15 basic business terms every entrepreneur should learn | MileIQ

Learning basic business terms is pivotal to improving your business acumen. Fortunately, you don’t need an MBA to master key business concepts. This primer will walk you through the basic business terms in easy-to-understand ways.

Basic business terms to know

Here are some of the fundamental business terms you should know. If some of these seem too easy for you, let us know in the comments what you’d like to learn more about.

Accounting

This concept should be in every entrepreneur’s arsenal of basic business terms. Accounting involves the systematic recording and reporting of business financial transactions. Accounting is often complicated. You may want to hire a professional to handle this.

Accounts receivable

This is the amount of money your customers or clients owe your business for goods or services you supply. This total value can give you a snapshot of the amount owed to your business at any given time.

Accounts payable

Accounts payable is a measure of how much you owe your creditors for goods or services supplied to you.

Assets

“Assets” refers to your business’ cumulative financial holdings. These are usually classified as current or fixed. Current, or short-term, assets include cash or inventory. Fixed, or long-term assets, include equipment or land.

Liabilities

Liabilities are debts your business owes another person or entity. Like assets, you’ll have to define liabilities as current or long-term. Current, or short-term, liabilities might include an expense payable to a supplier. Many business loans are long-term debts.

Revenue

Revenue refers to the income you get from a business activity in a given time. You can calculate earnings by multiplying the per-unit cost of goods or services by the number of units sold.

Expenses

Does your business incur expenditures for equipment, utilities or inventory? These are all examples of expenses‚ money you spend to operate your business. For the self-employed, legitimate business expenses are tax-deductible.