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| Abandonment | As in the phrase “call abandonment”. This refers to people who, being placed on hold in an incoming call, elect to hang up (“abandon”) the call. Call centers monitor closely the “abandonment rate” as a measure of their inefficiency. |
| Abatement | Practices to limit or reverse environmental damages. See also: abatement policy. |
| Abatement policy | A policy designed to reduce environmental damages. See also: abatement. |
| Absolute advantage | A person or country has this in the production of a good if the inputs it uses to produce this good are less than in some other person or country. See also: comparative advantage. |
| Abundance mindset | A belief centered on the idea that opportunities are boundless. Individuals with such beliefs tend to engage in higher levels of risk-taking. |
| Accountability | The obligation of a decision-maker (or body) to be responsive to the needs and wishes of people affected by his, her or decisions. |
| Accounting cycle | A term that describes the steps when processing transactions (analyzing, journalizing, posting, preparing trial balances, adjusting, preparing financial statements) in a manual accounting system. Today many of the steps occur simultaneously when using accounting software. |
| Accounting period | The time for which profits are being calculated, normally months, quarters or years. |
| Accounts | Businesses are obligated to produce an annual set of accounts. If they are listed on the stock exchange, they must also show half-year profits (information regarding profits six months into the financial year). |
| Accounts payable (ap or a/p) | Accounts payable refers to an account within the general ledger that represents a company’s obligation to pay off a short-term debt to its creditors or suppliers. Business owners may choose to pay its outstanding bills as close to their due dates as possible in order to improve cash flow. |
| Accounts receivable (ar or a/r) | Accounts receivables is another business finance term that means the money owed to your small business by others for goods or services rendered. These accounts are labeled as assets because they represent a legal obligation for the customer to pay you cash for their short-term debt. |
| ACD | Automatic Call Distributor. A complex machine used in modern call centers for incoming calls. It routes calls to available agents, holds overflow calls, gives and takes messages, provides reports. A must for modern database marketing. |
| Acquisition | The purchase of one company or resources by another. |
| Active listening | Active listening requires you to listen attentively to a speaker, understand what they’re saying, respond and reflect on what’s being said, and retain the information for later. This keeps both listener and speaker actively engaged in the conversation. |
| Actuary | An actuary is a person employed by pension providers and insurance companies. Their role is to calculate accident rates, life expectancy and the relevant payouts. |
| Acyclical | No tendency to move either in the same or opposite direction to aggregate output and employment over the business cycle. |
| Ad-hoc report | A reporting method which permits you to ask questions like: How may women over 60 have bought more than $200 from us in the last 4 months? |
| Adaptability | Adaptability in the workplace means being flexible and able to change in order to become successful |
| Address | A computer term for the location on a disk or in memory of a piece of information. Addresses help the computer to find things rapidly, and to store them for later retrieval. |
| Adjustment gap | The lag between some outside change in labour market conditions and the movement of the economy to the neighbourhood of the new equilibrium. |
| Administration | There are two meanings relating to this word in business. (1) The organisation and running of a business. (2) A business going into administration, meaning that a business has gone bankrupt and its creditors can get in touch to try and claim any money they are owed. |
| Administrative expenses | Administrative expenses are part of the operating expenses (along with selling expenses). Administrative expenses include expenses associated with the general administration of the business. Examples include the salaries and fringe benefits of the company president, human resource personnel, accounting, information technology, the depreciation expense for equipment and space used in administration, as well as supplies, utilities, etc.Under the accrual basis of accounting, administrative expenses appear on the income statement for the period in which they occurred (not the period in which they were paid). |
| Administratively feasible | Policies for which the government has sufficient information and staff for implementation. |
| Adverse selection | The problem faced by parties to an exchange in which the terms offered by one party will cause some exchange partners to drop out. An example is the problem of asymmetric information in insurance: if the price is sufficiently high, the only people who will seek to purchase medical insurance are people who know they are ill (but the insurer does not). This will lead to further price increases to cover costs. Also referred to as the ‘hidden attributes’ problem (the state of already being ill is the hidden attribute), to distinguish it from the ‘hidden actions’ problem of moral hazard. See also: incomplete contract, moral hazard, asymmetric information. |
| Advertising expense | Advertising Expense is the income statement account which reports the dollar amount of ads run during the period shown in the income statement. Advertising Expense will be reported under selling expenses on the income statement. |
| Affiliate marketing | A retailer or service provider advertising its goods or services via a third party in return for a commission on any sales. |
| Affinity | People who are similar in lifestyle |
| Affinity Analysis | A process of finding relationships between customer purchases. People who buy skis buy snow tires. |
| Affinity Matrix | A cross tab showing cross buying patterns by customers who did or did not buy Products A, B, C, and D. |
| Affluents | Households with 30% or more than the cost of living plus taxes. |
| Agent | The word for a telephone operator in a modern inbound call center in a company that takes a lot of customer service and sales calls. |
| Aggregate demand | The total of the components of spending in the economy, added to get GDP: Y = C + I + G + X – M. It is the total amount of demand for (or expenditure on) goods and services produced in the economy. See also: consumption, investment, government spending, exports, imports. |
| Aggregate output | The total output in an economy, across all sectors and regions. |
| All things being equal | A frequent caveat employed by economists. It is used to indicate that any changes made to a system should not be assumed to have secondary effects. |
| Allocation | A description of who does what, the consequences of their actions, and who gets what as a result. |
| Alpha | The percentage by which a particular stock outperformed the overall market. An alpha of 10 means that the stock grew 10% faster than the market. |
| Altruism | The willingness to bear a cost in order to benefit somebody else. |
| Ambition | Having ambition at work means having the desire to improve in the workplace. This may mean not conforming to the way things have always been done. Ambitious people orient their efforts on goals and ways to achieve them, regardless of what others do. |
| Analog | Regular telephone service comes over analog lines. Modern improved service (often used for data lines) comes over DIGITAL lines in which all the sounds are converted to 1’s and 0’s. For database marketing computer communications, digital is better. |
| Analytical skills | Analytical skills are a wide-ranging set of professional qualities that include the ability to think critically, analyze data, make difficult decisions, and solve complex problems. These important skill sets all involve taking in new information and mentally processing it in a productive manner. |
| Anchor | Information that leads market participants to decrease or increase their estimates of a good’s value. |
| ANI | Automatic Number Identification. A system whereby you can learn the number of a person who is calling you on the telephone. Can be linked to a database to find the person’s name and address. |
| Annual equivalent rate (aer) | A quote of what interest paid on savings and investments would be. It is calculated by adding each interest payment to the original deposit, then working out the next interest payment, compounding the interest. |
| Annual recurring revenue | The amount of income that a given account delivers to a vendor over the course of a year. |
| Annual report | Annual report that an LLC must file with the secretary of state. |
| Annuity | This is a type of insurance policy. Upon retirement a lump sum is paid into it and the insurance company then provide a regular income. |
| Antitrust policy | Government policy and laws to limit monopoly power and prevent cartels. Also known as: competition policy. |
| Appended | Data process whereby a customer file has data appended to it (such as age, income, home value) from some external data file. See overlay. |
| Appraisal | An estimation of an item’s value, usually provided by a particularly knowledgeable party. |
| APR | Short for annual percentage rate, this is the interest charged on your loan every year, plus all fees and costs associated with the loan. Keep in mind that advertised interest rates may just be where interest rates start; you’ll need to submit information for a rate check to find out what you should expect for your small-business loan’s APR. |
| Arbitrage | The process by which a person or business takes advantage of the difference in price of a share or a currency. |
| Articles of dissolution | Document that formalizes the end of a corporation’s existence |
| Articles of organization | The Articles of Organization are the documents filed with the state to formally create an LLC. In some states, the articles are called a “certificate of organization.” The Articles of Organization are similar to the Articles of Incorporation for a corporation. |
| Artificially scarce good | A public good that it is possible to exclude some people from enjoying. Also known as: club good. |
| ASCII | American Standard format for data storage on magnetic media (tape or disk). |
| Asset | In business, assets are anything with value, tangible or intangible, owned by the company. Business assets can be cash, are cash on hand, accounts receivable, commercial property, equipment, inventory, and anything else that can be sold for cash. |
| Asset price bubble | Sustained and significant rise in the price of an asset fuelled by expectations of future price increases. |
| Assignment | The transfer of legal rights to another person or entity. |
| Asymmetric information | Information that is relevant to the parties in an economic interaction, but is known by some but not by others. See also: adverse selection, moral hazard. |
| Attrition | Model A model that predicts which customers are most likely to leave. Usually expressed as a percentage of likelihood. |
| Attrition Rate | The opposite of retention rate. The percentage of customers this year who are no longer buying next year. |
| Audit | An official inspection of a company’s, or individual’s, accounts. |
| Austerity | A policy where a government tries to improve its budgetary position in a recession by increasing its saving. See also: paradox of thrift. |
| Automated card payments | Automated card payments are a method of making recurring payments for a product or service (for example, your Netflix subscription). To facilitate this, the customer will provide their credit or debit card details to the business, who will securely store those details, and authorise them to take recurring payments from that card automatically. |
| Automatic stabilizers | Characteristics of the tax and transfer system in an economy that have the effect of offsetting an expansion or contraction of the economy. An example is the unemployment benefits system. |
| Automation | The use of machines that are substitutes for labour. |
| Autonomous consumption | Consumption that is independent of current income. |
| Autonomous demand | Components of aggregate demand that are independent of current income. |
| Autosexing | A computer process for finding the sex and appending titles (Mr. Ms.) to a file of names. |
| Average cost | The total cost of the firms’s output divided by the total number of units of output. |
| Average margin per user | Revenue divided by cost per sale. Commonly used by cellphone companies. |
| Average product | Total output divided by a particular input, for example per worker (divided by the number of workers) or per worker per hour (total output divided by the total number of hours of labour put in). |
| Average selling price | The mean cost at which an item was purchased by buyers. |
