module.
Patent•
19 Sep 2012
TL;DR: The utility model provides a loose-leaf accounting book as discussed by the authors, which consists of an accounting book shell (1), wherein a jump ring (2) is arranged in the middle position of the book shell; gauze is adhered to the back side of the accounting sheets (5) to form a flexible strip (3), a pore (4) is formed on the flexible strip; and the jump ring passes through the pore.
Abstract: The utility model provides a loose-leaf accounting book. In a traditional loose-leaf accounting book, accounting sheets, an accounting cover, an accounting back cover, an accounting back and the like are connected and bound with strings or nails. The loose-leaf accounting book consists of an accounting book shell (1), wherein a jump ring (2) is arranged in the middle position of the accounting book shell; gauze is adhered to the back side of the accounting sheets (5) to form a flexible strip (3), a pore (4) is formed on the flexible strip; and the jump ring passes through the pore. The loose-leaf accounting book is used in a fixed assets subsidiary ledger, receivable and payable accounts payable subsidiary ledger, a product and commodity subsidiary ledger, a material subsidiary ledger, a sales revenue detail report, a low priced and easily worn articles subsidiary ledger, taxes payable subsidiary ledger and other various accounting ledgers.
Posted Content•
TL;DR: In this article, the authors examined the cross-border rules in the Australian GST and discussed Travelex, a case in which the High Court of Australia concluded that foreign currency services consumed in Australia were not taxable because they were ‘exported services’.
Abstract: This paper, presented at a conference in 2010, examines the cross-border rules in the Australian GST. Part 1 (2000 to 2009) covers the initial design of Australia’s destination principle rules, early case law questioning whether GST was payable by foreign tour operators selling holidays in Australia, legislative changes made in response to that case law, and the review of the cross-border rules undertaken by the Australian Board of Taxation in response to the work of the OECD on the International VAT/GST Guidelines. Part 2 (2010) comments on the Board of Taxation’s recommendations and discusses Travelex, a case in which the High Court of Australia concluded that foreign currency services consumed in Australia were not taxable because they were ‘exported services’. Part 3 (2011 and beyond), discusses how the Board of Taxation recommendations might be implemented, considers how the Government should respond to the Travelex decision, and calls for a more active interest in the work of the OECD.
TL;DR: The state has to regulate private property for environmental purposes as discussed by the authors, and the question is how far may the state go? And when will compensation be payable? And how far the state can go?
Abstract: The state has to regulate private property for environmental purposes. The question is how far may the state go? And when will compensation be payable?
Journal Article•
TL;DR: In this article, the authors used micro-data of industry firms to test the reallocation effects and compulsive characteristic of China's trade credit, and found that firms with more accounts receivable are inclined to expand their scales on accounts payable, and cause debt relationships among firms to have strong patterns of chain credit.
Abstract: The Reallocation theory of trade credits states that trade credit can increasing the efficiency of resource allocation by reallocating bank loans among firms.This paper,using 2004-2007 micro-data of industry firms,tests the reallocation effects and compulsive characteristic of China's trade credit.Firms getting more bank loans(including SOEs) do not provide more trade credits but tend to obtain more credits.Market power plays an important role in explaining this distortion.Firms with more accounts receivable are inclined to expanding their scales on accounts payable,and cause debt relationships among firms to have strong patterns of chain credit.Furthermore,local firms bear more losses from bad debts,compared with exporting firms.China's trade credits have significant feature of non-repayment and default.Trade credits in China have not increased the efficiency of resource allocation,but raised transaction costs and the risk of market.
1 Jan 2012
TL;DR: In this paper, the authors have developed an analytics framework that is core to an end-to-end effective payables management which enables management to take effective control of the vendor payment systems by enhancing visibility and control.
Abstract: Operating Cash flow is the, or one of the, most important parameters in gauging the financial health of an organization. Some of the not so visible cost components arising out of accruals system of accounting; needs detailed evaluation in bringing out cost efficiencies. Significant amount of cash can be saved by streamlining payables; one of the key components of operating cash flows. Payables management becomes an insurmountable challenge for organizations that have to deal with inconsistent data coming from heterogeneous information management systems, which mostly is a result of ongoing inorganic growth adopted by organizations. At Hewlett Packard, we have developed an analytics framework that is core to an end to end effective payables management which enables management to take effective control of the vendor payment systems by enhancing visibility and control.
Patent•
2 Jul 2012TL;DR: In this article, a prepayment is tied to a purchase order when a product order is generated and then posted to a deferred payment account, instead of an accounts payable account.
Abstract: A prepayment is tied to a purchase order when a purchase order is generated. The prepayment is then posted to a deferred payment account, instead of an accounts payable account. When an invoice is received on the purchase order, the prepayment is applied to the invoice. The prepayment is consumed before increasing the accounts payable account.
Journal Article•
TL;DR: Securitization refers to a category of financing transactions in which companies sell rights to payment under mortgage loans, accounts receivable, lease rentals, and other types of income-producing financial assets to a trust or other special-purpose vehicle (SPV) as discussed by the authors.
Abstract: Securitization has been criticized because of its role in the recent financial crisis. Securitization refers to a category of financing transactions in which companies sell rights to payment under mortgage loans, accounts receivable, lease rentals, and other types of income-producing financial assets to a trust or other special-purpose vehicle (an “SPV,” sometimes interchangeably called a special-purpose entity or SPE). The goal is to separate these assets from the risks generally associated with the company—usually called the “originator” to distinguish it from the SPV. The originator then can use these assets, held by the SPV, to raise funds in the capital markets at a lower cost than if it had borrowed the funds. Securitization accomplishes this cost saving for two reasons. First, by raising funds without having to borrow from a bank or other financial intermediary, the originator avoids the intermediary’s profit mark-up. This approach, called “disintermediation,” is similar to buying wholesale (rather than retail). Second, the interest rate payable on the securities issued by an SPV is ordinarily lower than the interest rate payable on corporate securities issued directly by the originator. This interest-rate
TL;DR: In this paper, the effects of taxation on trade credit financing are analyzed, which takes the form of accounts payable and accounts receivable, and the authors find that firms in high tax jurisdictions have higher pretax marginal products of capital than do firms in low tax jurisdictions.
Abstract: This paper analyzes the effects of taxation on trade credit financing, which takes the form of accounts payable and accounts receivable. High tax rates discourage investment, and as a consequence, firms in high-tax jurisdictions have greater pretax marginal products of capital than do firms in low-tax jurisdictions. Differences in pretax marginal products of capital create incentives to use trade credit finance to reallocate capital, typically from firms with low tax rates to those with high tax rates. Trade credit can also be used to reallocate taxable income among related parties. Evidence from the worldwide operations of U.S. multinational firms indicates that affiliates in low-tax jurisdictions use trade credit to lend to others: ten percent lower local tax rates are associated with net trade credit positions that are 1.4 percent higher as a fraction of sales. The use of trade credit to get capital out of low-tax, low-marginal product environments is also illustrated by the reaction of U.S. firms to the temporary repatriation tax holiday in 2005, when affiliates with positive net trade credit positions were more likely than others to repatriate dividends to parent companies in the U.S.
Patent•
29 Feb 2012
TL;DR: In this paper, a computer-based system for determining insurance premium taxes (IPT) for multiple clients in a plurality of jurisdictions comprises an electronic database containing data identifying a pluralityof classes of risks in each tax jurisdiction for which IPT is payable, the tax rates for each tax type applicable to each class of risk in each jurisdiction, and financial data supplied by clients.
Abstract: A computer-based system for determining insurance premium taxes (IPT) for multiple clients in a plurality of jurisdictions comprises an electronic database containing data identifying a plurality of classes of risk in each tax jurisdiction for which IPT is payable, the tax rates for each tax type applicable to each class of risk in each jurisdiction, the tax-collection organization(s) in each jurisdiction for each class of risk, and financial data supplied by clients. Software associated with the database receives financial data from each client relating to insurance transactions for which IPT is payable and stores said data in the database, determines from said financial data the relevant class(es) of risk for each jurisdiction and the tax payable in respect thereof to each tax-collection organization in the jurisdiction, and prepares a tax return for each transaction for which IPT is due.
Posted Content•
1 Jan 2012
TL;DR: In this article, the main task of any tax administration is to collect the correct amount of taxes payable to the budget, with minimum costs for both government and taxpayers, and achieving this goal is possible only when there is an efficient and effective tax administration, which is based the procedures established and consistent management of each function.
Abstract: The main task of any tax administration is to collect the correct amount of taxes payable to the budget, with minimum costs for both government and taxpayers. Achieving this goal is possible only when there is an efficient and effective tax administration, which is based the procedures established and consistent management of each function. That is why the current paper addressed issues regarding the improvement of fiscal control in Romania.
24 Oct 2012
TL;DR: Wang et al. as mentioned in this paper evaluated a company's internal control system and found that weak internal control could affect a couple problems with ineffective and inefficient work on expenditure system, such as no reconcile between payable record and payable control account at general ledger that can causes registration different that affect in validity and data accuracy that presented in financial statement, with no proper authorization on company's======¯¯¯¯document.
Abstract: Internal control is a protection for company from risks with ensuring data reliability and information, also increase affectivity in managed various company activity. Internal control is getting important in every company’s part, including in accounting. In evaluating company’s system, found various facts that weak internal control system could
affect a couple problems with ineffective and inefficient work on expenditure system. The problems are: no reconcile
between payable record and payable control account at general ledger that can causes registration different that affect in validity and data accuracy that presented in financial statement, with no proper authorization on company’s
document. To mitigate the fraud, evaluation is needed in payable internal control. Evaluation towards existing
expenditure system is needed to help company in handling problems about payable reconcile even important document
authorization for company.