A fixed cost is a type of expense that does not change. In accounting, it means the amount remains the same over several periods. Usually, companies view this cost according to the activity levels over that period. Therefore, a fixed cost is an expense that does not change regardless of …

Bank drafts are a common type of payment used by businesses and individuals. It is a written order from a bank or other financial institution, instructing the drawee to pay a specific person or entity a specified sum of money on demand. The recipient of the Bank Draft will receive …

Companies need a base to operate in the business environment. While many companies have adopted a model to promote remote work, one element has remained the same. Despite the changes in modern business frameworks, companies still need electricity, water, and other utilities to operate. These items fall under the utility …

The workforce is essential in many industries. Whether service- or product-based, businesses need employees in many areas. In manufacturing companies, these employees also help contribute during the production cycle. The work done by them falls under the definition of labor. It includes any effort, skill, and time employees put toward …

Structured finance is a type of financial engineering that involves the use of complex financial instruments to structure sophisticated transactions. It is used to manage risk, raise capital and facilitate asset transfers. Structured finance can involve the securitization of assets or other forms of debt financing. These structures are designed …

The matching concept in accounting requires companies to match expenses to the revenues to which they relate. Therefore, companies may spread costs over several years to ensure that. A typical example of the matching principle affecting accounting is depreciation. Companies spread the cost of their assets over several years to …

Pricing can be a major factor in the success of a business, and price discrimination is one strategy that many companies use to maximize their profits. Price discrimination involves charging different prices for the same product or service based on consumer demand, perceived value, or any other factor, rather than …

Companies and individuals use bank accounts to facilitate their transactions. These accounts also come with the safety of their money and other benefits. However, these parties must also pay the bank for their services. The payments constitute an expense for the account holder while being an income for the bank. …

A lease is a contractual agreement between two parties. The lessor is the party that grants the use of an asset or property to another party, also known as the lessee. Usually, the lease agreement also includes other terms, for example, the duration, payment schedule, ownership, etc. In accounting, leases …

When it comes to payments, it is important to stay on top of any arrears. This means knowing if the payments are late or missed and being proactive in dealing with them. Late payments can cause a financial strain and can negatively affect credit ratings. It is important to keep …