Alternative Payments brings you The Alternative Guide to Accounting Terminology – a comprehensive educational resource to help you improve your financial literacy. Whether you plan to improve the fiscal operations of your service-based business or navigate the complex pathways of B2B transactions, this knowledge repository is a great resource (be sure to bookmark it!). Discover and familiarize yourself with what will end up being hundreds of complex terms related to our innovative payment solutions. The guide to accounting terms provides the clarity you need to make informed decisions, streamline processes, and protect your valuable information – from the basics of ACH payments to the intricacies of NetSuite ERP and beyond. Discover the keys to a more efficient and profitable future for your business by embarking on a journey to financial fluency!
Explore our array of educational articles, including those on Accounts Receivable.
Accounting Terms
Alternative Payments: Payment methods that differ from traditional methods like cash or bank transfers, tailored for service-based businesses to streamline transactions.
Accounts Receivable Automation: Technology-driven process that automates the tracking, invoicing, and collecting of payments owed to a company, enhancing efficiency and accuracy.
Invoicing: The process of creating and sending detailed bills for goods or services provided, crucial for record-keeping and payment requests in business transactions.
Payment Processing: The mechanism through which transactions are verified, accepted, or declined by financial networks, involving various methods like ACH and credit cards.
Reconciliation: The act of ensuring that two sets of records (usually the balances of two accounts) are in agreement, vital for accurate financial reporting.
ACH Payments: A form of electronic fund transfer across banks in the United States, enabling businesses and individuals to send and receive payments efficiently.
Credit Card Payments: Transactions where customers authorize the transfer of funds from their credit card accounts to a merchant for goods or services.
Installment Plans: Payment arrangements allow customers to pay for goods or services over time, typically in regular, fixed amounts.
Auto-pay Rules: Automated settings that allow for recurring payments to be deducted from a customer’s account at scheduled intervals, reducing collection times.
Payment Tracking: Monitoring and recording the status and details of payments, is essential for managing cash flow and financial planning.
Automated Collections: The use of automated systems to track and collect payments due, reducing the need for manual intervention and increasing efficiency.
Customer Benefits: Advantages or value that customers receive from a product or service, such as convenience, time-saving, and financial flexibility.
Financial Health: The overall state of a business’s monetary affairs, indicating stability, profitability, and liquidity.
Paperless Invoicing: The practice of sending invoices electronically, eliminating the need for physical paper documents, contributing to environmental sustainability.
Auto-charge: The automatic deduction of payment from a customer’s account when a bill is due, enhancing convenience and ensuring timely payments.
CRM Integration: The connection of customer relationship management systems with other tools, allowing for synchronized data and streamlined processes.
PSA Tools: Professional services automation software that helps service-oriented businesses manage core operations like project management, billing, and time tracking.
ERP Integration: The process of connecting enterprise resource planning systems with other business applications to streamline processes and data across the organization.
Plaid: A technology platform that allows applications to connect with users’ bank accounts for financial transactions, enhancing security and convenience.
NetSuite ERP: A comprehensive cloud-based ERP solution that provides businesses with the tools to manage their core business processes in a single system.
QuickBooks: An accounting software package developed and marketed by Intuit, designed to manage payroll, inventory, sales, and other needs of small to medium-sized businesses.
Xero: An online accounting software for small businesses, offering features like invoicing, billing, reporting, and bank reconciliation.
ConnectWise: A business management platform that offers services such as IT service management, automation, and operations management.
B2B Buy Now, Pay Later: A payment option allowing businesses to purchase goods or services immediately and pay for them over time.
Upfront Payments: Payments made at the beginning of a transaction, providing businesses with immediate funds and reducing credit risk.
Installment Payments: A payment method allowing customers to pay for goods or services over a specified period, usually in regular, smaller amounts.
Data Protection: Measures and policies in place to ensure the security, privacy, and integrity of data, particularly sensitive information.
PCI Compliance: Adherence to the Payment Card Industry Data Security Standard, a set of security standards designed to ensure that all companies that accept, process, store, or transmit credit card information maintain a secure environment.
ISO/IEC 27001: An international standard outlining the requirements for an information security management system (ISMS), ensuring the confidentiality, integrity, and availability of data.
Overdue Invoices: Invoices that have not been paid by the due date, often require follow-up and management to ensure collection.
Invoice Confirmation: The process of verifying and acknowledging the details of an invoice, typically before processing a payment or for record-keeping purposes.
Collection Strategies: Techniques and approaches used by businesses to recover outstanding debts and payments, which may include communication, negotiation, or legal action.
Dashboards: Visual interfaces that display data and key performance indicators (KPIs) in an intuitive and easy-to-understand manner, aiding in decision-making.
Billing Automation: The use of technology to automate the generation, sending, and tracking of bills, reducing manual effort and increasing accuracy.
Revenue Growth: An increase in a company’s sales or income, indicative of business expansion and market success.
Payment Methods Collection: The process of gathering and storing information about customers’ preferred payment options, often during the contracting phase.
Financial Transactions Platform: A system or software that facilitates the processing of monetary transactions, often integrating various payment methods and financial tools.
Service-Based Businesses: Companies that provide intangible goods or services to customers, as opposed to selling physical products.
Business-to-Business (B2B) Checkout: A transaction interface or process tailored for the exchange of goods or services between businesses, often involving invoicing and bulk orders.
AWS for Data Storage: Utilizing Amazon Web Services for storing data, known for its scalability, security, and reliability.
Efficient Collection Methods: Strategies and practices that optimize the process of collecting payments, ensuring timely and consistent cash flow.
Consolidated Payment Tracking: The aggregation of payment tracking information from various sources into a single platform or system for easier management and oversight.
Automatic Payment Method Collection: The process of automatically gathering and storing payment information from customers, usually during the contracting process.
Time-saving Automations: Technological solutions designed to reduce the amount of time required to complete tasks, particularly repetitive or manual ones.
Immediate Revenue Collection: The practice of collecting payment for goods or services at the time of the transaction, ensuring immediate cash flow.
Bank Connections: The ability of a platform or system to link with bank accounts, facilitating direct transactions and financial tracking.
Automated Invoice Management: The use of technology to manage the creation, distribution, and tracking of invoices with minimal manual intervention.
Collection Tools: Software or methodologies employed to facilitate the collection of outstanding debts or payments.
Subscription Billing: A billing model where customers pay a recurring fee at regular intervals for access to a product or service.
Invoice Management System: A software or tool designed to create, send, track, and manage invoices efficiently.
E-Invoicing: The process of sending invoices electronically, allowing for faster delivery and processing compared to traditional paper invoicing.
Secure Data Storage: The practice of storing data in a manner that ensures it is protected from unauthorized access, loss, or theft.
Compliance Standards: A set of criteria or guidelines that an organization follows to ensure it adheres to legal, ethical, or industry-specific requirements.
Electronic Fund Transfer (EFT): A system that moves money between bank accounts electronically, often used for online payments and direct deposits.
Transaction Verification: The process of confirming the validity of a financial transaction, often involving authentication and authorization checks.
Customer Payment Portal: An online platform where customers can view their invoices, select payment methods, and make payments.
Real-time Processing: The ability of a system to process data and complete transactions instantaneously or within a few seconds.
Financial Reporting: The act of producing statements that disclose an organization’s financial status to management, investors, and regulators.
Security Protocols: A set of rules and procedures designed to protect data, networks, and systems from unauthorized access or harm.
Digital Transformation: The integration of digital technology into all areas of a business, fundamentally changing how it operates and delivers value to customers.
Business Analytics: The practice of using data, statistical analysis, and modeling to make informed business decisions and measure performance.
Workflow Automation: The technology that automates business processes, allowing tasks, information, or documents to be passed from one participant to another for action, according to a set of procedural rules.
Data Synchronization: The process of ensuring that information in two or more locations is updated via certain rules, ensuring consistency and accuracy across systems.
Online Payment Gateway: A merchant service that authorizes credit card or direct payment processing for e-businesses, online retailers, or traditional brick-and-mortar.
Financial Ecosystem: A complex network of financial institutions and their interactions, involving the flow of capital and financial services.
Revenue Management: The strategic application of analytics that predicts consumer behavior at the micro-market level and optimizes product availability and price to maximize revenue growth.
Digital Invoicing: The creation and delivery of invoices in a digital format, enabling faster processing and more efficient management of financial transactions.
Payment Gateway Integration: The process of connecting a payment gateway to other systems, allowing for the processing of transactions and the secure transfer of payment data.
Debt Collection Software: A type of software designed to assist businesses in tracking outstanding debts and communicating with debtors to facilitate payment.
Cloud-Based Accounting: The use of remote servers hosted on the internet to store, manage, and process financial data, providing accessibility and flexibility.
Financial Analytics: The science of analyzing financial data to make informed business decisions, often involving the use of specialized software and models.
Payment Confirmation: The process of verifying that a payment has been made successfully, typically involving notification to both the payer and the payee.
Bank Reconciliation: The process of matching the balances in an entity’s accounting records for a cash account to the corresponding information on a bank statement.
Customer Self-Service Portal: An online platform that allows customers to access services, conduct transactions, and manage their accounts without needing direct interaction with the company.
Merchant Services: A broad category of financial services intended for use by businesses, including processing of credit card transactions and other payment methods.
Automated Billing System: A system that automates the billing process, including invoice generation, distribution, and tracking, often as part of a larger accounting or ERP system.
Revenue Cycle Management: The financial process that healthcare facilities use to track patient care episodes from registration and appointment scheduling to the final payment of a balance.
Digital Wallets: Electronic devices or online services that allow individuals to make electronic transactions, including purchasing items online with a computer or using a smartphone to purchase something at a store.
Payment Dispute Resolution: The process of resolving disagreements or disputes between a buyer and a seller regarding a payment transaction.
Financial Data Integration: The process of combining data from multiple sources and providing a unified view, ensuring that financial information is accurate and consistent.
Cash Flow Management: The process of tracking how much money is coming into and going out of a business, crucial for understanding its financial health and planning for the future.
Automated Payment Notifications: Notifications sent automatically to inform customers of upcoming or completed payments, often part of a broader automated billing or CRM system.
Credit Management: The process of granting credit, the terms it’s granted on, and the recovery of this credit when it’s due, essential for maintaining a company’s financial health.
Digital Payment Systems: Platforms or software that enable the processing of digital payments, allowing users to transfer funds, make purchases, and receive payments electronically.
Accounting Software Integration: The connection of accounting software with other business systems to automate financial processes and data exchange, enhancing accuracy and efficiency.
E-commerce Payments: Transactions that take place online for the exchange of goods and services, requiring secure and efficient payment processing solutions.
Financial Forecasting: The process of estimating or predicting a business’s future financial outcomes based on historical data and financial analysis.
Transaction Records: Documentation or logs that capture the details of each transaction, crucial for financial tracking, auditing, and compliance.
Credit Risk Assessment: The evaluation of the likelihood that a borrower may default on debt obligations, is crucial for managing financial exposure and risk.
Invoice Generation: The process of creating an invoice to request payment for services rendered or goods provided, typically involving details like the amount due, payment terms, and service description.
Automated Account Reconciliation: The use of software to automatically compare and reconcile account balances, reducing manual effort and increasing accuracy.
Fraud Detection: The use of analytics and monitoring techniques to identify and prevent unauthorized financial activity, is crucial for protecting assets and maintaining trust.
Financial Planning: The task of determining how a business will afford to achieve its strategic goals and objectives, often involving budgeting, forecasting, and resource allocation.
Payment Settlement: The process by which a merchant receives payment from a payment processor after a successful credit card transaction.
Online Banking Integration: The ability of systems or software to connect with online banking services, enabling real-time financial transactions and data exchange.
Transaction Fees: Fees charged for processing a financial transaction, typically by payment processors or banks, impact the net amount received by merchants.
Payment Processing Solutions: Services or software that facilitate the processing of payments, supporting various payment methods and ensuring secure transactions.
Revenue Recognition: The accounting principle that dictates the specific conditions under which revenue is recognized and accounted for, is essential for accurate financial reporting.
Direct Debit: A financial transaction in which a person’s account is debited electronically, typically for bill payments, with prior authorization.
Merchant Account: A type of bank account that allows businesses to accept payments in multiple ways, typically debit or credit cards, essential for e-commerce and retail businesses.
Mobile Payments: Transactions conducted through mobile devices, utilizing technologies like NFC (Near Field Communication) or mobile wallets for convenient and secure payments on-the-go.
Tokenization: The process of substituting sensitive data with unique identifiers called tokens, enhancing security by reducing the risk of exposing confidential information during transactions.
Dynamic Currency Conversion: A service offered to international travelers allowing them to pay in their home currency when using credit or debit cards abroad, simplifying transactions and providing transparency in exchange rates.
Transaction Authorization: The process of verifying and approving a payment transaction, ensuring that the necessary funds are available and that the transaction meets security protocols.
Chargeback: A dispute initiated by a cardholder with their bank or credit card issuer regarding a transaction, resulting in a reversal of funds to the cardholder if the dispute is resolved in their favor.
Recurring Billing: A billing model where customers are charged automatically at regular intervals for ongoing services or subscriptions, providing convenience and ensuring continuity of service.
Multi-currency Payments: Payment processing capabilities that allow merchants to accept transactions in multiple currencies, catering to international customers and expanding market reach.
Transaction Monitoring: The continuous surveillance of financial transactions to detect and prevent fraudulent activities, ensuring the integrity and security of payment systems.
POS Integration: The seamless integration of payment processing systems with point-of-sale (POS) terminals or software, enabling efficient and secure transactions at retail locations.
Customer Verification: The process of confirming the identity of customers before authorizing a payment transaction, reducing the risk of fraud and ensuring compliance with regulatory requirements.
Biometric Authentication: A security measure that uses unique biological traits like fingerprints, facial recognition, or iris scans to verify the identity of individuals during payment transactions.
Escrow Services: A financial arrangement where a third party holds and regulates payment of funds between two parties, providing security and assurance that transactions are completed as agreed upon.
Transaction Limits: Maximum or minimum thresholds set by financial institutions or payment processors on the amount of money that can be transferred or spent in a single transaction or within a specified time frame.
Batch Processing: A method of processing transactions in bulk, typically done at the end of the business day, to streamline operations and reduce processing costs.
Contactless Payments: Payment methods that allow customers to complete transactions by tapping or waving their cards, smartphones, or wearables near a contactless-enabled terminal, offering speed and convenience.
Merchant Identification Number (MID): A unique identifier assigned to merchants by acquiring banks or payment processors, used to track and manage transaction activity associated with a specific merchant.
Payment Gateway: A technology solution that facilitates the transmission of payment data between a merchant’s website or POS system and the payment processor, ensuring secure and reliable transactions.
Fraud Prevention: Strategies and measures implemented to mitigate the risk of fraudulent activities during payment transactions, safeguarding both merchants and customers from financial losses.
3D Secure: An additional layer of security for online credit and debit card transactions, requiring cardholders to authenticate themselves with a password or biometric information, reducing the risk of unauthorized use.
Customer Experience: The overall impression and satisfaction customers have with a company’s products, services, and interactions, crucial for building loyalty and driving repeat business.
Real-time Fraud Detection: Advanced algorithms and monitoring systems that analyze transaction data in real-time to identify and prevent fraudulent activities as they occur, minimizing potential losses.
Virtual Terminal: An online platform or interface that allows merchants to manually enter and process payment card information for transactions conducted over the phone, by mail, or in person.
Reconciliation Reports: Detailed statements or reports that compare and reconcile transaction data between different sources, such as bank statements, accounting records, and payment processor reports.
Transaction Encryption: The process of encoding sensitive payment data to protect it from unauthorized access or interception during transmission, ensuring the confidentiality and integrity of transactions.
Interchange Fees: Fees charged by card networks like Visa and Mastercard to merchants for processing credit and debit card transactions, covering the cost of transaction processing and network infrastructure.
Chargeback Prevention: Strategies and best practices implemented by merchants to reduce the likelihood of chargebacks, such as providing clear product descriptions, excellent customer service, and dispute resolution processes.
Payment Plan Management: The administration and oversight of payment plans or installment agreements offered to customers, ensuring timely payments and adherence to contractual terms.
Customer Loyalty Programs: Incentive schemes designed to reward customers for their repeat business or loyalty, often offering discounts, rewards points, or exclusive perks for frequent purchases.
Merchant Services Agreement: A contractual agreement between a merchant and a payment processor outlining the terms and conditions of their relationship, including fees, responsibilities, and dispute resolution procedures.
Transaction Decline: The refusal or rejection of a payment transaction by a bank or payment processor, typically due to insufficient funds, security concerns, or other issues.
Transaction Settlement: The process of transferring funds from the cardholder’s bank to the merchant’s bank to finalize a payment transaction, usually occurring within a few business days.
Cross-border Payments: Transactions involving the transfer of funds between individuals, businesses, or financial institutions located in different countries, often subject to international regulations and currency conversion fees.
EMV Chip Technology: A global standard for credit and debit card transactions that uses embedded microchips to store and protect payment data, reducing the risk of counterfeit card fraud.
Merchant Category Code (MCC): A four-digit code assigned to merchants by payment card networks to classify the business type or industry, used for reporting and regulatory purposes.
Transaction Receipts: Documentation provided to customers as proof of payment for goods or services rendered, containing details such as the transaction amount, date, and merchant information.
Recurring Payment Authorization: The consent given by a customer to a merchant to charge their payment card automatically at regular intervals for ongoing subscriptions or services.
Transaction Dispute Resolution: The process of investigating and resolving disputes between merchants and customers regarding payment transactions, often involving mediation by payment processors or issuing banks.
Payment Tokenization: The process of replacing sensitive payment card information with a unique token, reducing the risk of data breaches and enhancing security during transactions.
Merchant Dashboard: An online interface or platform that provides merchants with access to real-time transaction data, analytics, and management tools for monitoring and optimizing their business.
Authorization Hold: A temporary hold placed on a customer’s funds to ensure that sufficient funds are available for a pending transaction, commonly used for hotel reservations, car rentals, and gas purchases.
Recurring Billing Management: The administration and oversight of recurring billing arrangements, including subscription renewals, payment processing, and customer communications.
Transaction History: A record of all past transactions conducted by a customer or merchant, including details such as date, time, amount, and transaction type.
Dispute Resolution Process: The series of steps and procedures followed by payment processors and issuing banks to investigate and resolve transaction disputes between merchants and customers.
Mobile Point-of-Sale (mPOS): Portable devices or applications that enable merchants to accept payments anywhere, anytime using smartphones or tablets, providing flexibility and convenience.
