Glossary

3-way matching refers to a three-step process of matching three key documents before processing a payment to a supplier.

30-day and 13-week operating cash burn are also known as the “burn rate.” These are the rates at which a business consumes its cash reserves when it isn’t bringing in profit. 

Accounting Standards Codification (ASC) 606 is a standard framework for revenue recognition developed by the Financial Accounting Standards Board (FASB) for companies operating within the United States.

Account reconciliation is the process of comparing two sets of records to ensure their accuracy and consistency.

Accounts payable (AP) refers to the amount of money that a business owes to its suppliers or creditors for goods or services purchased on credit.

Accounts payable automation (AP Automation) refers to the use of technology and software solutions to streamline and optimize the accounts payable process within an organization.

Accounts Payable Days (AP Days), also referred to as Days Payable Outstanding (DPO), is a financial ratio that measures the average time a company takes to pay its suppliers or vendors for credit purchases.

Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.

Accounts receivable aging is a reporting process that categorizes unpaid invoices and credit memos according to how long they remain outstanding. They are typically sorted into 30-day ranges (0-30 days, 31-60 days, 61-90 days), and this report is how companies calculate their days sales outstanding (DSO) average. 

The accounts receivable turnover ratio (or debtor turnover ratio) allows businesses to evaluate their debt collection efficiency.