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AR Glossary




Account Current:
A monthly accounting statement of the client's daily transactions


Accounts Receivable:

Money owed by customers of our clients, usually by issuing an invoice that is due to be paid within a certain period of time


Accounts Receivable Aging:
A periodic report that organizes a company’s accounts receivable by outstanding invoices


Accounts Receivable Financing:

The process of a company turning its accounts receivable into cash


Accounts Receivable Verification: 
The process Capital Foundry uses to determine the eligibility of receivables


Accrual Accounting:

Used to record a business’ income and expenses, transactions are recorded when they happen,

without monies being paid or received



This is the amount of money that Capital Foundry advances to clients when lending or purchasing  against an invoice


Advance Rate: 

The percentage of the invoice that will be advanced


Approved Account: 
Invoices to a customer for which Capital Foundry has  evaluated and assigned a credit risk rating


Articles of Incorporation:

Also known as the Certificate of Incorporation, this document acts as a charter to establish a new corporation. The document is filed with the government during the formation of a C corporation or S corporation, and includes information such as the company’s name and street address.

Asset Based Loan (ABL): 

A term loan that is secured by the client’s assets as collateral


Audit commonly known as a Field Examination:

A review done by Capital Foundry to ensure the conditions of the facility are being met


Automated Clearing House (ACH):

ACH is a network allowing businesses to electronically transmit payments from their customers through a single or recurring transaction.


Average Due Date:
The date on which the month's sales are payable by the customer to our client




Bad Debt: 

Debt that has an unlikely chance of being collected


Balance Sheet:

A financial document showing a company’s assets, liabilities and shareholders’ equity at a specific date


Borrowing Base:

The value of a client’s assets used by lenders as criteria for providing availability under a loan agreement





Cash Basis Accounting:

An accounting method used to record business income and expenses. Income is recorded when payment is received, and expenses are recorded when paid.


Change of Terms:
Modifying the terms of sale on the original invoice


Uncollected invoices debited to the client's current account


An organization entered into a contract with Capital Foundry


Property owned by the client controlled by Capital Foundry to ensure that a borrower will repay the loan



Payments received for financed invoices that were factored or loaned against that are remitted through the lock box system


Collection Days: 
Days added to the due date of the invoice to allow for mail time and check clearing days



A percentage representing the maximum level which Capital Foundry will permit for a single customer within a client’s portfolio in order to mitigate risk


Confession of Judgment (COJ):

A written authorization within the loan agreement by the client giving Capital Foundry a judgment against the client in the case of a default without the necessity of any legal adjudication


Contra Account:

An account in which the client and it’s customer owe each other money

Credit Memo:
A credit to a customer's account to correct erroneous charges


Credit Protection: 

A facility that covers the client against losses due to the nonpayment of an invoice


Confidential Factoring:

A facility where the customer is not notified that the client is partnered with Capital Foundry


Current Account: 

Amount of funds paid including any charges at any given time


Current Liabilities:

Debts due within one year

Organization to whom the client sells its goods


Funds deducted by the customer when paying a client's invoice

Discount Fee: 
The fee charged by Capital Foundry to provide the line of credit

Dispute Notice:

Capital Foundry notification alerting the client that a customer has refused to pay an invoice. Disputes are resolved between the client and its customer.

Due Diligence:

The research process done by Capital Foundry in preparation for a new client



Export Debt: 

Money owed to a client from an overseas customer




A form of business funding where a company finances their accounts receivable by selling their invoices to an intermediary called a factoring company

Funding Period: 

Time period from when invoices are sent to customers to when payment is received



Government Contract Financing:

The availability of working capital prior to a Government payment to a contractor before the acceptance of goods or services by the Government.



To provide security for reimbursement in case of a loss


Invoices Capital Foundry will not lend against


Goods or property on hand


A document listing merchandise shipped, the ship to name and address, the bill to name and address, the cost and terms of sale


Invoice Factoring:

Process of purchasing a client’s accounts receivable





A security interest taken by the Lender or Factor against  the client to secure debt


A bank treasury management system designed to receive payments by mail or wire




Mechanics Lien: 

A security interest in the legal title of a property by subcontractors and suppliers who have provided labor/products to improve the property



Notice of Assignment: 

A memo sent to customers informing them that the invoice is pledged as collateral and the address to send payment

Non-recourse factoring:

An arrangement in which the Factor takes the credit risk



Purchase Order Financing: 

Funding that finances the supplier costs associated with a purchase order




Funds wired to the client’s account once invoices are paid in full


Recourse Factoring:

Arrangement in which the client is responsible for invoices that remain unpaid




Schedule of Accounts: 

Form used by clients to submit their invoices to Capital Foundry



Terms of Sale: 
Time given to a customer to pay an invoice



Uniform Commercial Code (UCC): 

Act that harmonizes the law of sales and commercial transactions in the 50 states.





Process in which Capital Foundry verifies the validity of an invoice with the customer



Without Recourse:
Capital Foundry assumes responsibility for credit approval based on the client’s customers’ abilities for pay the invoice on maturity.

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