Accounts receivable (A/R) is an accounting term that refers to money someone owes to a store or business. If you buy something from a store, but don’t pay them right away – the amount that you owe goes into the store’s accounts receivable record.
Most large companies have an entire accounts receivable department that is solely focused on keeping track of money owed to the company.
Accounts payable (A/Ps) is an accounting term that refers to money owed by a person or business to another person or business.
For example, if an office has bottled water delivered each week but doesn’t pay for it until the end of the month, the charge goes into accounts payable until the check is written. Employee paychecks also fall into the category of accounts payable until they are actually given out to employees.
(photo credit: striatic)
Well, that pesky federal deficit has finally caught up with us. Standard & Poor’s, a credit rating agency that basically judges how risky (or safe) it is to invest in a country, has officially said that the United States’s economic shenanigans may end up costing it its pristine AAA credit rating. (That’s three A’s, so you know it’s extra awesome.) The main reason? Washington’s seeming inability to agree on a plan to reduce the deficit.
S&P didn’t actually downgrade America’s credit rating, but it did change its “outlook” from “stable” to “negative.” This is basically a shot across the bow, or a warning from your mother that if you keep hanging out with those corner boys all you’ll get is a reputation.
This is kind of a big deal. If the U.S. is downgraded (and according to S&P is could be within three years), we’ll be out-credited by France. And foreign investors might be less interested in buying Treasury bonds, which would cut off an important source of income for the government. Which might result in more cuts to services like health care, education, and, you know, repairing roads.
Let’s see where we are in two years. In the meantime, how do you think you would do in S&P’s eyes?
Can you weather the credit storm?
The man behind the Your Money column in the NYTimes gives a fast-moving and really useful explanation of debit and credit cards. Understanding the difference and some features of each can potentially save you a few hundred bucks a month – money you can surely put to much better use.
Feed your head, not your bank’s overdraft fee collectors.
Credit card companies are freaking out as they try to entice shoppers to pay for gifts with credit. But those 5% cash back offers aren’t exactly worth taking on thousands of dollars in debt.
“With the interest rates, it just seemed like I never paid it off.” – Liz Gonzalez, talking about her credit card debt
Is this the end of the entire credit card business model as we know it??
Checking your credit score is a lot simpler than you may think — in fact, everyone in America is entitled to one free credit report each year from all of the three credit reporting agencies. You can request them online at the fishy-sounding but totally legit and official www.annualcreditreport.com.
You can also buy your credit report, for a nominal fee, directly from each one of these agencies. Make sure you type in the correct website address, because fake websites have similar names and will try to trick you into giving away personal information or signing up for services you don’t want or need.
The 2010 Winter Olympics started this past week in Vancouver, and when considering these prestigious games, one must ask oneself the question: if I were to take up curling, would winning a gold medal make up for all those years of chronic boredom and embarrassment, you know, money-wise? Well…
When you don’t pay credit card bills on time, your credit score takes a hit, and a low credit score makes your life difficult in multiple ways. Your credit score basically reflects how trustworthy you are when it comes to paying back credit, and any time you need credit or insurance, the lenders involved are going to look at your credit score. A low credit score may be enough reason for a lender to refuse you a loan outright or for an insurer to decide you’re too risky, and even if you are granted credit, it may be at a higher interest rate or with stricter terms and conditions.
Although different companies calculate credit scores differently, paying your bills late is one thing that’s basically guaranteed to lower it. Paying on time, however, has the opposite effect, and the longer you go without missing a payment, the better your credit score looks. Basically, a high credit score tells credit and insurance companies that you’re a responsible person, and they’ll treat you better for it – it’s a way to make a good impression from the start.
When you’re hiring someone for a job, the best choice is probably a person who has a reputation for doing similar jobs well in the past. Although someone without any established reputation is better than someone with a bad reputation, he’s still something of a gamble – you have no special reason to think he won’t perform the job well, but no reason to believe he will, either.
Credit history follows the same principle. It’s basically a record of how you’ve used credit in the past. How much do you owe right now? Have you made your credit payments on time? Have you had any financial problems? In credit as in anything else, a long history of good behavior is a great asset because it inspires trust. For example, a bank may be more inclined to let you take out a loan if you have an excellent credit history; if you’ve repaid your debts in a timely manner in the past, odds are you’ll deal with their loan in the same way.