It seems that every industry has its own special jargon, a secret language of acronyms and buzzwords

that make little sense to anyone from the “outside” world. When running a small business, you must wear
many hats, a few of which require you to navigate the intricacies of different industries and, as a result,
their quirky vocabulary. Unfortunately, in these cases, jargon can often be a huge stumbling block.
To give you a hand, below are 24 terms from the accounting world that every business owner should
know.

1. Accounts Receivable
Accounts receivable includes money owed by customers to another company or individual as payment
for goods and/or services. It is considered an asset on a company’s balance sheet, because there is an
understanding that the clients are legally obligated to pay this amount.
2. Accruals
This is a list of expenses that have been incurred but are not yet paid, or a list of sales that have been
completed but not yet billed. Accruals relate to items that will hit your books imminently, either in the
positive or negative, but haven’t yet, normally due to the time it takes to complete accounting processes.

3. Accrual Basis Accounting

The accrual accounting method allows for some flexibility when expenses and income are recognized. In
this method, companies report when income is earned and when expenses are incurred. There are rules
that dictate when income is and isn’t recognized for the reporting period, as well as best practices for
dealing with bad debt expenses.
4. Assets
Assets are everything that a company owns. In most cases, accounting assets are tangible assets, such
as equipment, property, land, cash and tools. But intangible assets, such as
stock, copyrights, patents and trademarks, can also fall under this category.
5. Bad Debt Expense
This is an entry on a company’s income statement that tracks non-collectible accounts receivable (i.e.
“bad debt“) during a specific period of time.
6. Balance Sheet
A balance sheet is an overview of a company’s financial status, including assets, liabilities and equity.
7. Capital
Commonly referred to as the amount of money a company has to invest or spend on necessary items for
the business, capital is money that can be accessed, not including company assets or liabilities. It is
often referred to as “working capital.”

8. Cash Basis Accounting

Cash basis accounting is a straightforward accounting method that is particularly useful for small or new
businesses. Revenues and expenditures are recorded when payments are received and sent. It is
especially valuable for companies that don’t maintain inventories.
9. Depreciation
Defined as the decrease of an item’s value over time due to use, depreciation is especially important for
tax purposes, as larger pieces of equipment that directly impact the company’s ability to make money
can be written off on tax returns based on their depreciation. These are items that are used for more
than a year.
10. Dividends
Dividends are company earnings that are distributed on a regular basis to company shareholders.
Dividend amounts or percentages are typically decided by a corporation‘s board of directors and can be
issued as cash, shares of stock or other property.
11. Equity

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Equity is the amount of money that has been invested in the company by its owners. If the company is
small with only a handful of owners, this can also be referred to as “owner’s equity.” If the company has
many different owners, or if the company’s ownership has been parsed out via stock options, equity can
also refer to ownership collectively held by shareholders.
12. Expenses
There are typically four types of expenses: fixed, variable, accrued and operational.
13. Fixed Expense
Fixed expenses stay consistent from month-to-month, year-to-year. This typically includes expenses like
salaries, rent and so forth. These costs are not affected by fluctuations in sales, production or the
market.

14. Variable Expense

Variable expenses are tied to the company’s production. These costs can go up or down based on
increases and decreases in production or sales.

15. Accrued Expense

Accrued expenses are single accounting expenses that are being reported but haven’t yet been paid.

16. Operational Expense

Operational expenses are costs that are necessary for a company to conduct business.

17. Fiscal Year

A fiscal year is a period of time that a company uses for accounting purposes and in preparing financial
statements. The fiscal year can coincide with the calendar year; however, it can also be different, such
as October to September or July to June. Fiscal-year start and end dates are normally determined by the
company and may depend on how long it will take to close out the books for the year and prepare all
financial statements for federal and state tax submittals.
18. Forecasting
The process of using a company’s historical financial data to predict future business
trends, forecasting is typically used by organizations to best estimate budgets for an upcoming period of
time. This often includes supply and demand figures, sales records and expenses.
19. General Ledger
This is the complete recording of a company’s financial transactions over the lifetime of the organization.

20. Journal
Journals can also be referred to as accounts. This is where transactions are recorded as they occur and
before they are transferred to the official accounting record, such as the general ledger.

21. Liabilities
Liabilities are debts that a company is responsible to pay in the short or long term.

22. Profit and Loss Statement

Commonly referred to as “P&L,” a profit and loss statement is a report generated by the company or its
accountant that lists earnings, expenses and net profits for a given period of time.
23. Revenue
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Revenue is the total amount of money collected for goods or services sold before any expenses are
subtracted. It also includes any credits or discounts for returned merchandise.
24. Trial Balance
Trial balance is an exercise used to confirm final figures before generating financial statements. It
requires placing debits and credits on a worksheet to ensure that any

How to Improve Your Management Procedures Usability

Are your people consistently following your procedures? Each year, organizations lose thousands of
dollars through common mistakes and lapses in usability. But what does that mean for business owners
and executives? How do you improve usage of management procedures?
Ask yourself:
 Are your required actions described thoroughly and accurately, or are the details left open to
interpretation?
 Is your content consistent and complete, or are your writers leaving gaps no one has noticed?
 Are revisions controlled, or are different people using different versions?
 Are your procedures compliant with regulations? Are you sure?
 Are all documents written to produce clear, measurable results?
If you’re unsure about any of the answers to these questions, there is good news: you can make your
procedures clear and complete without combing through all of them yourself, line by line. You have
invested in your procedures; now ensure you are communicating clear expectations, and your
professionalism, with the best tools possible.

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How to Improve Management Procedures:
To be effective, procedures must be action oriented, grammatically correct, and written in a consistent
style and format to ensure usability. These guidelines, along with industry “best practices” that are
documented in auditable criteria, can be used :

1. Context. Actions must properly describe the activity to be performed.

2. Consistency. All references and terms are used the same way every time, and the procedure
must ensure consistent results.
3. Completeness. There must be no information, logic, or design gaps.
4. Control. The document and its described actions demonstrate feedback and control.
5. Compliance. All actions are sufficient for their intended compliance.
6. Correctness. The document must be grammatically correct without spelling errors.
7. Clarity. Documents must be easy to read and understandable.

Strengthen Management Procedures’ Documents

With a technical writing review, professional technical writers can review and edit your documents.
Methodologies have been developed and used by experienced technical writers to strengthen policies
and procedures, so you can put efficiency and expertise to work saving you time and hassle. You can
eliminate the costly professional headache of poorly written management procedures.

Case Study: Procedure Mistakes Add Up Quickly

Without knowing it, employees at a local auto parts company were having a costly problem determining
when to accept customer credit. The company actually had a detailed credit application procedure,
including an exhaustive error correction routine, but the procedure had one fatal flaw: it was not properly
indexed.

Without a way to readily locate and reference the applicable procedure in the operations manual,
employees could not find it and were simply not using it at all, leading to an inconsistent process and
wildly varying output. Potentially valuable customers were regularly turned away by some staff members,
while others accepted bad credit risks because they were unsure of which ones to reject.

A small omission like this can add up to thousands of dollars in lost sales and good will. Even the most
thorough procedures inevitably have gaps that come from being “too close” to the process or not
following the basic rules of effective procedure writing.

Get the Help and Reap the Rewards:

 Easy upgrades to your documents

 Increased clarity for your written procedures
 Expert objective commentary on your documents
 Fast results to model other procedures
 Convenient tech writers at your service
 Detailed grammar and language correction
If your policies and procedures are incomplete, outdated or inconsistent, then you are probably not
driving the performance improvement you intended. Likewise, your management procedures are not
getting used as much as they should be. But no matter what your worst procedure headache is, you can
eliminate your lapses in usability now and improve to “best practices” standards using a procedure
review.

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Q1: what are the pain points of a store manager and how can we reduce those pain
points in order to increase customer service efficiencies?

A1: Key Responsibilities of a Retail Store operations Manager is to

 Manage employees
 Control costs
 Manage merchandise
 Provide Customer Service

The top 3 responsibilities mentioned above can be managed with internal processes.

The business looks at continuously increasing the productivity of two of the most important assets: the
firm’s investments in its employees and its real estate.

Traditionally, issues pertaining to merchandise management were considered the most important retail
implementation decisions and buying was considered as the best career path.

Today, developing a strategic advantage through merchandise management is becoming more and more
difficult.

Competing stores often have similar assortments of merchandise. Therefore servicing the customer
through store management or convenience, have become a critical basis for developing a strategic
advantage.

Learning tip:

You need to find a differentiator in your retail business model, your retail store or brand need to stand
for something (for example Walmart positioning stands for everyday low prices).

Learn about the “ Power of Bundle” in merchandising planning, Read here.

Create mediums/channels to listen to your customer’s needs or grievances:

Often a retailer tends to lose ground because there is a delay in reacting to customer feedback and
therefore they start losing customers and start to react only when it is too late.

One model that is fast becoming successful in quickly reacting to the ‘Voice of Customer’ is the ‘Service
Gaps model’.

Retailers have started to adopt this model. Blended with technology, it becomes very effective. The basics
of the model are like this:

There are essentially 4 types of gaps.

1. The Knowledge Gap

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 It is the difference between the Customer’s expectation for service quality and the retailer’s
perception of customer expectation. Knowing what the customer wants requires a comprehensive
study on the customer’s expectation and continuous interaction with her.

2. The Standards Gap

It is the difference between the retailer’s perception of customer expectation and the standards
defined to fulfill this expectation.

3. The Delivery Gap

It highlights the difference between the defined standards and the actual service delivered.

4. The Communication Gap

It addresses the difference between the actual service delivered and the customer’s perception of
that service quality. It also highlights the difference in the retailer’s communication of that service
and the customer’s perception.

Q2: How can a store manager reduce the stock loss or stock variances which is the
biggest margin eater for any retailer?

A2: Inventory is another big investment for a retailer. It has to be tracked with precision.

Few pointers for optimizing retail store operations:

a) Calculate shrinkage as an ‘absolute variance’ and not as a ‘net variance’. Both over & under inventory
leads to sale loss and other inefficiencies within a store and across the supply chain.

b) Break down the entire inventory movement process in small logical processes and then start
monitoring every subprocess. You are bound to identify the problem area.

c) Detecting and Preventing Shoplifting can be minimized by:

 Implementing the correct Store Design. Avoid too many pillars, keep the line of sight clear
supported with CCTV system
 Employee Training
 Don’t assume that all shoplifters are poorly dressed

Read the article on Retail shrinkage and its control measures, click here 

Q3. How can a store operations manager work closely with merchandise planning and
Visual teams in order to increase the stock turnover or stock rotation?

A3: The support that the retail store operations usually provides is
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a) Display merchandise, maintain visuals standards & follow planograms as directed for the store

b) Work closely with buyers in suggesting new merchandise based on customer feedback, buy
merchandise wherever applicable, Plan & manage special promotions, Markdown merchandise, etc.

The advent of technology is making this process very accurate and speedy. We are seeing tech solutions
taking customer feedback and publishing it internally and accurately via machine learning. So the manual
element and errors are getting minimized.

Right merchandise in the right quantities with a visual appeal is bound to help the inventory throughput

Q4. What kind of customer service differentiation do you see both in India, in the
middle east and the European markets? How can we improve our customer service
aspect in case we lack the same when compared to western counterparts?

A4: India is all about volumes.

There are Indian hypermarket stores regularly getting almost 7 to 8k number of bills (NOBs) per day
during the weekends. In festive season this goes up by two folds. The Middle East & Europe
comparatively does not see this congestion.

The Indian labor is cheap and availability is good. Hence customer service is more via manpower than
anything else.

One common trend which I see catching up in all these regions is giving convenience to the customer.
Hence,various door to door delivery models is coming up which are supported very well by the last mile
logistics. I see a lot of customer acquisition through this medium.

Learn about the business model of last-mile logistics, click here.

Q5. How can technology help to reduce the delivery and communication gap which you
have mentioned in your answer?

A5: Tech solutions that cover the entire journey of the customer in a store and capture customer feedback
in a convenient way help to reduce this gap.

The structured and unstructured feedback is processed via machine learning and categorized.

A retailer can then decipher & plug the communication and delivery gap.

As a retail professional, it is my duty to support upcoming retail professionals by providing them the right
wisdom from industry professionals through the Q&A session on my blog. This is a first Q&A session
and I promise to bring you more from industry experts.

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