Accountant a qualified professional who is skilled at financial reporting and business analysis.
Account a record of a business transaction. When you buy on credit, the company you are dealing with sets up an "account" to record what you have purchased and what you have paid. Accounts are also established for customers to whom you extend credit.\
Account payee only when this term is written on crossed cheques, the bank can only pay the funds to the bank account of the payee.
Accounts payable is a record of funds you owe to suppliers and other business creditors for of purchases of stock and overheads and other liabilities including taxes.
Accounts receivable is a record of funds your customers owe you.
Accreditation the certification by a statutory or approved authority of the facilities, capabilities, objectivity, competence and integrity of a business to provide a specified service.
Actuary a business professional who deals with the financial impact of risk and uncertainty and is often engaged in the insurance and finance sectors.
Ad valorem according to value. Applied to customs duty, it means a percentage charge on the value, rather than the weight or quantity of goods.
ADSL a form of high-speed internet access which uses the existing copper telephone wire so you can speak on the phone at the same time as use the internet.
Affidavit a declaration in writing on oath, made before a person legally qualified for the purpose eg a lawyer or a Justice of the Peace.
After-sales service service provided to a customer during a warranty period
Alignment the positioning of a body of text. Text can be positioned to the left, right, or centre of a page. For the best, consistent alignment, website designers use tables and cascading style sheets (CSS).
Amortise the gradual process of depreciating or writing off the cost of an asset, or reducing a liability by means of a sinking fund, over a period of time.
Asset are economic resources owned by business or company. Anything tangible or intangible and include cash in the bank, accounts receivable, shares, property or buildings, equipment, fixtures, stock or stock in production.
Audit detailed checking of the financial records of a business by an independent qualified person (auditor) in order to verify correctness or detect errors or fraud.
Australian Business Number (ABN) an identifier for dealings with the Australian Taxation Office and other government agencies.
Australian Company Number (ACN) - the number allocated by the Australian Securities and Investments Commission (ASIC) when a body becomes registered as a company under corporations law.
Authorised capital the total amount of capital which a company, by its memorandum of association, is authorised to offer for subscription. See also, paid up capital.
Award outline the rights and obligations of employers and the legally binding minimum wage rates and employment conditions for employees.
B2B business communications with other businesses such as the placement of purchase orders with your supplier.
B2C business communications with your consumers, such as a regular newsletter or sale completed via your website.
B2G business communications with government entities such as online taxation lodgement.
Bad debts A bad debt occurs when payment is not received within the terms of trade period for goods or services rendered..
Balance The total of funds remaining in an account after accounting for all transactions (deposits and withdrawals).
Balance sheet an important business document that shows what a business owns and owes at the date shown. Essentially a "balance sheet" is a list of business assets and their cost on one side and a list of liabilities and owners' equity (investment in the business) on the other side
Bandwidth (IT) refers to the capacity of a telecommunications link and is a measure of how fast data can be moved around. It is measured in either bits per second (bps) or cycles per second (hertz/Hz and megahertz/MHz). The greater the bps or hertz, the wider the bandwidth and the more data that can pass down a channel at any one time.
Bank draft a written instruction to a bank's agent to pay a sum of money to the person specified on the draft. A safe and convenient way of remitting money overseas.
Bank reconciliation a comparison between the bank's record of transactions and the record of the firm's cash book. After taking into account such items as unpresented cheques and bank charges, the two records should show an identical balance.
Bankrupt a debtor, who has volunteered or been forced to appear before a bankruptcy court and has been judged insolvent because she/he has insufficient assets to meet the demands of creditors when they fall due.
Barcode a unique printed pattern of wide and narrow vertical bars used to represent numerical codes, designed to be read by an optical scanner.
Best practice a comprehensive, integrated and cooperative approach to the continuous improvement of all facets of an organisation's operations. It is a method by which leading-edge companies manage their businesses to achieve world-class standards of performance.
Bill of sale a document which formally transfers ownership of property specified in the document from the borrower to the lender, until such time as the debt has been paid in full.
Bona fide in good faith, honestly, without fraud, collusion or participation in wrong doing.
Bond payment by a tenant to a landlord before the tenant occupies the premises and from which the landlord may be able to deduct arrears of rent or the cost of repairing damage.
Bookkeeping the process of recording business transactions in the accounting records.
Brainstorming a problem-solving method involving members of a group contributing ideas.
Break-even point the exact point at which volume of sales is sufficient to cover all costs.
Bridging loan a loan to provide short-term finance, usually to buy property or land, where the loan is to be cleared by longer-term borrowing or the sale of assets.
Budget an estimate of expenses and revenue.
Business Activity Statement (BAS) a single form used to report business tax entitlements and obligations, including the amount of GST payable and your input tax credits.
Business coach a consultant who specialises in providing support, advice and encouragement to business owners.
Business continuity the ability of a business to adapt and continue to operate through disruption and changes in circumstances.
Business development activities undertaken to generate additional sales and revenue generating opportunities.
Business establishment costs costs involved in setting up a business in readiness for trading. These include company set-up costs, statutory fees and charges for licences, accreditation, fit out of premises, purchase and installation of equipment, as well as the costs of sample inventory.
Business modelling software software that allows business managers to analyse the potential outcomes of changing specific variables within their operations.
Business name the name of a business officially listed Register of Business Names in the state or territory.
Business plan a document, completed periodically, which outlines the business goals and how they will be achieved usually prepared in conjunction with the strategic plan.
Business viability the ability of a business to generate sufficient profits to provide adequate returns to owners and also to reinvest in the business.
Capital the total owned and borrowed funds in a business.
Capital gain a financial gain made from selling fixed assets such as land, buildings, or a business at a price above the original purchase price.
Capital requirement a list of expenses that must be met to establish a business. Even before a business is started, owners should start keeping records.
Cash includes all money in the bank, in the cash drawer and in petty cash. Banknotes, coins, bills and negotiable securities (like cheques) are cash. But so is the money you can draw on demand your bank accounts or savings accounts also represent "cash".
Cash book a record of cash payments and receipts, showing these under various categories.
Cash discount a deduction that is given for prompt payment of a bill.
Cash flow the flow of internal funds generated within the business as a result of receipts from debtors, payments to creditors, drawings and cash sales.
Cash receipts the money received by a business from customers.
Caveat emptor 'let the buyer beware' (latin). The condition of sale is that the purchase is at the buyer's risk.
Chamber of commerce An association of business people gathered to provide contact, support, leadership and lobbying.
Client/server network a network where one computer acts as the central storage device for files/programs that can be accessed by PCs on the network.
(Industry) code of practice A set of industry-specific guidelines, usually developed by an industry body, created to guide the conduct of industry members in the absence of binding legislation.
Collateral security provided by a borrower to cover the possibility that the loan will not be repaid.
Collections policy a policy relating to the process of debt collection, usually including clear guidance on how the business handles outstanding debts.
Commercialisation the process of bringing a business opportunity to market, including feasibility studies, a business case and production.
Company a business owned by a group of people called shareholders, which has its own legal identity separate from its owners.
Compliance steps taken to ensure that your business is operating in accordance with all applicable legislation, regulations, standards, codes of practice and contractual requirements. Compliance can also include conformity to internal policies and procedures.
Computer-Aided Design and Drafting (CADD) a software program that replaces manual drafting on paper by allowing the designer to formulate projects on screen, using two and three-dimensional representations.
Computer database design and estimating package a software program that enables the user to develop, store, retrieve and edit a growing bank of designs, and automatically predict the cost of producing a design in a particular material or construction method.
Consequence (AS/NZS 4360) (Risk Management) An outcome or impact of an event. (Note: There can be more than one consequence from one event; consequences can range from positive to negative; consequences can be expressed qualitatively or quantitatively; and, consequences are considered in relation to the achievement of objectives.)
Constitution - regulations governing the relationships between the shareholders and directors of the company (formerly 'Articles of Association' and 'Memorandum of Association').
Consultant a professional who provides services and/or advice, usually relating to a specific area of expertise, to businesses and individuals, often on an ad-hoc or short-term basis.
Consumer Price Index (CPI) a measure of the aggregate rise or fall in prices of commonly used goods and services, published by the Commonwealth Government as a basis, among other things, for deciding what overall increases should be made to wages and salaries.
Consumer protection laws and regulations relating to the prevention of disadvantage or harm to purchasers of goods and/or services. For more information, see Department of Fair Trading or ACCC.
Content Management System (IT) (CMS) infrastructure system that is used to store and retrieve information on a website.
Contingency planning the part of risk management that aims to ensure that swift and appropriate action is taken when an undesirable outcome, particularly an emergency situation, arises. It has two broad aspects: development of crisis management plans aimed at maximising safety for people and minimising damage and disruption during a crisis; and, development of business resumption plans or continuity plans aimed at ensuring business functions are recovered as quickly as possible after a crisis.
Contingent liability a liability which will only arise on the occurrence of a certain event like, the guarantor of a loan being asked to honour the guarantee if the borrower defaults.
Contract a legally binding agreement between two or more parties.
Controllable expenses those expenses that can be controlled or restrained by the business person.
Copyright a type of property right which protects the expression of ideas such as literary or dramatic works, television productions, drawings and the like, from being used for commercial gain without permission of the copyright owner. Registration is not a prerequisite for protection.
Co-signers people who together share responsibility for a business by jointly signing documents or cheques.
Cost-benefit analysis a method of evaluating projects or investments by comparing the present value or annual value of expected benefits to costs.
Cost of goods sold the total cost to the business of the goods sold during an accounting period. In its simplest form, this is the sum of the opening stock plus all purchases less the closing stock.
Cover note a temporary certificate of insurance issued by an insurance company to give immediate insurance cover until a formal document is prepared and issued.
Credit an entry made on the right hand side of an account and indicating a gain to a liability, owner's equity or revenue account.
Credit application a form to be completed by an applicant for a credit account, giving sufficient details to allow the seller to establish the applicant's creditworthiness.
Credit card transfers the electronic transfer of funds which are debited to the customer's credit card.
Credit control any policy designed to increase or decrease credit.
Credit limit the upper limit of credit that a business will allow a customer to have.
Creditor a person or business to whom money is owed.
Crossed cheque a cheque across which two parallel lines have been drawn. The effect of crossing a cheque is to direct your bank to pay the cheque only through another bank account.
Current assets includes cash, short-term deposits, customers' accounts, stock (includes work in progress, raw materials and finished goods), that will be converted into cash during the normal course of business, within a year.
Current liabilities short-term debts such as bank overdraft, creditors and provisions set aside to pay taxation and other commitments (for example, holiday or long-service leave) and expected to come due within one year of the balance sheet.
Custom-written software software that is tailor-made for a client's specific purposes (as distinct from generic or packaged software bought off the shelf).
Customer Relationship Management (CRM) the systematic collection and utilisation by a business of data relating to the identity, spending patterns and interests of each of its customers, in order to foster customer loyalty through individualised correspondence and tailored benefits and offers.
Database (IT) a collection of information stored in a computer and organised in categories to facilitate retrieval and analysis.
Debenture a fixed interest investment in a company, which has priority for interest payments, generally redeemable after the lapse of a specified time.
Debit a bookeeping entry representing a gain to assets, owner's equity or expense account.
Debt that which is owed. If you borrow money, buy something on credit or receive more money on an account than is owed, you have a "debt".
Debt capital money from external sources used to finance a business. See also equity capital.
Debtor a person or business who owes the business money
Default to fail to meet an obligation when due, such as paying a debt.
Demand an order to comply with an obligation. In business, paying on "demand" means that the obligation must be satisfied when it is due under a contract.
Depreciation expense gradual reduction of the value of a fixed asset and gradual application of this cost to the expenses of a business over the useful life of the asset.
Depreciation schedule a schedule showing depreciable assets, the date of purchase, its cost, the percentage by which it is depreciated each year and written down current value.
Direct costs the costs incurred, in addition to fixed costs, as a result of manufacturing a product or providing a service. Direct costs are made up of direct material, direct labour and direct manufacturing or servicing costs.
Director (company) an individual who is elected by shareholders or members to oversee the strategy of the business.
Director's guarantee a personal guarantee given by a director of a company that she/he will be personally liable for a debt or other liability of the company. Usually requested in credit applications, leases, loans and hire purchase agreements.
Disbursements funds paid by a business in settlement of purchases.
Discount a deduction made from the normal cost or purchase price.
Dishonoured the word used to describe a cheque, which the bank will not pay, because the customer's account lacks sufficient funds.
Diversification the process of producing a number of different products or investing in a number of different areas in order to reduce exposure to risk and/or increase exposure to opportunities.
Dividend a distribution of the profits of a company among its members or shareholders.
Domain name (IT) the unique name, often called the "internet address" or "web address" or "URL", which identifies an internet site. Domain names always have two or more parts separated by dots. Companies who own their own domain name (as distinct from a sub-domain name) have the advantage of more direct, speedier communications via the internet and are not dependent on the services of a third party.
Drawer the person who writes a cheque in payment for goods or services.
Drawings withdrawals of assets (usually cash) from a business by a sole proprietor or a partner. Drawings are recorded in a loan account with the individual.
e-business the use of the internet to conduct business.
e-commerce the sales part of the e-business process.
e-commerce site a website set up for the purpose of selling goods and/or services online.
electronic data interchange (EDI) exchanging information forms electronically, such as invoices and orders.
EFTPOS is electronic funds transfer at point of sale and an electronic method of making a payment to a retailer at the point of sale.
Encryption encoding information so that it cannot be deciphered by an unauthorised person.
Entity an individual (sole trader), partnership, a body corporate, a corporation, an incorporated association or body of persons, a trust or superannuation fund.
Entrepreneur a person who owns, organises and manages a business and assumes significant accountability for the inherent risks and the outcome.
Environmental management The use of management practices that minimise adverse environmental impact. The three main issues that affect managers are those involving politics, programs, and resources.
Equities represents a share of ownership in a company.
Equity capital money provided by the business owner/s to finance the business.
Equity financing raising funds through issuing new shares to existing or new shareholders.
Event (AS/NZS 4360) (Risk Management) the occurrence of a particular set of circumstances. (Note: The event can be certain or uncertain; the event can be a single occurrence or a series of occurrences.)
Excess the portion of an insurance claim that the policyholder is responsible for.
Excise a tax applied to certain goods produced or manufactured in Australia, such as alcohol, tobacco and petroleum and alternative fuels.
Expenses the costs associated with business revenue, for example, rent, advertising and wages.
Export the trade of goods and services to markets outside the country of origin.
Exit strategy a plan that sets out how the current owners plan to leave the business. The strategy normally includes the method of the exit, a succession plan for transition to the new owners, and details such as timing and sale price.
Facility A loan extended by a bank or financial institution to a business in need of operating capital. This may take several forms, from a short-term loan to a line of credit.
Factoring involves the cash purchase of a business' sales invoices at a discount, after which, the factoring company collects the invoiced amounts from the business' customers. Factoring is used where the business requires immediate access to cash.
Fair trading see 'Consumer Protection'.
Feasibility study part of an investment decision making process, involves the examination of a particular project or business to assess its probability of operating successfully.
Fidelity guarantee insurance insurance to cover the risk of losses resulting from the dishonesty of employee/s.
Finance where money is lent to individuals or corporations for consumption or investment, and interest is charged on the loan.
Financing where businesses obtain finance, either to start a business or expand operations.
Financial statements formal reports prepared from accounting records describing the financial position and performance of the business.
Financial year an accounting period of 12 months. In Australia the financial year spans the period 1 July to 30 June.
Firewall (IT) security software that prevents unauthorised access to a company's networks by outside users.
Fixed costs as opposed to variable costs, expenses that do not change in proportion to the activity of a business, within the relevant period or scale of production. For example, a retailer must pay rent and electricity bills irrespective of sales.
Fixed assets the land, buildings, vehicles, materials and equipment owned by a business, and which are used to earn revenue rather than being for sale.
Forecast (cashflow/budget) anticipates likely future business performance, often based on previous performance.
Franchise a business arrangement in which knowledge, expertise and often a trade mark or trade name is licensed to an operator, generally for an initial fee and a yearly payment.
Franchisee the purchaser of a franchise licence who operates one or more outlets of the franchise business.
Franchisor the owner of a franchise licence.
Fusion insurance covers loss caused by damage to an electric motor by an electric current and is particularly important for refrigerated inventory.
Gateway (IT) an agent that sits between two parties of an electronic funds transfer. For example, a payment gateway takes a customer payment from your website and gives you access to the funds.
Gearing or leverage is the ratio between the business's debt or liabilities and shareholders equity.
Goodwill the excess price asked for the sale of a business over the value of its physical assets; Goodwill is an intangible asset, the price of which represents the estimated value of the existing client base and future profits.
GST-free some supplies are GST-free, where there is no charge for GST however there remains an entitlement to claim input tax credits for goods and services purchased by the business.
Gross the total overall amount. For example, gross profit is the trading profit of a business without any deductions for business expenses.
Gross profit the excess of net sales over cost of goods sold usually expressed as a percentage.
Growth asset an asset intended to allow a business to grow by increasing its capacity, capability, or the range of products and services it offers.
Growth plan a document that sets out how the business will grow, including the steps it will take to develop its capacity, capability, or the range of products and services it offers.
GST (Goods & Services Tax) A broad-based tax applied to the sale price of most goods and services in Australia.
Hazard (AS/NZS 4360) (Risk Management) a source of potential harm.
Health and safety See 'Occupational health and safety''.
Hire purchase a system for financing the purchase of plant and equipment, where the ownership is vested with the lender until the final payment is made. The borrower is required to place a deposit and make periodic (usually monthly) repayments at a flat rate of interest.
Hits (IT) every click on a website will generate a "hit". A web page with 15 graphics and one paragraph will register 16 hits every time it is viewed. Hits are not commonly used in website statistics anymore.
Home page the main page of a website and the first screen that a visitor sees displayed when connecting to that site; usually has links to other web pages.
Hosting costs (IT) monthly fees paid to an Internet Service Provider (ISP) for hosting a domain name.
Human resources refers to managing the people employed by a business. The field has moved from a traditionally administrative function to a strategic one that recognises the link between talented and engaged people and business success.
Import to bring goods or resources from another country into Australia for processing, use and/or sale.
Incentive money or benefits offered to encourage a particular activity or to reward a particular effort or outcome.
Income revenue that is earned by the business.
Income statement is a company's financial statement that indicates how the revenue is transformed into the net income of the business.
Income tax a tax applied to the annual income of individuals and businesses.
Indemnity insurance provides protection to your business where a piece of advice you have given causes financial or other losses to clients.
Induction training activities designed to provide new-starters with the information they need, as well as getting them up to speed on how the organisation works. For example conditions of service, physical layout of the workplace, safety rules, local conventions and customs and supervisory procedures.
Input taxed some supplies are input taxed, which means you do not charge GST for them nor are you entitled to claim input tax credits for costs relating to the supply.
Input tax credits or GST credit - you are entitled to claim an input tax credit for the GST portion of the price you pay for your business purchases.
Intangible assets those assets of a business, which cannot be assigned a tangible, fixed value, such as leases, franchises, goodwill and patent rights.
Intellectual property (IP) a thought process, or the product of a thought process, which an individual or business owns and uses in the course of business.
Interactive website a website that responds to viewer selections.
Interest the cost of borrowing money.
Internet the global network of computers, routers and cable connections that enables the world's computers to connect to each other.
Intranet restricted use of the internet, usually within one organisation. Passwords are used to prevent entry from outsiders. Used for company information and collaboration.
Inventory the value of all the stock of physical items that a business uses in its production process or has for sale in the ordinary course of doing business.
Investment money used to purchase any capital items for the business and expected to yield an income.
Investor an individual or organisation which contributes equity capital to a business venture.
Invoice a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer.
Invoice financing see 'Factoring'
IP address (IT) a unique name (or number) identifying a computer user of computer is called an address or an IP address. IP addresses are used in network communications in transmitting messages to a particular person or machine.
ISP (IT) an internet service provider is a company that provides an intermediate link between a computer or a network and the internet.
Just-in-time (JIT) is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs
Kaizen a Japanese word adopted into English referring to a philosophy or practices focusing on continuous improvement in manufacturing activities, all business activities, or even all aspects of life, depending on interpretation and usage.
Kanban a signalling system to trigger and action. The term is related to 'lean' and 'just-in-time'
LAN a local area network is a group of computers communicating over a short distance to one another. Many LANs have connections to larger networks (see 'WAN').
Lean a system to understand customer value and continually working to increase it with less resources.
Lean manufacturing / lean production a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination.
Lease a legal contract covering the possession and use of property, plant or equipment between the owner (lessor) and another person (lessee) at an agreed rent and for a stated period of time.
Leasing finance a method of acquiring business equipment without capital outlay. The bank or finance company buys the equipment and leases it to the customer, in return for regular rental payments for the duration of the lease period.
Legislation all current laws, as passed by the Parliament of a state, territory or the Federal Government.
Lessee a person who enters into a lease contract as the user of the land, buildings, plant or equipment.
Lessor an owner who allows his/her land, buildings, plant or equipment to be used under a lease contract.
Likelihood (AS/NZS 4360) (Risk Management) How likely an event is to occur, or the frequency with which an event may occur (Note: Likelihood can be expressed qualitatively or quantitatively.)
Limited partnership a legal partnership where some owners assume limited responsibility up to the amount invested.
Liquidate to settle a debt or to convert to cash. This literally means to do away with.
Liquidator a qualified person appointed by a court to wind up a company, realise and distribute its assets in payment of all or some of its liabilities.
Liquidity cash or assets that can readily be converted into cash.
Liquidity ratio the ratio of current assets divided by current liabilities.
Loan money loaned at an agreed rate of interest and for a fixed period.
Loss (AS/NZS 4360) (Risk Management) Any negative consequence or adverse effect, financial or otherwise.
Loss of profits insurance provides coverage for direct and indirect losses sustained to business property sustained as a result of suspending operations and to place the insured in the same position as it would have been in had no interruption in its business occurred.
Maintenance all actions necessary to retain an item or asset in optimal condition.
Management the role of leading and directing a business.
Margin the difference between the cost and the selling price of an item usually expressed as a percentage of the selling price. ( See 'Mark-up'.)
Market forces the influences at play in a market.
Marketing finding out what customers need and want and then creating, communicating, offering and exchanging offerings of value with others.
Marketing plan written document that details the necessary information and actions needed to obtain marketing objectives. Marketing strategy a business's overall approach and direction to marketing its products/services, which forms the basis for developing a marketing plan.
Market power a level of dominance or impact in a market that allows a business to influence the circumstances of that market.
Market segmentation the process of dividing potential customers into segments. Each segment consists of a group of consumers with similar requirements, which can be distinguished from the requirements of other consumers in the market. There will be distinct differences between the goods and services needed to meet the requirements of each segment.
Negative gearing is when an investment is purchased with the assistance of borrowed funds, and where borrowing costs exceed investment income the law allows a deduction of the borrowing costs, provided that the investments are genuine.
Net what is left after deducting all costs (see 'Gross').
Net profit the remainder after all expenses of an accounting period are deducted from all revenue of the same period.
Net worth the owner/s' interest in a business, calculated by subtracting all liabilities from the assets of the business.
Network (IT) a system of computers and/or peripheral devices, like printers and phone lines, with are connected to each other so that data can be shared and transferred electronically.
Networking the process of meeting people and making connections for the benefit of your business.
Niche a small, specialised segment of a total market.
Non-profit/not-for-profit organisation an organisation whose operations are aimed at filling a community, religious or social need or purpose. Any profits are required by law to be re-invested in the organisation, and it is not permitted to provide a return for its members/shareholders. There are rules about how to become a not-for-profit organisation.
Not negotiable words often written on crossed cheques, which do not prevent the cheque from being transferred. (See 'Account payee only'.)
Occupational health and safety (OH&S) is concerned with protecting the safety, health and welfare of people in the workshop.
Official receiver a person appointed to investigate and manage the affairs of a company in receivership.
OHS/OH&S See 'Occupational Health and Safety'
Operating expense all the expenses normally incurred in running a business, during an accounting period, excluding the cost of goods sold.
Option an agreement, often for a consideration, which permits the purchase or sale of something within a stipulated time, in accordance with the terms of the agreement. For example, a right by a tenant to take up a further lease of premises, usually under conditions outlined in the original lease.
Overdraft a form of loan by which a person with a trading bank current account is given permission to continue making drawings on the account up to an agreed limit, after the balance has been reduced to nil.
Overheads expenses which cannot be attributed to any specific business activity, but are necessary for the business to function. Examples are rent, heating and lighting.
Paid-up capital The total amount of shareholder capital that has been paid in full by shareholders.
Partnership a legal business relationship of two or more people who share responsibilities, resources, profits, and liabilities.
Patent A patent is a right granted for any device, substance, method or process which is new, inventive and useful. A patent is legally enforceable and gives the owner the exclusive right to commercially exploit the invention for the life of the patent.
Payable refers to a debt that is due to be paid.
Pay as you go (PAYG) a system for business and individuals to pay expected tax liabilities in installments. Depending on the circumstances, installments can be paid quarterly, bi-annually or annually.
Payee person to whom money is paid.
Personal assets all items that you personally own including the money in the bank, whatever is owed to you, securities/shares , property automobile, furniture, appliances and other miscellaneous items.
Personal development plan a plan to develop the skills and capabilities of an individual through training, coaching, mentoring, learning and other experiences. This is often developed alongside a progression plan.
Personnel persons collectively in the employ of a business.
Petty cash a small amount of money kept for minor purchases for the business.Posting making entries in an accounting system or book from original documents such as invoices and receipts.
Power of attorney power to act on behalf of another person for specified purposes.
Premium consideration paid for an insurance policy.
Principal in the case of a loan, refers to the actual amount borrowed and on which interest is paid.
Private (company) is owned by shareholders, and which is not publicly traded on the stock exchange. Private can also mean an entity which is a non-government organisation.
Probability (AS/NZS 4360) (Risk Management) a measure of the chance of occurrence expressed as a number between 0 and 1. The extent to which an event is likely to occur.
Productivity a measure of the activity of a business based on a comparison of input and output.
Profit total revenue less total expenses for a period of time calculated in accordance with generally accepted accounting principles.
Profit and loss statement statement of revenue and expenses showing the profit or loss for a certain period of time.
Profit margin the ration of net income to net sales expressed as a percentage..
Progression plan (staff) a program in a business providing a clear steps for employees who wish to progress to higher roles within the firm.
Pro-forma invoice a document giving all the details of a proposed transaction in advance.
Projection a forecast of future trends in the operation of a business.
Promotion marketing tactic which increases public or industry awareness of a business and its services or goods.
Proprietorship business owned and operated by a single person.
Proprietary company - a company that is registered as, or converts to, a proprietary company under the Corporations Act 2001 (Cth). A proprietary company must have no more than 50 non-employee shareholders.
Pro rata in proportion.
Public (company) a company can offer shares to the public and can be traded on a public exchange, such as the Australian Stock Exchange (ASX).
Quality assurance systematic process that is designed to ensure products/services are delivered to a quality standard. Also, certification that demonstrates compliance with established standards such as Australian (AS series) and/or international (ISO series).
Quality management - a management system which seeks to deliver total customer satisfaction through fulfilling the customer's quality requirements while continually achieving improvement in business performance.
Ratio the proportional relationship of one thing to another.
Receipt a written acknowledgement of having received payment and goods/services specified.
Receivership the legal condition a company is placed in when an official receiver is appointed to investigate and manage its affairs.
Remuneration payment or salary for work done or services rendered.
Residual the pre-agreed estimated value at the end of a leasing period of an item subject to a leasing agreement.
Residual risk (AS/NZS 4360) (Risk Management) the risk remaining after implementation of risk treatment.
Retail to sell directly to the consumer, usually in small quantities in comparison with the total level of sales.
Return on investment (ROI) the ratio of net profit after income tax, over owner's equity. Usually expressed as a percentage.
Revenue the total income earned by a business. Also referred to as sales or turnover.
Right of assignment in relation to business premises, a right given in the lease agreement for a tenant to assign the lease to another tenant when the business is sold.
Risk (AS/NZS 4360) (Risk Management) the chance of something happening that will have an impact on objectives.
Risk analysis (AS/NZS 4360) (Risk Management) a systematic process to understand the nature of risk and to deduce the level of risk.
Risk assessment (AS/NZS 4360) (Risk Management) the overall process of risk identification, risk analysis and risk evaluation.
Risk avoidance (AS/NZS 4360) (Risk Management) a decision not to become involved in, or to withdraw from, a risk situation.
Risk criteria (AS/NZS 4360) (Risk Management) terms of reference by which the significance of risk is assessed.
Risk evaluation (AS/NZS 4360) (Risk Management) the process of comparing the level of risk against risk criteria.
Risk identification (AS/NZS 4360) (Risk Management) the process of determining what, where, when, why and how something might happen.
Risk management (AS/NZS 4360) the culture, processes and structures that are directed towards realising potential opportunities whilst managing adverse effects.
Risk management process (AS/NZS 4360) the systematic application of management policies, procedures and practices to the tasks of communication, establishing the context, identifying, analysing, evaluating, treating, monitoring and reviewing risk.
Risk reduction (AS/NZS 4360) (Risk Management) actions taken to lessen the likelihood, negative consequences, or both, associated with a risk.
Risk sharing (AS/NZS 4360) (Risk Management) sharing with another party the burden of loss or benefit of gain from a particular risk.
Risk treatment (AS/NZS 4360) (Risk Management) the process of selection and implementation of measures to modify risk.
Safety See "Occupational Health and Safety '.
Sales the total value of goods sold or revenue from services rendered.
Scanner (IT) a machine fitted with a photoelectric cell that "reads" a picture, bar code or text in order to convert it into an image (or text file) that can be digitally displayed and manipulated on a computer screen.
Scope/scoping the defined set of activities that will be undertaken in a project.
Search engine (IT) a computer software program that enables a user to find items on a database or websites using key words as the search criteria.
Secured protected or guaranteed as in the case of a loan where the lender holds the title of some asset until the borrower has repaid the loan in full.
Self-destructing email an email message that automatically disappears from the computer's memory after it has been opened and/or its attachment has been printed out once.
Self-publishing the preparation and publication in-house of a magazine, book or other printed text by its author.
Service business a business that deals in service activities such as a retailer, tourism business, banking, education provider and the like.
Shareholder an individual or organisation which owns a share or shares in a company.
Shareware computer software that is made available free on trial, with an optional fee payable after the trial period.
Site design (IT) the division and linkage of information between web pages on a web site. Also, the art direction of a web site.
Six Sigma - seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and variability in manufacturing and business processes.
Social media uses social influences, social media platforms and on-line communities for marketing purposes.
Skill set the range and level of skills that a person possesses, or the set of skills required to perform a particular task or role.
Smart card a small, plastic card of a similar size to a credit card which stores information on an embedded microcomputer chip. Used to store cash, values, identification details or other information.
Sole trader a person who trades by himself/herself without the use of a company structure or partners, and bears alone full responsibility for the actions of the business.
Solicitor a qualified professional who specialises in providing legal advice to clients.
Solvent the condition of a business when all debts can be paid as they come due.
Stakeholders (AS/NZS 4360) (Risk Management) those people and organisations who may affect, be affected by, or perceive themselves to be affected by, a decision, activity or risk.
Stock physical items (inventory) that a business uses in its production process or has for sale in the ordinary course of business.
Stock control the method of determining how much stock should be held and how much needs to be reordered and when, with the aim of controlling stock holding costs while maintaining efficient operation of the business.
Stock turn rate ratio that compares average inventory to sales. . This indicates how many times, on average, the entire inventory (stock) was sold and replaced over a specified period of time.
Stock At Valuation (SAV) stock valued at wholesale or cost price.
(Business) strategy a document designed to set the direction of the business. It may include statements of the vision, values, mission and objectives of the business, as well as the key tasks that need to be carried out to deliver the strategy
Sub-domain (IT) subsidiary website linked to and dependent upon the primary domain website.
Succession the process of transitioning management and/or ownership of a business on to a successor.
Supplies in relation to the GST, supplies include the goods and services you sell through your enterprise and many other transactions such as providing advice or information, leasing out commercial premises or providing hire equipment.
Supply A supply for GST purposes is very broadly defined and includes the sale of goods (for example, trading stock and capital equipment), the supply of services (for example, repair services), the hiring out of equipment, the giving of advice (for example, legal advice), and the supply of other things such as rights (for example, an option).
Sustaining asset an asset intended to replace or maintain the existing capacity and capability of a business to allow it to continue with ongoing operations.
Tangible asset something substantial or real that is capable of being given an actual or approximate value.
Tax invoice a document generally issued by the supplier. It shows the price of a supply, indicating whether it includes GST, and may show the amount of GST. It must show other information, including the ABN of the supplier. You must have a tax invoice before you can claim an input tax credit on your activity statement (except for purchases of $50 or less).
Tender an offer in writing to carry out work, which has been specified by another person. The offer quotes a fixed price, which will be charged for doing the work.
Term loan a loan for a fixed period of more than one year and repayable by regular instalments.
Trade credit an arrangement to buy goods or services on account, that is, without making immediate cash payment.
Trade discount an allowance made by a seller to a buyer at the time of purchase, for the deduction of a percentage of the price, provided the payment is made within agreed terms.
Trade mark can be a letter, number, word, phrase, sound, smell, shape, logo, picture, aspect of packaging or any combination of these, which is used to distinguish goods and / or services of one trader from those of another
Training module stand-alone section of a software program written to teach users about the program's features and capabilities.
Trial balance a list of all balances in the ledger at a given time.
Undercapitalisation insufficient investment of funds in a business to support its activities and enable expansion.
Undercutting setting prices lower than those of a competitor, usually with the intention of retaining or increasing market share.
Unsecured loan a loan that is not backed up by any collateral, such as a home or an automobile offered as security.
URL (IT) the Uniform Resource Locator is the address of a website on the internet.
Valuation the process of appraising the worth of property according to some recognised criteria.
Variable costs the costs that can vary depending on the level of demand and activity.
Vendor a seller of goods, services or of a business.
Venture capital type of private equity provided to early-stage, high-potential and high-risk businesses.
Volume an amount or quantity of business activity.
WAN a wide area network is a group of computers not limited to systems in close proximity. A WAN often links a number of LANs together.
Walk in, walk out (WIWO) is an expression normally used in its abbreviated form, regarding a business for sale. It indicates that the business is for sale as a going concern and may be purchased without interruption to trading.
Web-based project management (IT) an internet-based management tool that enables document/data management and specific information exchange throughout the project team.
Wholesale selling in large quantities to businesses that will then resell to consumers in smaller quantities.
Workers' compensation money paid to an employee to compensate for injuries received in connection with their work. All employers must insure against claims for this kind of compensation.
Working capital the excess of current assets over current liabilities of any business at any time