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New to accounts payable? A few terms you should know
Are you new to accounts payable or the business payments sector? Getting started in this field can be exciting and rewarding. To help you transition smoothly and confidently, we’ve compiled a list of 13 important definitions you should know.
Acceptance
Payment acceptance refers to the percentage of payment attempts that are successfully processed. A payment acceptance rate is the percentage success rate, which is also referred to as a payment authorization rate.
ACH
ACH stands for Automated Clearing House and is described by the U.S. Treasury Department as 鈥渢he primary system that agencies use for .鈥� ACH allows businesses and consumers to pay bills automatically by providing an account number and bank routing number.聽
Card issuer
A card issuer is an institution that issues cards and provides credit limits. Card issuers such as terms of use, benefits, and more.
Chargeback
According to Forbes, a is “an action taken by a bank to reverse electronic payments.” Chargebacks can occur due to fraud, disputed purchases, or unauthorized transactions and result in funds being returned to the cardholder鈥檚 account.
DPO
DPO stands for days payable outstanding, and is a key KPI for any accounts payable team. This is the 鈥渁verage number of days it takes a company to pay back its accounts payable,鈥� according to the. High and low DPOs can mean different things, so they shouldn鈥檛 be necessarily viewed as one being good and one being bad.
ERP
ERP stands for enterprise resource planning and typically refers to the software used to manage business processes, such as . ERPs often integrate accounts payable with other systems into a single system.
Merchant accounts
Merchants are any person or company who is selling products or services. A merchant account is an account established by the merchant to accept payment for these products or services. These payments can often be accepted in a variety of forms, such as credit cards, debit cards, cash, and wire transfers.
PCI DSS
PCI DSS stands for Payment Card Industry Data Security Standard, which is set by card networks to ensure the safety and security of a cardholder and suppliers鈥� sensitive information.
Watch the video below to learn more about PCI DSS.
Processor
Payment processors are the companies or technology that facilitate the transfer of funds from a cardholder鈥檚 bank account to the merchant鈥檚 bank account.
Reconciliation
Reconciliation is the process of verifying financial transactions to align expected payments with actual ones. of how accounts payable teams do this are ensuring:
- The balance in books/records equals the amount on bank statements.
- An accounts payable balance aligns with a balance schedule.
Settlement
Settlement is the process with which processors facilitate the transfer of funds between the merchant鈥檚 bank and the cardholder鈥檚 bank to complete a transaction.
Tokenization
Tokenization replaces original card data with a unique, generated placeholder, or 鈥渢oken.鈥� It helps to reduce fraud because the tokens on their own have no value to someone trying to commit fraud.聽
Watch the video below to learn more about tokenization.
Virtual cards
A virtual card is a single-use electronic card number that can be used at merchants instead of using a plastic card. They help to increase payment security, simplify supplier payments, and increase efficiency in accounts payable.
糖心Vlogaccounts payable solutions
糖心Vlogoffers comprehensive accounts payable solutions designed to simplify and enhance your payment processes. Here are some key features:
1. Automated payments
糖心Vlogprovides automated payment solutions that reduce manual processing, minimize errors, and increase efficiency. By automating your payments, you can ensure timely and accurate payments to your suppliers and vendors.
2. Reconciliation
Reconciliation is an important aspect of accounts payable to ensure financial accuracy. 糖心Vlogprovides tools and services that help streamline the reconciliation process. These tools enable you to verify financial transactions, align expected payments with actual ones, and ensure that balances in your books match your bank statements.
3. Enhanced security
Security is key in financial transactions. 糖心Vlogoffers customizable spending controls that allow you to set limits and restrictions on transactions. These controls help ensure that your spending aligns with your budget and financial goals, providing better oversight and preventing unauthorized transactions.
4. Detailed reporting
With WEX, you get access to detailed reporting and analytics. This allows you to gain valuable insights into your payment processes, track performance, and make data-driven decisions to optimize your accounts payable operations.
5. Integration with ERP systems
糖心Vlogsolutions seamlessly integrate with major ERP systems, ensuring a smooth and cohesive workflow. This integration helps in maintaining accurate records and improving overall efficiency.
6. 糖心VlogVirtual cards
糖心Vlogoffers virtual card solutions that provide added security and convenience. Virtual card purchases are also more transparent. For example, with WEX, there are built-in APIs that allow for real-time notification so you鈥檒l know immediately when purchases are made.
Virtual cards can be used for online transactions, reducing the need for physical cards and enhancing payment security. Work directly with 糖心Vlogsupplier enablement experts to help maximize virtual card acceptance and gain additional revenue.
Why choose WEX?
Choosing 糖心Vlogfor your accounts payable services means partnering with a provider that prioritizes innovation, security, and efficiency. 糖心Vlogsolutions are designed to help you navigate corporate payments, simplify your operations, and achieve greater financial control.
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Learn more about how 糖心Vlogpayment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.
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The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers.
糖心Vlogreceives compensation from some of the merchants identified in its blog posts. By linking to these products, 糖心Vlogis not endorsing these products or the content of the merchants鈥� websites. 糖心Vlogalso can鈥檛 ensure that merchants won鈥檛 change the content on the websites linked in this blog post.
Editorial note: This article was originally published on November 16, 2023, and has been updated for this publication.
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