What is Priority Payables?
Priority payables refer to the financial obligations and liabilities that an individual or organization must prioritize for payment over other liabilities due to their importance, urgency, or the potential consequences of non-payment. These payables often take precedence over other outstanding debts or expenses and are typically settled first to maintain the financial health and stability of the entity.
Some examples of priority payables include:
- Employee salaries and wages: Ensuring employees are paid on time is crucial for maintaining staff morale, productivity, and retaining talent. Non-payment of salaries can lead to legal issues and damage the organization’s reputation.
- Taxes: Failure to pay taxes can result in significant penalties, fines, and interest charges, as well as potential legal action from tax authorities.
- Secured debt: Secured debt is backed by collateral, and failure to make timely payments can lead to the seizure of assets, such as property or equipment, by the lender.
- Utility bills: Prioritizing the payment of essential utilities, such as electricity, water, and gas, is important to ensure the uninterrupted operation of the business.
- Critical suppliers: Paying key suppliers is essential for maintaining good relationships and ensuring the continuous flow of goods or services necessary for the business operations.
- Legal obligations: Court-ordered payments, such as child support, alimony, or settlements, should be prioritized to avoid further legal complications and potential penalties.
OTHER TERMS BEGINNING WITH "P"
- Paid in Capital
Paid in Capital represents funds raised by the business from equity (investors & owners), and not from revenue or ongoing operations. It is listed in the Equity Section of the Balance Sheet.
- Partner Buyout Financing
Partner buyout financing refers to the financial arrangement used to facilitate the buyout of a partner's ownership stake in a business by the remaining partners. This type of financing allows the remaining partners to acquire the shares or ownership interest…
- Past Due Invoice
A past due invoice is where your customer has not paid your invoice according to the agreed upon credit terms. For example, if your selling terms are net 30 and on the 31st day, your customer has still not paid…
- Pay Rate
In the provision of Temporary Agency Workers, the pay rate is the direct compensation paid by the staffing agency employer to its temporary employee. May be paid hourly, daily weekly or monthly.
- Pay when Paid Clause
A Pay when Paid Clause in the vendor agreement requires payment to the subcontractor when the prime contractor gets paid by the project’s owner. A prime contractor's obligation to pay is triggered upon receipt of payment. However, what happens if…
- Payroll Funding
Payroll funding is the act of selling your accounts receivable for cash up front. Also known as invoice factoring, it is a form of financing specifically designed to help staffing companies make payroll before they collect from their customers.
- Payroll Service Provider
Provide national, and sometimes international, Payroll Services taking custody of an employer’s payroll cash and assuming responsibility for payroll taxes and remitting net pay to employees.
- Peer Lending
Peer Lending, or Peer-to-Peer (P2P) Lending, is a practice of lending to individuals or businesses money through online services that match the borrowers with lenders.
- Penetration Rate
Used in relation to temporary staffing, the term ‘Penetration Rate’ is the proportion of people working on a temporary basis through staffing firms compared to total people in employment. In most developed staffing markets, the penetration rate is normally between…
- Per Diem
A Latin phrase that literally translates to “by the day” but is used to denote daily living expenses paid to technical, travel nurses, or other skilled temporary or contract employees while they are employed at a distant location requiring housing…
- Perishable Agricultural Commodities Act (PACA)
The Perishable Agricultural Commodities Act (PACA) protects businesses dealing in fresh and frozen fruits and vegetables by establishing and enforcing a code of fair business practices and by helping companies resolve business disputes. The Agricultural Marketing Service (AMS) is responsible…
- Personal Guarantee
A Personal Guarantee is an agreement signifying an individual, organization or a company accepts responsibility for a 3rd party debt in the event the debtor fails to pay.
A shipping term for the practice of grouping together shipments from multiple shippers into a truckload. This is used to reduce shipping costs.
Pre-Billing is submitting a request for payment before your product or services have been provided to your customer. If you are pre-billing this should be disclosed to the factoring company immediately.
- Prepaid Freight
Freight paid by the shipper to the carrier when merchandise is tendered for shipment. This is non-refundable, even if the merchandise does not arrive at the intended destination.
- Prime Plus Spread (Rate)
Prime plus spread, also known as prime rate or prime lending rate, refers to the interest rate that banks charge their most creditworthy customers for loans or lines of credit. The prime rate is typically based on the federal funds…
- Prime Rate
The Prime Rate is the interest rate that commercial banks charge their most credit-worthy customers, which are typically corporations. On December 21,2015 it was 3.5% in the US.
- Principal and Interest (P&I)
The Principal and Interest (P&I) is combined which represents the total scheduled loan payment amount. Principal (P) is the amount of the original loan still owed to the financial institution along with the interest (I) that is being applied to…
- Private Carrier
A company that uses its own fleet to deliver goods. A carrier that does not charge provides transportation service to the firm that owns or leases the vehicles.
- Private Trucking Fleets
Private trucking fleets serve the needs of their owners and do not typically offer commercial trucking services to other businesses. Private trucking fleets typically perform service and distribution functions.
- Process of Factoring
The Process of Factoring is: Complete the factoring application and submit with the required documents (A/R aging, sample invoices, Vendor Agreements & Purchase Orders) Receive a written proposal outlining the terms and rates from the Factoring company Sign the proposal…
- Production Finance
Work in Process or WIP Financing (not to be confused with work in progress, a term used in construction or the building trade) is the portion of your inventory that is being "worked". Because of its unsalable condition, most lenders…
- Promissory Note
A promissory note is a documented promise to repay borrowed money. Promissory notes are binding legal documents used to protect both the lender and the borrower. The promissory note is paper evidence of the debt that the borrower has incurred.
- Proof of Delivery (POD)
Proof of Delivery (POD) is a receipt signed by the recipient of goods, confirming delivery of a shipment along with the proper quantity and quality. It will many times include a copy of the Bill of Lading.
- Property, Plant, and Equipment (PP&E)
The Property, Plant, and Equipment (PP& E) is part of a company’s Balance Sheet representing long-term assets that are crucial for daily operation. PP& E includes a company's property, machinery, office equipment, vehicles, furniture, and fixtures, less any depreciation or…
- Purchase Order
A Purchase Order (PO) is a commercial document issued by a buyer to a seller, indicating types, quantities, quality, timeliness and agreed to price for products or services the seller will provide to the buyer. Sending a PO to a…
- Purchase Order Funding or PO Financing
Purchase Order Financing is a funding option for businesses that need cash to fill single or multiple customer orders. In many businesses, cash flow problems exist and there will be times when there are not enough monies available to cover…