Communication is key to running a successful business. But communicating can become tricky when it involves confusing terminology used by business-savvy colleagues.
To avoid confusion, it’s important to develop a general understanding of business jargon. This glossary will help business professionals looking to brush up on their vocabulary or those interested in having well-informed discussions.
Below are 20 popular business terms used across different professional fields.
A professional who determines annual employee liability related to specific pension (as per Oxford, “a regular payment” from an investment fund during retirement) benefits.
Something of value that’s owned by an individual or business. A small business’s assets may include the money in its bank accounts, its inventory and equipment.
- Balance sheet
The balance sheet documents a company’s financial health at specific points in time. It will usually be available at the end of the quarter or fiscal (as per Merriam-Webster, “of or relating to taxation, public revenues, or public debt”) year.
- Best practice
Best practices are accepted as standard methods for performing a task for how they most effectively produce results.
A loan that’s typically taken out by corporations or governments. The borrower may pay the lender interest during the bond’s term. They will repay the original loaned amount at the end of the term, when the bond matures.
- Business to business (B2B)
B2B transactions take place when a company sells goods or services to another company.
- Business to consumer (B2C)
B2C transactions occur when a company sells goods or services to end-users (those who use the products).
- Business plan
A business plan is a written document that can act as a roadmap for a company. It usually includes an overview of the company. It also includes a summary of its finances, products and services and an analysis of its industry and competitors.
- Cash flow
The total amount of cash and cash-equivalents flowing in and out of a business.
- Cash flow statement
A financial statement that shows a business’s cash flow over a certain period of time. Creating and reviewing cash flow statements can help business owners better manage the company’s money.
- Debt load
The total of all the money a business owes people or businesses.
A deliverable is a final product given to the client at the end of a project. It can include decks, research and financial models.
In business, equity is a business’s value, and someone who has equity in the company owns part of the company. Two business partners who own equal parts of a business both have an equal amount of equity in the company.
- Fixed assets
Long-term assets that aren’t easily converted into cash. These could include property, physical infrastructure and equipment.
- Fixed cost
Unlike variable costs, fixed costs stay the same regardless of production changes. For example, a company pays the same amount in monthly rent.
A bill businesses send to customers when selling a product or service. It may also be a bill received from a supplier after buying products or services.
Unpaid debts that the business owes an individual or business. Examples could include unpaid taxes, loans, interests or wages to employees who have already earned the pay.
- Net profit
Also known as income, profit and net profit after taxes. The net profit is the total amount of money a business earns after paying all its expenses.
Revenue refers to the income generated from a business’s operations and activities.
Also known as “shares” or “equity,” this type of investment gives the investor partial ownership in the issuing corporation.
For reference and to learn more business terms, consult the sites below.
Melanie is the contributing editor for Business Hub. She has a background in journalism and feels very passionate about storytelling. When she isn’t working, you’ll find her listening to music (a little too loudly), rewatching the same movies she’s seen too many times or reading a really good book.