Definition

Measuring a company’s ability to borrow money based on its past financial behavior. A better score can mean easier access to loans and lower interest rates.

What to consider

  • Understand local and state sales tax laws.
  • Keep detailed records for tax filing.
  • Set aside collected tax funds to avoid cash flow issues.

Real world scenarios

  • A boutique in New York collects sales tax on every transaction and remits it monthly.
  • An online retailer calculates sales tax based on customer location.
  • A local restaurant tracks sales tax collected to ensure accurate reporting.

Related terms

Entrepreneurial Finances