A loan production office (LPO) is an administrative division of a bank, that, as the name implies, deals solely with loan-related activities. The Federal Reserve defines an LPO as “a staffed facility, other than a branch, which is open to the public and provides lending-related services such as loan information and applications.”
Lockbox banking is a service provided by banks to companies for the receipt of payment from customers. Under the service, the payments made by customers are directed to a special post office box instead of going to the company. The bank goes to the box, retrieves the payments, processes them and deposits the funds directly into the company’s bank account.
The unemployment rate is the share of the labor force that is jobless, expressed as a percentage. It is a lagging indicator, meaning that it generally rises or falls in the wake of changing economic conditions, rather than anticipating them. When the economy is in poor shape and jobs are scarce, the unemployment rate can be expected to rise. When the economy is growing at a healthy rate and jobs are relatively plentiful, it can be expected to fall.
The empirical rule, also referred to as the three-sigma rule or 68-95-99.7 rule, is a statistical rule which states that for a normal distribution, almost all data falls within three standard deviations (denoted by σ) of the mean (denoted by µ). Broken down, the empirical rule shows that 68% falls within the first standard deviation (µ ± σ), 95% within the first two standard deviations (µ ± 2σ), and 99.7% within the first three standard deviations (µ ± 3σ).
Ability-to-pay taxation is a progressive taxation principle that maintains that taxes should be levied according to a taxpayer’s ability to pay. This progressive taxation approach places an increased tax burden on individuals, partnerships, companies, corporations, trusts, and certain estates with higher incomes.
The Nonaccrual Experience Method (NAE) is an accounting procedure allowed by the Internal Revenue Code (IRC) for handling bad debts. This method can only be applied to bad debts for services performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health, law, or the performing arts. The company in question also must have average annual gross receipts for any three prior tax years of less than $5 million.
A waiver is a legally binding provision where either party in a contract agrees to voluntarily forfeit a claim without the other party being liable.
Wassily Leontief was a Nobel Prize-winning Russian-American economist and professor who contributed several insightful theories to economics. Leontief’s Nobel Prize research focused on input-output analysis, which breaks down the sectors of the economy and discusses how changes in one sector of the economy can affect other sectors.
A billing cycle is the interval of time from the end of one billing, or invoice, statement date to the next billing statement date for goods or services that a company provides on a recurring basis. A billing cycle is most often set on a monthly basis but can vary in time length depending on the type of product or service rendered.
Thrift may mean saving money, but a thrift is a savings and loan association. Thrifts also refer to credit unions and mutual savings banks that provide a variety of saving and loans services. Thrifts differ from commercial banks in that they can borrow money from the Federal Home Loan Bank System, which allows them to pay members higher interest.