Glossary of Business Management Terms

A Comprehensive Dictionary of Business Management Terms

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If you are a new business owner, you will be listening to a few terms you are no longer acquainted with. This listing of 30 commercial enterprise phrases allow you to understand some of the jargon.

Accounts Payable

This is an accounting time period that refers to the credit debt your enterprise has incurred. Many groups use credit for elements, uncooked substances, or inventory purchases. The organizations you owe charge to are considered an account. These debts may be placed on a file for viewing. A short look at this record reveals the identities of your lenders, how much cash is owed to every creditor, and the way lengthy that money has been owed.


Every business has assets, which in its best terms are objects with price. All corporations need assets to supply merchandise or promote offerings. An asset is whatever a business owns.

According to usually widely wide-spread accounting standards, the sum of the owner's (shareholders') fairness and a commercial enterprise' liabilities equals the entire property a business has.


A B2B (business to business) organisation is one that offers services or products at once to different corporations. The commercial enterprise may be a consumer, inclusive of while a agency purchases material for its products, or it is able to be a supplier imparting merchandise to other companies.


B2C is an acronym for business-to-purchaser. A B2C commercial enterprise is one which sells services or products immediately to the consumer. 

Balance Sheet

A stability sheet is a statement of the economic function of a enterprise which describes the property, liabilities, and proprietors' fairness at a selected point in time. In different phrases, the stability sheet illustrates the commercial enterprise's internet well worth.


Benchmarking, or aim setting, allows a company to assess the possibilities they will have for enhancing a number of areas in any of its features. A baseline is mounted, and metrics are evolved with which to examine the future performance of the features.

Bottom Line

Generally, the term bottom line refers to the ultimate line in a monetary statement of a commercial enterprise, wherein a income or loss is shown. It has also been followed as a term to update "What this means is..." in displays and papers.

Cash Flow

Cash flow is the money that is transferring (or flowing) inside and outside of a business in any given month. Cash may be coming in from customers or clients, who are shopping for services or products. Cash may be going out in the form of bills for expenses like hire or a loan. 


The Chief Executive Officer (CEO), is the pinnacle executive in an organization. That top government may have many titles. The top government also can be a dealing with accomplice or president. Most companies are replacing the name of their pinnacle government with CEO.

Continuous Improvement Plan

A continuous development plan is a hard and fast of activities designed to carry sluggish, ongoing improvement to products, offerings or approaches via steady evaluate, dimension, and action. 

Employee Turnover

When personnel leave a enterprise and must be replaced its known as employee turnover. A sure amount of turnover is unavoidable, but too much can ruin a agency. The two trendy forms of turnover are voluntary (together with resigning) and involuntary (inclusive of layoffs).


Equity is the fee of the capital contributed by proprietors or stockholders. This is also called shareholders' fairness.

Financial Accounting Standards Board

The Financial Accounting Standards Board (FASB) is the number one body in the United States that sets accounting standards. The board updates and publishes generally ordinary accounting principles for the standardization of accounting processes.

Fiscal Year

The government monetary 12 months (FY) usually starts on October 1 of a year and ends on September 31 of the subsequent 12 months. For example, FY 2015 started out on October 1, 2014, and ended on September 31, 2015.

The fiscal 12 months for some enterprise sorts mirrors the calendar 12 months. Sole proprietorships, partnerships, and S agencies comply with the calendar year for tax functions, while corporations are allowed to design their personal financial 12 months.

Fixed Assets

Fixed property are something a commercial enterprise owns, such as homes or system.


Generally familiar accounting ideas (GAAP), are a hard and fast of regulations and practices having big authoritative guide. GAAP is the same old that businesses use to collect their economic statements which includes the income declaration, balance sheet, and announcement of coins flows. 

Golden Parachute

A golden parachute is a name given to the clause in a pinnacle government's employment agreement or agreement that defines the payout the individual will acquire should they be terminated by using the business enterprise earlier than the stop of their settlement.


An insider in a corporation is a person who has get admission to to critical records about a enterprise. This records ought to affect investor decisions that would effect the corporation's stock charge or valuation.


Liabilities are quantities owed with the aid of a business at any individual time. They can be expressed as payables for accounting functions. Included in liabilities are loans, credit payments due, taxes, or some other form of debt in that you are obligated to pay.

Line Manager

A line supervisor is someone who directly manages other personnel and operations of a commercial enterprise whilst reporting to a higher ranking manager. The line manager time period is often used interchangeably with direct supervisor.

Matrix Management

Matrix management is generally used in businesses in the event that they have a need to share assets throughout functions (i.e, exclusive departments). In a matrix management machine, an man or woman has a primary record-to boss and also works for one or greater managers, most usually on tasks.

Non-Disclosure Agreement

For many organizations, one of their most valuable property is their intellectual belongings which they must preserve secret. A non-disclosure settlement (NDA) is a criminal file between employee and organization, wherein the organisation concurs to reveal certain statistics to the worker for a particular purpose. The worker then becomes legally sure now not to disclose that statistics to every person else.

Profit and Loss Statement

A income and loss declaration (referred to as an earnings declaration beneath GAAP), is a commercial enterprise file that shows net profits as the distinction among sales and costs. 


A business's revenue is the money generated with the aid of all its operations earlier than deductions are taken for costs. Revenue can come from the sale of the agency's services or products, from the sale of surplus device or belongings, or from the sale of stocks of stock inside the agency. It can come from numerous different sources such as interest, royalties, and fees. 

Return On Investments

Return on investment (ROI) ratios are a set of enterprise ratios that indicate the overall performance of capital contributed to the employer from traders. There are many ratios for returns on funding. Generally, ROI refers to 1 formulation used to gauge the go back of investment:

Net Profit ÷ Cost of Investment = ROI

Senior Manager

Senior managers (generally used in big organizations with multiple layers of control) have responsibilities and authority broader in scope than a the front-line supervisor. Senior managers are commonly placed to move into a director or popular manager function.

Shewhart Cycle

The Shewhart Cycle is most often a circle and not using a beginning or quit, that means that the non-stop improvement processes of commercial enterprise by no means prevent. The cycle has 4 levels: planning (while you become aware of an possibility and create a plan), doing (to check the plan on a small scale), checking (to assess the gain of the plan), and performing (enforcing the plan on a bigger scale after which monitoring consequences). 

Subject Matter Expert

A situation remember professional (SME) is an character with a deep understanding of a specific method, feature, era, device, fabric, or kind of device. Individuals specified as concern remember specialists are generally sought out by others inquisitive about learning extra about, or leveraging, their particular understanding to remedy unique problems or help with unique technical challenges.

Variable Expenses

Variable fees are the ones commercial enterprise charges which range depending on the volume of enterprise, income, or the volume of transactions. Examples of variable prices include postage and delivery for purchaser purchases, buy of uncooked materials, inventory of merchandise to be bought, hourly wages of employees, and sales commission.


Vision is the dream of what the owners need the company to be. It ought to not be stressed with approach, which is the huge-scale plan the business enterprise follows to make the dream happen.