Your A-Z dictionary of business terms, accounting jargon, and financial concepts explained simply.
An 11-digit unique identifier issued by the Australian Business Register to businesses operating in Australia. Required for invoicing, GST registration, and dealings with other businesses.
🛠️ Try Invoice BuilderMoney your business owes to suppliers and vendors for goods or services received but not yet paid for. Appears as a liability on the balance sheet.
🛠️ Try Financial ToolsMoney owed to your business by customers for goods or services delivered but not yet paid for. Appears as an asset on the balance sheet.
🛠️ Try Invoice BuilderAn accounting method where revenue and expenses are recorded when earned or incurred, regardless of when cash changes hands. Provides a more accurate picture of business performance.
The purchase of one business by another. Can involve buying all shares, assets, or a controlling interest in the target company.
The gradual reduction of a debt over time through regular payments, or the process of spreading the cost of an intangible asset over its useful life.
A high-net-worth individual who provides capital to startups in exchange for equity or convertible debt, typically at an early stage.
A comprehensive document that provides shareholders and stakeholders with information about a company's activities and financial performance over the past year.
An increase in the value of an asset over time, such as property, equipment, or investments.
The total predictable revenue a business expects to receive annually from subscriptions or recurring contracts.
Anything of value owned by a business that can be converted to cash. Includes cash, inventory, equipment, property, and accounts receivable.
An official examination and verification of a company's financial records and accounts by an independent party to ensure accuracy and compliance.
Commercial transactions between businesses, such as a manufacturer selling to a wholesaler or a wholesaler selling to a retailer.
Commercial transactions between a business and individual consumers, such as retail stores selling directly to customers.
A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time. Assets = Liabilities + Equity.
🛠️ Try P&L BuilderA form submitted to the ATO (Australian Taxation Office) to report and pay GST, PAYG withholding, and other tax obligations. Usually lodged monthly or quarterly.
Comparing your business metrics and practices against industry standards or competitors to identify areas for improvement.
The systematic recording and organizing of financial transactions in a business, including sales, purchases, receipts, and payments.
🛠️ Try Financial ToolsStarting and growing a business using personal finances and revenue from operations, without external funding or investors.
The commercial value derived from consumer perception of a brand name, including recognition, loyalty, and perceived quality.
The point at which total revenue equals total costs, resulting in neither profit nor loss. Essential for pricing and sales target decisions.
🛠️ Try Financial ToolsA financial plan that estimates income and expenses over a specific period. Used for planning, monitoring, and controlling business finances.
🛠️ Try Financial ToolsThe rate at which a startup or company spends its cash reserves before generating positive cash flow. Usually measured monthly.
The plan a company uses to generate revenue and make a profit, including its value proposition, target market, and cost structure.
A formal document outlining business goals, strategies for achieving them, market analysis, financial projections, and operational details.
The total cost of acquiring a new customer, including marketing, sales, and onboarding expenses divided by the number of new customers gained.
🛠️ Try CRMFinancial assets or resources available to a business for operations, investment, or growth. Can include cash, equipment, and other assets.
Money spent on acquiring, upgrading, or maintaining physical assets like property, equipment, or buildings. Usually depreciated over time.
An accounting method where revenue and expenses are recorded only when cash is received or paid, rather than when earned or incurred.
The movement of money into and out of a business. Positive cash flow means more money coming in than going out.
🛠️ Try Financial ToolsA financial statement showing how changes in balance sheet accounts and income affect cash and cash equivalents.
The percentage of customers who stop using a product or service during a given time period. A key metric for subscription businesses.
The direct costs of producing goods sold by a company, including materials and direct labor. Excludes indirect expenses like distribution.
🛠️ Try P&L BuilderAn asset pledged as security for a loan. If the borrower defaults, the lender can seize the collateral to recover losses.
A fee paid to an agent or salesperson for facilitating a transaction, usually calculated as a percentage of the sale value.
The act of adhering to laws, regulations, standards, and internal policies relevant to a business's industry and operations.
The percentage of visitors or leads who take a desired action, such as making a purchase or signing up for a service.
🛠️ Try CRMA department or function within a business that incurs costs but does not directly generate revenue, such as HR or IT.
An accounting entry that increases a liability or equity account, or decreases an asset or expense account. Also refers to borrowed funds.
A numerical rating representing a person's or business's creditworthiness, used by lenders to assess the risk of lending money.
Strategies, practices, and technologies used to manage and analyze customer interactions throughout the customer lifecycle to improve relationships and retention.
🛠️ Try CRM ToolAssets expected to be converted to cash or used within one year, including cash, inventory, and accounts receivable.
Debts or obligations due within one year, including accounts payable, short-term loans, and accrued expenses.
An accounting entry that increases an asset or expense account, or decreases a liability or equity account. Opposite of credit.
A measure of financial leverage calculated by dividing total liabilities by shareholders' equity. Shows how much debt is used to finance assets.
Individuals or businesses that owe money to your company for goods or services provided on credit. Also called accounts receivable.
The decrease in value of an asset over time due to wear and tear. Allows businesses to spread the cost of assets over their useful life for tax purposes.
An expense that can be directly attributed to producing a specific product or service, such as raw materials and direct labor.
A payment made on behalf of another party, often by a professional (lawyer, accountant) for expenses incurred during services.
A valuation method that estimates the value of an investment based on its expected future cash flows, adjusted for the time value of money.
A payment made by a corporation to its shareholders, usually from profits. Can be paid as cash or additional shares.
An accounting system where every transaction is recorded in at least two accounts—a debit in one and a credit in another—to maintain balanced books.
A comprehensive investigation or audit of a potential investment, acquisition, or business opportunity to confirm facts and assess risks.
A measure of operating performance that shows profitability before accounting and financial deductions. Useful for comparing companies.
A business or company, particularly one that is large, complex, or involves significant financial risk and initiative.
The end of the 12-month accounting period. In Australia, this is June 30. Important for tax reporting and financial statements.
The value of ownership in an asset or business after deducting liabilities. In accounting, it's assets minus liabilities.
Software systems that integrate core business processes like finance, HR, supply chain, and manufacturing into a single platform.
A financial arrangement where a third party holds and regulates payment of funds until both parties in a transaction fulfill their obligations.
A planned approach for an owner or investor to leave a business, such as selling the company, IPO, merger, or liquidation.
Costs incurred in the normal course of business operations, such as rent, salaries, utilities, and supplies.
🛠️ Try Financial ToolsA financial transaction where a business sells its accounts receivable to a third party at a discount to get immediate cash.
The price an asset would sell for on the open market when both buyer and seller have reasonable knowledge of relevant facts.
An Australian tax paid by employers on certain non-cash benefits provided to employees, such as company cars, health insurance, or entertainment.
An inventory valuation method assuming the oldest inventory items are sold first. Affects cost of goods sold and profit calculations.
🛠️ Try Inventory ManagerA 12-month period used for accounting and tax purposes. May or may not align with the calendar year depending on jurisdiction.
Business expenses that remain constant regardless of production or sales volume, such as rent, insurance, and salaries.
The time between when a payment is initiated and when the funds are actually received. Also refers to available cash in the register.
The process of estimating future business performance based on historical data, market trends, and other factors.
🛠️ Try Inventory ManagerA license that allows a franchisee to operate a business using an established company's brand, systems, and support in exchange for fees.
The cost of transporting goods from one place to another. A significant expense for businesses that ship physical products.
A unit measuring employed persons, where one FTE equals one full-time worker. Used to convert part-time hours to full-time equivalents.
🛠️ Try HR SuiteA set of accounting standards and procedures used to prepare financial statements. Ensures consistency and comparability across companies.
The master accounting document containing all financial transactions of a business, organized by account. The foundation of double-entry bookkeeping.
A labor market characterized by short-term, freelance, or contract work rather than permanent full-time employment.
An intangible asset representing the value of a company's brand, customer relationships, and reputation—often calculated during acquisitions.
Funds provided by a government or organization for a specific purpose that do not need to be repaid, often for small business development.
Revenue minus cost of goods sold, expressed as a percentage. Shows how much profit is made on products before operating expenses.
🛠️ Try P&L BuilderTotal revenue minus the cost of goods sold. Represents profit before deducting operating expenses, taxes, and interest.
🛠️ Try P&L BuilderThe percentage increase in a specific metric (revenue, customers, profit) over a defined period, indicating business expansion.
A value-added tax of 10% on most goods and services sold in Australia. Businesses must register for GST if turnover exceeds $75,000.
🛠️ Try Invoice BuilderAn investment or strategy designed to reduce the risk of adverse price movements in an asset, such as currency or commodity hedging.
A parent company that owns and controls other companies (subsidiaries) but doesn't produce goods or services itself.
The department responsible for recruiting, hiring, training, and managing employees, as well as handling benefits and compliance.
🛠️ Try HR SuiteA financial statement showing revenue, expenses, and profit or loss over a specific period. Also called a profit and loss statement (P&L).
🛠️ Try P&L BuilderThe rate at which the general price level of goods and services rises, eroding purchasing power over time.
The financial state where a business cannot pay its debts as they fall due. May lead to administration, liquidation, or restructuring.
A contract providing financial protection against losses, damage, or liability in exchange for premium payments.
The percentage charged by a lender on borrowed money, or the percentage earned on savings and investments.
Goods and materials held by a business for sale or use in production. A current asset on the balance sheet.
🛠️ Try Inventory ManagerA ratio measuring how many times inventory is sold and replaced over a period. Higher turnover indicates efficient inventory management.
🛠️ Try Inventory ManagerThe allocation of money or resources into assets, businesses, or projects with the expectation of generating future returns or profit.
A commercial document sent to a buyer listing goods or services provided, quantities, prices, and payment terms.
🛠️ Try Invoice BuilderThe first sale of a company's stock to the public, transitioning from private to public ownership.
An inventory management strategy where materials and products are ordered and received only as needed for production or sale, minimizing storage costs.
🛠️ Try Inventory ManagerA business arrangement where two or more parties agree to pool resources for a specific project while maintaining their separate identities.
A record of a business transaction in the accounting journal, showing accounts affected, amounts, and whether they're debits or credits.
A life or disability insurance policy taken out by a business on an essential employee whose loss would cause significant financial harm.
Measurable values that demonstrate how effectively a company is achieving key business objectives. Used to evaluate success.
🛠️ Try DashboardA potential customer who has shown interest in your product or service but hasn't made a purchase yet.
🛠️ Try CRMA contractual agreement where one party pays to use an asset (property, equipment, vehicle) owned by another for a specified period.
The use of borrowed capital to increase the potential return of an investment. Higher leverage means higher risk and potential reward.
A financial obligation or debt that a business owes to others. Includes loans, accounts payable, and accrued expenses.
An inventory valuation method assuming the most recently acquired items are sold first. Affects profit calculations differently than FIFO.
A flexible loan arrangement with a financial institution that allows a business to borrow up to a set limit and repay as needed.
The ability of a business to meet short-term obligations using assets that can be quickly converted to cash.
A business structure combining the liability protection of a corporation with the tax benefits and flexibility of a partnership.
A product or service sold at a loss to attract customers who will then buy other, more profitable items.
The total revenue a business can expect from a single customer over the entire duration of their relationship.
🛠️ Try CRMThe difference between selling price and cost, expressed as a percentage of the selling price. Different from markup.
🛠️ Try Product AnalyzerThe process of gathering and analyzing information about target markets, customers, and competitors to inform business decisions.
The amount added to the cost price to determine the selling price, expressed as a percentage of the cost.
🛠️ Try Product AnalyzerThe combination of two companies into one new entity, typically to increase market share, reduce costs, or expand capabilities.
A very small business, typically with fewer than 5 employees. Often a sole trader or family-run operation.
A loan used to purchase property, where the property itself serves as collateral. Repaid over a fixed term with interest.
Predictable revenue generated each month from subscriptions or recurring customers. Key metric for subscription businesses.
Payment terms requiring full payment within 30 days of the invoice date. Common variations include Net 7, Net 14, and Net 60.
🛠️ Try Invoice BuilderTotal revenue minus all expenses, taxes, and costs. The 'bottom line' profit of a business.
🛠️ Try P&L BuilderNet income divided by total revenue, expressed as a percentage. Shows what portion of each dollar earned translates to profit.
The total value of a business or individual after subtracting all liabilities from all assets.
A specialized segment of a larger market, targeting a specific group of customers with particular needs or preferences.
A customer loyalty metric measuring how likely customers are to recommend your business to others, on a scale of 0-10.
A goal-setting framework where objectives define what you want to achieve, and key results measure progress toward those objectives.
🛠️ Try Strategic PlanningDay-to-day expenses required to run a business, such as rent, utilities, salaries, and marketing. Excludes cost of goods sold.
🛠️ Try P&L BuilderRevenue minus cost of goods sold and operating expenses, before interest and tax. Shows core business profitability.
🛠️ Try P&L BuilderContracting out business processes or functions to third-party providers, often to reduce costs or access specialized expertise.
Ongoing business expenses not directly tied to creating a product or service, such as rent, utilities, and administrative costs.
The owner's share of the business after all liabilities are deducted from assets. Represents the net value belonging to the owner.
A financial statement summarizing revenues, costs, and expenses over a period to show whether the business made a profit or loss.
🛠️ Try P&L BuilderA business structure where two or more individuals share ownership, responsibilities, profits, and liabilities.
Australia's system for paying income tax throughout the year. Includes PAYG withholding (from employee wages) and PAYG instalments (for business income).
The total amount a business pays to its employees, including wages, salaries, bonuses, and deductions like taxes and super.
🛠️ Try HR SuiteA small amount of cash kept on hand for minor, everyday expenses that are impractical to pay by check or card.
In sales, the stages a prospect moves through from initial contact to closed deal. Visual representation of sales opportunities.
🛠️ Try CRMA fundamental change in a business's strategy, product, or target market in response to market feedback or changing conditions.
The method used to set prices for products or services, considering costs, competition, customer value, and market positioning.
🛠️ Try Product AnalyzerFinancial statements or invoices prepared based on projections or assumptions rather than actual completed transactions.
A proportional allocation of costs, payments, or other items based on the actual amount used or time served.
The process of finding, acquiring, and purchasing goods and services from external suppliers for business operations.
The financial gain when revenue exceeds total costs and expenses. Can be gross profit, operating profit, or net profit.
A commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.
A three-month period used in financial reporting. Q1 (Jan-Mar), Q2 (Apr-Jun), Q3 (Jul-Sep), Q4 (Oct-Dec) for calendar year.
A formal statement of price and terms offered to a potential customer for goods or services. Often precedes an invoice.
🛠️ Try Invoice BuilderA legal process where a receiver is appointed to manage a company's assets when it cannot meet its financial obligations.
The process of comparing two sets of records (like bank statements and accounting records) to ensure they match and identify discrepancies.
The cumulative net profit of a company that has been reinvested in the business rather than distributed to shareholders as dividends.
Total income generated by a business from its primary operations, before deducting any expenses. Also called sales or turnover.
The process of identifying, assessing, and controlling threats to a business's capital, earnings, and operations.
A measure of profitability calculated as (gain from investment - cost of investment) / cost of investment, expressed as a percentage.
A payment made to the owner of a patent, copyright, franchise, or resource for the right to use their property.
A projection of future financial results based on current performance, assuming conditions remain the same.
A software distribution model where applications are hosted in the cloud and accessed via the internet, usually through subscription.
The ability of a business to grow and manage increased demand without a proportional increase in costs or reduction in quality.
The initial capital raised by a startup to develop its product, conduct market research, and prepare for growth.
A unique identifier for each product or service a business sells, used for inventory tracking and management.
🛠️ Try Inventory ManagerA formal contract between a service provider and customer defining the expected level of service, response times, and remedies.
A business structure where one person owns and operates the business, with unlimited personal liability for business debts.
Any person or group with an interest in a business, including owners, employees, customers, suppliers, and the community.
One-time expenses incurred when launching a new business, including licenses, equipment, marketing, and legal fees.
An Australian reporting system where employers report payroll information to the ATO each time employees are paid.
🛠️ Try HR SuiteAustralia's compulsory retirement savings scheme. Employers must contribute a percentage (currently 11.5%) of employee wages to a super fund.
🛠️ Try HR SuiteThe entire network of organizations, resources, and activities involved in producing and delivering a product to the end customer.
🛠️ Try Inventory ManagerA strategic planning tool analyzing Strengths, Weaknesses, Opportunities, and Threats to understand a business's competitive position.
🛠️ Try Strategic PlanningAn expense that can be subtracted from gross income to reduce taxable income, lowering the amount of tax owed.
An invoice that includes GST/VAT details, required for businesses registered for goods and services tax. Must show the tax amount separately.
🛠️ Try Invoice BuilderA non-binding document outlining the key terms and conditions of a proposed investment, acquisition, or business deal.
A unique 9-digit identifier issued by the ATO to individuals and organizations for tax and superannuation purposes in Australia.
A legally registered symbol, word, or phrase that identifies and distinguishes a company's products or services from competitors.
A bookkeeping report listing all accounts with their debit or credit balances to verify that total debits equal total credits.
A legal entity where a trustee holds and manages assets for the benefit of beneficiaries. Common business structure in Australia.
The total sales revenue of a business over a period. Also refers to the rate at which employees leave and are replaced.
The process by which a financial institution assesses and assumes the risk of issuing insurance or guaranteeing a loan or investment.
A privately held startup company valued at over $1 billion. The term reflects the rarity of such successful ventures.
A factor that differentiates a product or service from competitors—the reason customers should choose you over alternatives.
The process of determining the current economic value of a business, asset, or investment using various financial models.
Business expenses that change in proportion to production or sales volume, such as raw materials, packaging, and sales commissions.
A consumption tax placed on products at each stage of production where value is added. Used in many countries (similar to GST).
A person or company that sells goods or services to another business. Also called a supplier.
Financing provided by investors to startups and small businesses with high growth potential in exchange for equity stakes.
The process by which an employee earns the right to employer-provided benefits (stock options, super) over a specified period.
The sale of goods in large quantities to retailers or other businesses, typically at a lower per-unit price than retail.
Laws and practices designed to protect the health, safety, and welfare of workers. Employers must provide a safe working environment.
🛠️ Try HR SuiteTax deducted from payments at the source, such as income tax withheld from employee wages by employers before paying the employee.
Current assets minus current liabilities. Measures a company's short-term financial health and operational efficiency.
A reduction in the value of an asset, typically due to it being uncollectible (bad debt) or obsolete. Also a tax deduction for business expenses.
The end of a company's fiscal year, when annual financial statements are prepared and annual reports are filed.
The return on an investment, typically expressed as an annual percentage of the investment's cost or current market value.
A comparison of a metric from one year to the same period in the previous year, used to track growth or decline.
🛠️ Try P&L BuilderA budgeting method where all expenses must be justified from scratch for each new period, rather than basing budgets on previous spending.
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