Absenteeism is the term generally used to refer to unscheduled employee absences from the workplace. Many causes of absenteeism are legitimate—personal illness or family issues, for example—but absenteeism also can often be traced to other factors such as a poor work environment or workers who are not committed to their jobs.

Accelerated Cost Recovery System (ACRS)

The Accelerated Cost Recovery System (ACRS) is a method of depreciating property for tax purposes that allows individuals and businesses to write off capitalized assets in an accelerated manner. Adopted by the U.S.


Accounting has been defined as "the language of business" because it is the basic tool for recording, reporting, and evaluating economic events and transactions that affect business enterprises. Accounting processes document all aspects of a business's financial performance, from payroll costs, capital expenditures, and other obligations to sales revenue and owners' equity.

Accounting Methods

Accounting methods refer to the basic rules and guidelines under which businesses keep their financial records and prepare their financial reports. There are two main accounting methods used for record-keeping: the cash basis and the accrual basis.

Accounts Payable

Accounts payable is the term used to describe the amounts owed by a company to its creditors. It is, along with accounts receivable, a major component of a business's cash flow.

Accounts Receivable

Accounts receivable describes the amount of cash, goods, or services owed to a business by a client or customer. The manner in which the collection of outstanding bills are handled, especially in a small business, can be a pivotal factor in determining a company's profitability.

Activity-Based Costing

Activity-based costing (ABC) is an accounting method that allows businesses to gather data about their operating costs. Costs are assigned to specific activities—such as planning, engineering, or manufacturing—and then the activities are associated with different products or services.

Advertising Agencies

Advertising agencies are full-service businesses which can manage every aspect of an advertising campaign. They vary widely in terms of size and scope and cater to different kinds of businesses.

Advertising Budget

The advertising budget of a business typically grows out of the marketing goals and objectives of the company, although fiscal realities can play a large part as well, especially for new and/or small business enterprises. As William Cohen stated in The Entrepreneur and Small Business Problem Solver, "In some cases your budget will be established before goals and objectives due to your limited resources.

Advertising, Evaluation of Results

Once the small business owner has successfully designed and placed an ad (or had that ad successfully designed and placed by an agency), he or she will be eagerly awaiting the increased sales that advertising promises. While advertising can be an effective means of increasing profitability, measurable increases in sales may not be immediately forthcoming.

Advertising Media—Audio

The most common audio advertising media is FM radio. Placement of an advertisement on FM radio costs about as much as an advertisement placed in a metropolitan newspaper.

Advertising Media—Infomercials

Even though they are often considered annoying, infomercials have gained an undeniable reputation for effectiveness that has endeared them to American companies. Infomercials are a type of direct marketing (reaching out directly to the individual consumer).

Advertising Media—Internet

The invention of the World Wide Web made the Internet a viable advertising vehicle. It is an "open system," and therefore potentially available for anyone to use, which gives the Web tremendous reach.

Advertising Media—Print

The two most common print media are newspapers and magazines, but print media also include outdoor billboards, transit posters, the yellow pages, and direct mail. Print media is important because it can reach such a large audience, and the great number of specialized publications enable businesses to focus in on a target audience with a specific set of characteristics.

Advertising Media—Video

Video advertising can be an effective avenue of reaching an audience, in large measure because of the proliferation of televisions, cable channels, and VCRs in American homes over the past few decades. Video advertising also has the advantage of being free of the presentation limitations associated with other advertising media.

Advertising Strategy

An advertising strategy is a campaign developed to communicate ideas about products and services to potential consumers in the hopes of convincing them to buy those products and services. This strategy, when built in a rational and intelligent manner, will reflect other business considerations (overall budget, brand recognition efforts) and objectives (public image enhancement, market share growth) as well.

Affirmative Action

Affirmative action refers to concrete steps that are taken not only to eliminate discrimination—whether in employment, education, or contracting—but also to attempt to redress the effects of past discrimination. The underlying motive for affirmative action is the Constitutional principle of equal opportunity, which holds that all persons have the right to equal access to self-development.

Age Discrimination

Age discrimination is the practice of letting a person's age unfairly become a factor when deciding who receives a new job, promotion, or other job benefit. It most commonly affects older workers who feel they have been discriminated against in favor of younger workers, but there have been cases involving younger workers being displaced by older workers.

Age Discrimination in Employment Act

The Age Discrimination in Employment Act (ADEA) prohibits any employer from refusing to hire, discharge, or otherwise discriminate against any individual because of age. The act covers compensation, terms, conditions and other privileges of employment including health care benefits.

Aids in the Workplace

Acquired immune deficiency syndrome (AIDS) is a disease that impairs the human immune system and renders it susceptible to infections that would be repelled by a functioning immune system. The terminal stage of the human immuno-deficiency virus (HIV), AIDS is transmitted by contamination of the bloodstream with HIV-infected body fluids, specifically blood, semen, breast milk, and vaginal fluid.

Alien Employees

Alien employees are workers who take positions in American businesses but who are not citizens of the United States. Those employees who enter the country and secure employment legally do so by securing employment visas.

Alternative Dispute Resolution (ADR)

Alternative dispute resolution (ADR) is a term that refers to several different (but philosophically linked) methods of resolving business-related disputes outside traditional legal and administrative forums. These methodologies, which include various types of arbitration and mediation, have surged in popularity in recent years because companies and courts became extremely frustrated over the expense, time, and emotional toll involved in resolving disputes through the usual avenues of litigation.

Americans with Disabilities Act (ADA)

The Americans with Disabilities Act (ADA) is a revolutionary piece of legislation designed to protect the civil rights of people who have physical and mental disabilities, in a manner similar to that in which previous civil rights laws have protected people of various races, religions, and ethnic backgrounds. The ADA mandates changes in the way that both private businesses and the government conduct business to ensure that all Americans have full access to and can fully participate in every aspect of society.


Amortization, an accounting concept similar to depreciation, is the gradual reduction of the value of an asset or liability by some periodic amount (i.e., via installment payments). In the case of an asset, it involves expensing the item over the "life" of the item—the time period over which it can be used.

"Angel" Investors

According to Nation's Business's David R. Evanson, wealthy private investors provide American small businesses with $10 to $20 billion annually, which "dwarfs the investment made by traditional venture capital partnerships and offers a viable source of financing for capital hungry entrepreneurs." These individuals want to invest in up-and-coming new companies not only to earn money, Evanson suggested, but also to provide a resource that would have been helpful to them in the early stages of their own businesses.

Annual Percentage Rate (APR)

The annual percentage rate (APR) is the effective rate of interest that is charged on an installment loan, such as those provided by banks, retail stores, and other lenders. Since the enactment of the Truth in Lending Act in 1969, lenders have been required to report the APR in boldface type on the first page of all loan contracts.

Annual Reports

Annual reports are formal financial statements that are published yearly and sent to company stockholders and various other interested parties. The reports assess the year's operations and discuss the companies' view of the upcoming year and the companies' place and prospects in their industries.


An annuity is an interest-bearing financial contract that combines the tax-deferred savings and investment properties of retirement accounts with the guaranteed-income aspects of insurance. "Annuities are sometimes described as the flip side of life insurance," stated Stephen Blakely in Nation's Business.

Application Service Providers

According to the Information Technology Association of America, an application service provider (ASP) is "a company that provides a collection of IT resources to clients or subscribers who access those resources via the Internet or other networking arrangements." With the many challenges that businesses face every day, the last thing they need to worry about are a lot technological issues that are beyond their area of expertise. Many businesses that run their own applications are forced to increase their staffs to include information technology experts who maintain and upgrade application software.

Apprenticeship Programs

Apprenticeship programs are occupational training programs that combine on-the-job work experience with technical or classroom study. Such programs are designed to develop useful job skills in individuals entering the work force.

Articles of Incorporation

For small businesses that decide to incorporate, one of the first steps they must take is filing the articles of incorporation (sometimes called certificates of incorporation, articles of association, or charters) at a Secretary of State's Office or with the Department of Commerce. A company can file in the state in which it does business or in any other state of its choosing.

Assembly Line Methods

An assembly line is a production arrangement of workers and equipment in which the product that is being assembled passes consecutively from operation to operation, with each station adding to the work of previous stations, until the product is completed. Assembly line methods were originally introduced to increase factory productivity and efficiency by reducing the cost and manufacturing time required to produce a finished product.


Assets are anything of value that is owned by a company, whether fully paid for or not. These range from cash, inventory, and other "current assets" to real estate, equipment, and other "fixed assets." Intangible items of value to a company, such as exclusive use contracts, copyrights, and patents, are also regarded as assets.


An assumption is a statement that is presumed to be true without concrete evidence to support it. In the business world, assumptions are used in a wide variety of situations to enable companies to plan and make decisions in the face of uncertainty.

Audits, External

An audit is a systematic process of objectively obtaining and evaluating the accounts or financial records of a governmental, business, or other entity. Whereas some businesses rely on audits conducted by employees—these are called internal audits—others utilize external or independent auditors to handle this task (some businesses rely on both types of audits in some combination).

Audits, Internal

Internal auditing is an independent appraisal function that is performed in a wide variety of companies, institutions, and governments. What distinguishes internal auditors from governmental auditors and public accountants is the fact that they are employees of the same organizations they audit.

Automated Guided Vehicle (AGV)

The term "automated guided vehicle" (AGV) is a general one that encompasses all transport systems capable of functioning without driver operation. The term "driverless" is often used in the context of automated guided vehicles to describe industrial trucks, used primarily in manufacturing and distribution settings, that would conventionally have been driver-operated.

Automated Storage and Retrieval Systems (AS/RS)

Automated storage and retrieval systems (AS/RS) are inventory management systems that are widely used in distribution centers and warehouses throughout the United States and the world. AS/RS systems generally consist of machines that move up and down one or multiple parallel storage aisles, storing and retrieving products and materials for dissemination to internal and external destinations alike.


Automation refers to the use of computers and other automated machinery for the execution of business-related tasks. Automated machinery may range from simple sensing devices to robots and other sophisticated equipment.

Automobile Leasing

Leasing an automobile is an alternative to purchasing that usually enables consumers to pay lower up-front costs and make affordable monthly payments. At the end of the lease period, however, the consumer does not own the vehicle.

Baby Bonds

Baby bonds are savings-type securities that are available in small dollar denominations, typically $5000 or less. In the past, small dollar bonds were common in the United States, especially during wartime.

Balance Sheet

A balance sheet is a financial report that provides a summary of a business's position at a given point in time, including its assets (economic resources), its liabilities (financial debts or obligations), and its total or net worth. "A balance sheet does not aim to depict ongoing company activities," wrote Joseph Peter Simini in Balance Sheet Basics for Nonfinancial Managers.


Bankruptcy is a legal proceeding, guided by federal law, designed to address situations wherein a debtor—either an individual or a business—has accumulated debts so great that the individual or business is unable to pay them off. Bankruptcy law does not require filers to be financially insolvent at the time of the filing, but rather applies a criterion in which approval is granted if the filer is "unable to pay debts as they come due." Once a company is granted bankruptcy protection, it can terminate contractual obligations with workers and clients, avoid litigation claims, and explore possible reorganization avenues.

Banks and Banking

A bank is an institution that provides financial services to consumers, businesses, and governments. One major type of bank is the commercial bank, which has fewer restrictions on its services than other types of banks.

Banner Advertisements

Banner advertisements are graphic advertisements that appear on a World Wide Web site and are intended to build brand awareness or generate traffic for the advertiser's Web site. The term "banner" comes from the general shape for such advertisements, which is a short, wide strip that is usually placed at the top of a Web page.

Bar Coding

Bar coding is an automatic identification technology that allows data to be collected rapidly and accurately from all aspects of a company's operations, including manufacturing, inspection, transportation, and inventory elements. Because of these attributes, bar coding is used for a wide range of applications in almost every aspect of business.

Barriers to Market Entry

Barriers to market entry include a number of different factors that restrict the ability of new competitors to enter and begin operating in a given industry. For example, an industry may require new entrants to make large investments in capital equipment, or existing firms may have earned strong customer loyalties that may be difficult for new entrants to overcome.


Bartering is the exchange of goods and services among businesses. This practice may be undertaken by single businesses, but in recent years many companies that choose to barter have joined organized bartering networks that offer memberships to firms in a variety of industries.


Benchmarking is the practice of identifying, understanding, and adapting the successful business practices and processes used by other companies (or even other departments within the same company) to increase your own business success. It is a business strategy that is used by manufacturers and service-oriented companies alike.

Best Practices

Service and manufacturing firms often evaluate their performance in relation to the performance of industry competitors. The term "benchmarking" is often used to describe this process of comparing practices or strategies to other companies.

Better Business Bureaus (BBBS)

Better Business Bureaus (BBBs) are private nonprofit organizations that collect and report information to help consumers make informed decisions when dealing with businesses or charitable organizations. The BBB is not a government or law enforcement agency; it does not have the power to collect money, administer sanctions, or impose other penalties against companies or individuals that engage in poor business practices.


Biometrics is a field of science that uses computer technology to identify people based on physical or behavioral characteristics, such as fingerprints or voice scans. "Bio" in the name refers to the physiological traits that are measured, while "metrics" refers to the quantitative analysis that provides a positive identification of a unique individual.

Blue Chip

A blue chip stock is one that is well-established, financially sound, and historically secure. Blue chip companies are those that have a history of posting earnings and paying dividends, all while continuing to increase profits.


Bonds are debt instruments issued by corporations and a variety of government entities to raise money to purchase assets and finance deficits. In effect the bond issuer borrows money from the bond purchaser and agrees to pay interest at an established rate over a fixed period of time.