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94 business abbreviations and what they mean

Business Abbreviations
Topics
94 business abbreviations or acronyms and what they mean
Final thoughts

The world of business is fast-paced. Abbreviations are often used to speed up communication and improve operational efficiency.

Learning the most common business acronyms can help you improve your performance at work and keep up in meetings without having to ask for clarification.

In this article, we’ll explain 94 of the most important business abbreviations, what they mean and when to use them.


94 business abbreviations or acronyms and what they mean

Here are the 94 abbreviations for business that you’re likely to hear with a detailed description for each.

ACCT: Account

An abbreviation of account, usually used in sales reporting software and balance sheets.

AIR: Assumed Interest Rate

The AIR is the interest rate that an insurance company selects. It determines the value of an annuity contract and the income payment that’s provided to the annuitant based on this value.

AOP: Annual Operations Planning

Annual operations planning is a budgeting process that involves forecasting the budget, costs and profit plan for the coming year.

AP: Accounts Payable

Accounts payable are the costs of goods or services that an organization owes its vendors.

API: Application Programming Interface

An API is a piece of software that allows different applications to interact. These are often used to integrate third-party add-ons into larger software stacks.

ARR: Annual Recurring Revenue

Annual recurring revenue is how much revenue a subscription-based customer will generate based on sales over a year. It’s a good way to predict how much a business might grow over a year or longer period.

ASAP: As Soon As Possible

This common acronym signifies that something will get done at the earliest possible time. For example, “I’ll deliver the report ASAP”.

B2B: Business-to-Business

B2B is when one business sells products to other businesses rather than individual consumers. For example, a B2B business might sell silicon motherboards to a computer manufacturer.

B2C: Business-to-Consumer

A B2C business sells its products or services directly to consumers. Imagine your typical retail or e-commerce store that sells physical goods to people.

BD: Business Development

The process of identifying and pursuing opportunities for business growth. For example, nurturing customer relations, finding new markets or new product launches.

BID: Break It Down

This acronym is used to signify when a topic needs to be broken down into easier-to-understand parts. If someone asks you to “BID”, they’re asking you to explain the subject more clearly.

BPO: Business Process Outsourcing

The process of outsourcing certain areas of a business’s operations. For example, a company might hire another company to do their accounting, IT, sales or after-sales service.

BR: Bounce Rate

BR is an email marketing metric that shows the percentage of emails that “bounce” or aren’t successfully delivered to recipients. A high bounce rate may flag you as a spammer to your email service provider.


CAO: Chief Analytics Officer

A high-ranking executive who manages the analysis of data within a company. They typically report to the CEO.

CEO: Chief Executive Officer

The CEO is generally the highest-ranking executive at a company (sometimes referred to as the “president”). CEOs make overarching business decisions that affect the direction of their company.

CFO: Chief Financial Officer

A CFO is a high-ranking executive responsible for managing the financial operations of a company. They report directly to the CEO.

CFP: Certified Financial Planner

A training award granted by the Certified Financial Planner Board of Standards, Inc. A CFP is a trained expert in financial planning, taxes, insurance and other financial tasks.

CMO: Chief Marketing Officer

Another high-ranking executive, the CMO manages the company’s marketing staff, strategies and promotions. They usually report directly to the CEO.

CMS: Content Management System

A CMS is software that helps with content marketing automation. Generally, these solutions help you create, distribute and manage digital content without needing professional web developers.

COB: Close of Business

COB is a sales acronym that refers to the end of the business day, usually 5 PM. Also known as end of day (EOD) and close of play (COP).

CoE: Center of Excellence

A team of skilled workers who develop the best practices in a particular area. For example, a human resources CoE might develop policies regarding talent acquisition that business units across an organization can follow.

COI: Certificate of Insurance

This is a document you receive from an insurer to show that you have the proper business insurance. Customers may ask to see your COI to make sure that you’re insured to do the work they want you to do, especially if it’s high-risk.

COO: Chief Operations Officer

Another C-suite executive position, usually second-in-command to the CEO. The COO oversees the daily administrative functions of a company.

CPA: Certified Public Accountant

CPAs are hired to provide accounting and financial services to the public and to companies.

CPC: Cost Per Click

In the pay-per-click advertising model, the CPC is the amount of money charged by the advertising agency, search engine or social media platform every time someone clicks on a paid post.

See PPC: Pay-Per-Click.

CPO: Chief Product Officer

A C-level executive who leads a company’s product organization, overseeing the product roadmap, product design and product marketing.

CR: Conversion Rate

CR represents the percentage of people exposed to marketing material that responded to a call to action (CTA). For example, if 100 people visited your website and 10 purchased your product, you have a 10% conversion rate.

Conversion rate formula

Conversions ÷ non-conversions


CRM: Customer Relationship Management

Customer relationship management is the process of tracking and nurturing customers in order to sell to them more effectively. CRM can also refer to software used to manage customer data, like Pipedrive.

CSR: Corporate Social Responsibility

CSR is the concept that corporations must be responsible for the social and environmental effects resulting from their actions. Companies’ CSR programs often encompass philanthropy efforts, environmental activism and diversity, equity and inclusion initiatives.

CTO: Chief Technology Officer

A C-suite executive who oversees the technical operations within a company. They report directly to the CEO.

CTR: Click-through Rate

The percentage of people that clicked on your advert or CTA after seeing it. The click-through rate is found by dividing the number of clicks by the total number of views that your link received.

DMP: Data Management Platform

A DMP collects and organizes sales data from various sources. Digital marketers use DMPs to build detailed customer profiles to deliver highly personalized marketing material.

DRI: Directly Responsible Individual

The DRI is the person who is accountable for the success or failure of a project.

EOD: End of Day

EOD means the end of a business day. It’s generally used to refer to a deadline, as in, “This task is due by EOD Tuesday”. A similar variation is end of week (EOW).

EOM: End of Message

EOM is used in email and text communication to signify the end of a message. It’s usually used in emails where the body is empty and the whole message is in the subject line. A similar term is end of thread (EOT).

EPS: Earnings Per Share

EPS is a public company metric calculated as the net income (or profit) divided by the number of available common shares. This shows how much money the company makes per share and is a good estimate for corporate value.

EPS formula

Profits ÷ number of shares = EPS


ETA: Estimated Time of Arrival

ETA is used to estimate when a job, task or delivery is expected to arrive. For example, “Shipment of supplies ordered. ETA Thursday, 8:30 AM”.

FIFO: First In, First Out

Commonly used in the retail and food industries, FIFO means that employees should try to sell the products in the order that they were received. This is especially important when products have expiration dates.

FTE: Full-time Employee

Most companies classify full-time work as 40 hours a week. For healthcare coverage, the IRS defines full-time employees as those who work over 130 hours per month or 30 hours per week. Full-time employees have certain legal entitlements, like overtime pay and paid time off.

FYI: For Your Information

Used in professional business emails to indicate that information is being shared, but that no immediate actions are required.

GC: General Counsel

The GC is the primary lawyer who gives legal advice to a company, usually directly to the CEO. Sometimes known as the chief legal officer (CLO) or corporate counsel.

GNP: Gross National Product

The GNP is the total value of goods and services produced in a country over a year. Tracking the GNP helps companies identify trends in economic growth.

HR: Human Resources

The human resources representative or department manages a breadth of employee operations like disciplinary action, hiring, training, termination and benefits.

HRM: Human Resource Manager

The human resource manager oversees the HR department.

HTML: Hypertext Markup Language

The main language used to develop websites that can be displayed in web browsers. Similar to HTTP (Hypertext Transfer Protocol), which is an internet protocol that works alongside HTML to let users interact with resources on the internet.

IAM: In A Meeting

Commonly used in email and instant messaging, IAM is often sent to indicate that the person is in a meeting and, therefore, unable to reply at the moment.

ICP: Ideal Customer Profile

The ICP is a composite account that outlines the demographic and behavioral qualities of a company’s target customer. Developing ICPs and buyer personas helps a company focus its sales and marketing efforts on prospects who are most likely to convert.

IMO: In My Opinion

This phrase is common in business communication and is a polite way of providing your opinion on a matter. Also known as IMHO (“in my humble opinion” or “in my honest opinion”).

KPI: Key Performance Indicator

KPIs are important metrics that indicate how well your company is performing in a certain area. For example, customer satisfaction rate is a KPI that tells you how happy your customers are with your products and service.

LOB: Line of Business

A line of business refers to a set of related products or services that a company provides. For example, a bank may have a line of business for consumer services which includes credit cards, loan programs and mortgages.

LOE: Level of Effort

LOE is used in project management and refers to activities that support the main project. An example of a level of effort activity is customer communication. It isn’t a part of the main project baseline, but it’s an important activity that needs to be done to support the project.

MoM: Month over Month

MoM refers to how a business metric changes between one month to the next as a percentage. For example, a 5% growth in revenue MoM. This is generally more volatile than measuring year-over-year (see YoY) and less volatile than measuring quarter-over-quarter see (QoQ).

MVP: Minimum Viable Product

An MVP is a product that has just enough features to be ready for early customer validation. It’s an early stage in the product development cycle that lets your business capture feedback and improve the product.

OC: Opportunity Cost

An opportunity cost is the value lost from other options when one alternative is chosen. For example, imagine a company is choosing between two locations for a new storefront. One is $3,000 per month, the other $2,750, but both have the same predicted foot traffic. The opportunity cost of choosing the first option is, therefore, $250 per month.

OKR: Objectives and Key Results

OKR is a goal-setting methodology that helps track progress against measurable objectives. For example, sales OKRs may include a clearly defined goal around increasing net dollar retention (the objective) that can be measured by the number of up-sell or cross-sell deals that the team lands (the key results).

OOO: Out of Office

This business acronym indicates when a person is absent. It’s usually used on calendars or in email autoresponders to signify when a person is away from work. Also known as OOTO, or “out of the office.”

P&L: Profit and Loss

Often used in the context of P&L statements, this summarizes a company’s revenue and expenses over a period of time, like a quarter or financial year.

P/E: Price to Earnings Ratio

The P/E ratio is the ratio of a company’s share price to its earnings per share (See EPS: Earnings Per Share). A high P/E ratio indicates that the stock is overvalued, while a low P/E shows the opposite.

P/E Ratio Formula

Market value per share ÷ earnings per share = P/E ratio


PA: Personal Assistant

Also known as a personal aide or secretary, the PA helps another employee with their daily tasks. In some businesses, higher-level employees such as managers and C-suite executives hire PAs to help manage email, coordinate meetings or book travel.

PM: Project Manager

Project managers are in charge of planning, managing and executing projects from start to completion. Their job involves managing a team, putting together schedules, determining the budget and allocating resources to each stage of the project until it’s finished.

PO: Purchase Order

A formal document sent by the buyer to the seller to request goods or services. Using a PO system can help forecast demand, optimize stock orders and improve cash flow.

POC: Point of Contact

The POC is the person that a company communicates with during a sale or collaborative project. For example, a salesperson might send an email to a member of a prospect’s buying committee saying that they will be the POC for that individual going forward.

POP: Point of Purchase

The POP is a strategic location to place advertisements within a store. These can be physical or online and help to convince shoppers to make a purchase while they’re browsing.

POS: Point of Sale

The place where the customer purchases their products, like a website or store checkout.

PPC: Pay-Per-Click

PPC is an online advertising model where the client pays an advertising platform for every click on the post.

See CPC: Cost-Per-Click.

PPV: Pay-Per-View

PPV is another model of online advertising, where the client pays an advertising platform for every view their content receives.

PR: Public Relations

The PR department is responsible for shaping how external audiences (including press, customers and investors) perceive a company. They create press releases and business announcements, make media appearances and try to create a positive brand story.

PTE: Part-time Employee

Most companies consider employees who work fewer than 40 hours per week as part-time. For the IRS, a part-time employee is one who works fewer than 30 hours per week.

PTO: Paid Time Off

The vacation time or personal leave that employees accrue during their time at a company. This doesn’t include sick days or unpaid days off.

QC: Quality Control

A process where a company makes sure its products and services are of sufficient quality.

QoQ: Quarter over Quarter

QoQ refers to how a business metric changes between one quarter to the next as a percentage. For example, a 5% growth in customer acquisition QoQ.

R&D: Research and Development

This is the set of activities that companies take to develop and improve new services and products. Some companies have their own R&D department specifically aligned with this goal.

RCA: Root Cause Analysis

Root cause analysis is a problem-solving strategy used to discover the origin of an issue so that it can be addressed in the most effective way.

ROA: Return On Assets

This is a financial ratio that measures how profitable a company is compared to its assets. It’s an indicator of how well a business leverages its assets to generate earnings.

ROA formula

Net income ÷ total asset value = ROA


ROE: Return on Equity

ROE is a measure of a company’s profitability. It’s calculated by dividing the net income by the shareholder’s equity in the company. The higher the ROE, the better the company is at turning its equity into profits.

ROE formula

Net income ÷ shareholder equity = ROE


ROI: Return on Investment

Return on investment is a sales metric used to determine how profitable an investment has been (or to compare multiple investments). In sales and marketing, ROI is often used to show how successful a particular campaign has been.

ROI formula

(Current value of investment - Initial cost of investment) ÷ Initial cost of the investment = ROI


ROM: Rough Order of Magnitude

A rough order of magnitude is an estimate of the costs associated with a project or service. Companies develop ROMs based on previous work or other vendors’ rates. They’re usually provided to customers who seek general information rather than a detailed cost estimate.

SAM: Serviceable Addressable Market

This is the portion of the total addressable market (TAM) that a business can feasibly acquire. For example, if your product is only available in English, then your SAM is the part of the TAM that is English-speaking.

SaaS: Software as a Service

In the SaaS sales model, companies sell subscriptions to software. An example of this is CRM systems, where companies pay a subscription fee to access on-demand, cloud-based software to manage their customers.

SEO: Search Engine Optimization

The process of improving web content to appear higher in search engine results pages (SERPs). Strong SEO practices make a company’s content more visible, bringing in more leads.

SKU: Stock Keeping Unit

A SKU is a unique identifying code used in inventory management. They’re usually associated with a barcode and are used to track inventory.

SLA: Service-Level Agreement

An SLA is a formal agreement that sets the expectations and terms between a service provider and their customer. It describes what products or services are to be delivered and in what timeframe, who will be the point of contact and how the sale will proceed.

SMART: Specific, Measurable, Achievable, Relevant, Time-bound

The SMART acronym is a framework used to create effective and achievable sales goals.

SME: Small to Medium Enterprise

An SME is a small or midsized company with a revenue or employee number below a certain limit. In the US, the criteria for SMEs are set by the Small Business Association. Also known as small-to-medium businesses (SMBs).

SMM: Social Media Marketing

A form of digital marketing using social media apps like Facebook, Instagram and TikTok to deliver relevant, educational and entertaining content to potential customers.

SOP: Standard Operating Procedure

These are the documented processes that a company has in place to guarantee consistency in operations. They generally follow a step-by-step formula.

SOW: Statement of Work

An SOW is an agreement that outlines a project’s goals and deliverables. It keeps both the vendor and customer on the same page regarding deadlines, scope and expectations.

SPA: Sales and Purchase Agreement

An SPA is a legally binding contract between a buyer and seller, typically used in high-cost transactions (like real estate sales processes). The agreement formalizes the terms and conditions of the sale.

SWOT: Strengths, Weaknesses, Opportunities, Threats

A SWOT analysis is a framework used to evaluate a company or product’s market position. These analyses involve identifying where a business has an edge over the competition and potential gaps that should be addressed to ensure long-term success.

TAM: Total Addressable Market

The total addressable market is how much revenue is available if a company had 100% of the market share.

TAT: Turnaround Time

The TAT is the timeframe that a project is to be completed within. TAT is usually used as a performance metric – more efficient operations mean a faster turnaround time.

ToS: Terms of Service

A ToS is a legal agreement outlining the obligations of a service provider and the end user. The user must abide by these rules or have their service terminated.

UI: User Interface

The part of a product that a user interacts with, like a website, device or app. UI design can make or break your user experience (UX), which ultimately influences whether customers stay with you or move to a competitor.

WOMM: Word Of Mouth Marketing

Popular in sales and marketing, word of mouth refers to free promotion by satisfied customers who tell their friends and acquaintances about your products or services.

YoY: Year over Year

YoY refers to how a business metric changes between one year to the next as a percentage. Unlike month over month or quarter over quarter, YoY accounts for all seasonal periods. This makes it a good metric for comparing business performance from one year to the next, which is also important to investors.


Final thoughts

Abbreviations for business are incredibly common, as are abbreviations for certain industries, like sales acronyms and marketing abbreviations. Also known as “business English”, these jargon terms are more useful than they first appear. With a solid understanding of business terms, acronyms and abbreviations, you’ll never be left in the dark again.

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