| B2b | Business to business. |
| B2c | Business to consumer. |
| Back end | As in the phrase “back end analysis” refers to the results of actions with people who have responded to your initial offer. |
| Bad debt (or written-off debt) | Bad debt is money that a business is owed by a customer, but which the customer is unable to pay. |
| Balance of payments (bp) | This records the sources and uses of foreign exchange. This account records all payment transactions between the home country and the rest of the world, and is divided into two parts: the current account and the capital and financial account. Also known as: balance of payments account. |
| Balance sheet | One of the main financial statements. The balance sheet reports the assets, liabilities, and owner’s (stockholders’) equity at a specific point in time, such as December 31. The balance sheet is also referred to as the Statement of Financial Position. |
| Bank | A firm that creates money in the form of bank deposits in the process of supplying credit. |
| Bank bailout | The government buys an equity stake in a bank or some other intervention to prevent it from failing. |
| Bank balance | The amount in a bank account according to the bank’s records. |
| Bank money | Money in the form of bank deposits created by commercial banks when they extend credit to firms and households. |
| Bank overdraft | A negative balance in the bank’s records for the company’s checking account. |
| Bank run | A situation in which depositors withdraw funds from a bank because they fear that it may go bankrupt and not honour its liabilities (that is, not repay the funds owed to depositors). |
| Bank statement reconciliation | The process of comparing the amounts in the Cash account in the general ledger to the amounts appearing on the bank statement. The objective is to be certain that there is consistency between the amounts and that the company’s amounts are accurate and complete. |
| Bankruptcy | The inability to pay off debts with existing assets. |
| Bargaining gap | The difference between the real wage that firms wish to offer in order to provide workers with incentives to work, and the real wage that allows firms the markup that maximizes profits given the degree of competition. |
| Bargaining power | The extent of a person’s advantage in securing a larger share of the economic rents made possible by an interaction. |
| Barrier to entry | Something that prevents new competition in a marketplace. Examples include: high fixed cost investments, red tape and switching costs. |
| Barrier to exit | Something that prevents a producer from exiting a marketplace. |
| Base money | Cash held by households, firms, and banks, and the balances held by commercial banks in their accounts at the central bank, known as reserves. Also known as: high-powered money. |
| Base rate | Set each month by the Bank of England, this is the country’s base rate of interest. This influences financial products and services when they set their own cost of borrowing. |
| Basic accounting equation | Assets = Liabilities + Owner’s Equity. For a corporation the equation is Assets = Liabilities + Stockholders’ Equity. For a nonprofit organization the accounting equation is Assets = Liabilities + Net Assets. Because of double-entry accounting this equation should be in balance at all times. The accounting equation is expressed in the financial statement known as the balance sheet. |
| Batch mode | If you have received 10,000 replies to a mailing, you can update your master file with these replies in one batch. This is the fastest and cheapest way to update records. The opposite is On-Line updating. |
| BATNA | Acronym for ‘best alternative to negotiated agreement.’ It is the next most desirable choice a potential customer has with respect to your offering. The more alluring the BATNA, the lower your pricing power becomes. Note that ‘doing nothing’ can be a BATNA. |
| Baud rate | A measure of line transmission speed. 28.8 thousand Baud is a good speed for terminals and PC’s connected to a marketing database. Speeds can go up to 56,000 or more. |
| Bear | An investor who believes that securities are set to decrease in price. |
| Begging | A request for payment, generally from a person with minimal pricing power and dubious value offered in return. |
| Bellwether | A leading indicator that suggests a change in a marketplace. |
| Benchmarking | Checking your company’s standards by comparing them with certain criteria, e.g. a competitor’s activities. |
| Best response | In game theory, the strategy that will give a player the highest payoff, given the strategies that the other players select. |
| Beta | A measure of a particular investment’s volatility compared to the overall market. A beta greater than one is more volatile, a beta less than one is less volatile. |
| Beveridge curve | The inverse relationship between the unemployment rate and the job vacancy rate (each expressed as a fraction of the labour force). Named after the British economist of the same name. |
| Bid-offer spread | The buying (offer) and selling (bid) price of shares, bonds or currency. The ‘spread’ is the difference between those two prices. |
| Big Mac Index | A report produced by The Economist that shows the relative cost of a McDonald’s hamburger in different countries. It was intended as a measure of purchasing power parity. |
| Bill of materials | A listing of the materials included in a product. A bill of material could be thought of as a bakery’s recipe for producing one of its products. |
| Bill payable | An amount owed on bill or invoice from a vendor or supplier of goods or services. |
| Billing software | Billing software is software which helps enable the payment process for businesses, through features like the electronic generation and sending of quotes and invoices. Billing software is also commonly referred to as invoicing software, and the functionality it provides is often contained within accounting software. |
| Biodiversity loss (rate of) | Proportion of species that become extinct every year. |
| Biological survival constraint | This shows all the points that are ‘biologically feasible’. See also: biologically feasibile. |
| Biologically feasible | An allocation that is capable of sustaining the survival of those involved is biologically feasible. |
| Bitcoin | A cryptocurrency released by Satoshi Nakamoto in 2009. |
| Bits | If a byte is like an atom in computer language, a bit is like an electron. A bit is either on or off. It is either a 1 or a zero. Eight bits make up one byte. |
| Black market | The sale of goods and services in an unsanctioned manner. Note: Though the sale is illegal, this does not imply that the items for sale are illegal. Many items are sold on the black market to avoid government taxation. |
| Black swan | Financial events that are difficult to predict. It is called this because before people ventured to Australia, swans were assumed to only be white. No one had seen a black one until then. |
| Block | The smallest reported unit in the 1990 U.S. Census. About 14 households in a block. |
| Block group | The smallest reported unit in the 1980 U. S. Census. About 340 households on average. |
| Blue chip | This term originates from poker as blue chips are traditionally the highest-valued. Therefore, a blue-chip company is one that is large and considered to be safe or prestigious. |
| Blue ocean strategy | A theory and book developed by W. Chan Kim and Renée Mauborgne. The authors suggest that moving into markets without competition (blue oceans) can be far more advantageous than entering proven, but competitive, markets (red oceans). |
| Blue sky laws | Laws governing the sales of securities. |
| Bond | An agreement made when money is borrowed from an investor at a set rate of interest. It is repaid over a set period of time. Bonds are rated from the safest (AAA) to the riskiest (D), also known as ‘junk bonds’. |
| Bonds payable * | Generally a long term liability account containing the face amount, par amount, or maturity amount of the bonds issued by a company that are outstanding as of the balance sheet date. |
| Book balance | Book balance is a company’s cash balance according to its accounting records. Book balance can include transactions that have yet to settle or clear through the bank account. At the end of an accounting period, a company’s book balance is reconciled with the bank balance via the monthly bank statement. |
| Book depreciation | The depreciation computed for financial reporting purposes—as opposed to income tax depreciation. |
| Bookkeeper | A bookkeeper sets up the foundation for accountants, tracking finances by recording transactions. This gives a holistic view of your business so you can easily see the amount of money coming into and leaving your business. |
| Bootstrapping | (1) Building a start-up company with very little money, often relying on personal savings and pushing for the lowest possible operating costs, while implementing cost-saving systems such as fast inventory turnaround. (2) Making a forecast beyond a certain period by using the forecasted data for that period. |
| Bottom line | The bottom line is the net income for a business. The term comes from the layout of an income statement – the bottom line on these statements is where the net income is calculated. |
| Bounce back | The practice of sending another identical (or similar) catalog back to someone who has just ordered something from one of your catalogs. |
| Brand Managers | Most packaged goods companies organize themselves by brand. The brand manager is responsible for advertising, marketing and sales of the product. The brand manager is typically the main obstacle to database marketing which is customer focussed rather than product focussed. |
| BRC or BRE | Business Reply Card or Business Reply Envelope |
| Break-even point | The point in time when you will have paid back all your debts, or when revenues exactly match expenses. |
| Breakeven | The point at which aggregate costs are equal to aggregate revenue. A firm that has reached a breakeven status may find itself with a much improved strategic position, such as one that has sold enough widgets to cover the cost of the factory that produced them. |
| Bretton woods system | An international monetary system of fixed but adjustable exchange rates, established at the end of the Second World War. It replaced the gold standard that was abandoned during the Great Depression. |
| Bridging loan | This loan is taken out by people who need access to finance while their property is being sold. |
| Broad money | The stock of money in circulation, which is defined as the sum of bank money and the base money that is in the hands of the non-bank public. See also: bank money. |
| Brokerage Commission | The commission (usually 20%) paid by a list owner to a broker to handle the rental of a list. |
| Brown good | Consumer electronics. These goods are named for the wood paneling that was commonly used on such devices. |
| Bubble | The inflation of a good’s selling price above the intrinsic value. Two famous examples are the Dutch tulip mania of the 1600s and the American dot com bubble around 2000. |
| Budget constraint | An equation that represents all combinations of goods and services that one could acquire that exactly exhaust one’s budgetary resources. |
| Bugs | Errors that crop up in software. Caused by inability of programmers to predict all possible ways that the code in their programs will be used to process data. |
| Bull | An investor who believes that securities are set to increase in price. |
| Bull trap | Evidence that is sufficient to convince investors (bulls) that a given security will increase in price, when, in actuality, the security’s price is set to decrease. |
| Bundle pricing | The selling of multiple products as a single collection for a single price (usually at a price below the sum of costs for each item). |
| Burn rate | This is the rate that a company is losing money, figuratively describing cash as being ‘burned.’ Typically, the burn rate is expressed as a monthly figure, and it can be synonymous with negative cash flow |
| Business agility | Business agility refers to the ability for a business to make decisions and act on them quickly. Where these actions require money to undertake, poor cash flow can prevent a business from being agile, potentially leaving it less able to take advantage of opportunities and avoid risks. |
| Business angel | Also known as an angel investor. An individual who provides capital for a business start-up in return for a stake in the company. |
| Business cycle | The tendency for economies to experience peaks and troughs that follows a cyclical pattern – known colloquially as ‘boom and bust’. Governments are tasked with smoothing the peaks and troughs and limiting the effect of these cycles on consumers and businesses. |
| Business debt coverage | This ratio measures your company’s ability to repay business debt, providing a snapshot of the overall financial health of your business. To calculate, divide your annual business cash flow by the annual business loan payments, including the anticipated payments you would make on the loan you’ve applied for. Learn more here: What is business debt coverage. |
| Business debt usage | Also referred to as the debt-to-equity ratio, business debt usage compares your total outstanding business debt to annual business revenue or total business assets. |
| Business entity | A business entity is an organization that one or more people form to conduct business activities. How a business entity is organized and operates is crucial because it will determine how it is taxed and who will be liable for paying its debts and obligations. |
| Business license | A government-issued permit to transact business. |
| Business lines of credit | Business lines of credit are very similar to credit cards and can be used to purchase inventory or equipment, invest in marketing, or manage fluctuations from seasonal sales. They have a maximum limit you can borrow and repay.You’ll be charged interest for the amount of money you draw, not on the maximum limit |
| Business plan | A business plan is a document that outlines a business’s long-term goals. This might include purchasing a new building in the next 10 years, or hiring 50 more employees within the next fives years. |
| Business revenue trends | Simply put, the business revenue trend is a percentage that reflects the revenue growth of your business over time. It illustrates how your sales have increased (or decreased) over your years in business. For more information, visit the SmartBiz Blog: Is your business growing? |
| Business structure | Form a business takes, with characteristics addressing legal liability and tax considerations. These forms include sole proprietorship, partnership, corporation, and LLC. |
| Business writing | Business writing is a type of writing that is used in a professional setting. It is a purposeful piece of writing that conveys relevant information to the reader in a clear, concise, and effective manner. It includes client proposals, reports, memos, emails, and notices. Proficiency in business writing is a critical aspect of effective communication in the workplace. |
| Buyer’s premium | Additional costs (over and above the winning bid) that must be paid by the winner of the auction. This money is accrued by the auction house and not by the owner of the item being auctioned. |
| Byproduct | A product that emerges with other products in a common process; however, this product does not have a significant value. (If it had significant value, it would be a joint product.) |
