Every business term, in plain English.
Accounting, payroll, HR, inventory, and CRM jargon decoded by operators who've actually used these words in context. No textbook language, no paywalls.
Every term, every module.
Accounts payable (AP)
Money your business owes to suppliers or vendors. Think of it as your "we owe them" list: invoices you've received but haven't paid.
Read definition →Accounts receivable (AR)
Money owed to you by customers. Your "they owe us" list: invoices you've sent that are still unpaid.
Read definition →Amortization
Spreading the cost of an intangible asset over its useful life. Like depreciation, but for things you can't touch: patents, licenses, goodwill.
Read definition →Asset
Anything your business owns that has value: cash, equipment, inventory, even intellectual property. Assets go on the left side of your balance sheet.
Read definition →Audit trail
A chronological record of every change made to a financial entry: who changed what, when, and why. Non-negotiable for compliance.
Read definition →Attrition rate
The percentage of employees who leave over a given period without being replaced. Different from turnover: attrition means the role disappears too.
Read definition →Balance sheet
A snapshot of what your business owns (assets), owes (liabilities), and is worth (equity) at one specific moment. Assets = Liabilities + Equity. Always.
Read definition →Burn rate
How fast your business spends cash each month. If you have $120K in the bank and burn $20K/mo, you've got 6 months of runway. Startups live and die by this number.
Read definition →Billing cycle
The recurring time period between invoices: monthly, quarterly, annually. Mismatch your billing cycle with your cash needs and you'll feel it fast.
Read definition →Benefits administration
Managing employee benefits: health insurance, retirement plans, PTO, perks. At 10+ employees, this stops being a spreadsheet job.
Read definition →Bill of materials (BOM)
A complete list of parts, components, and quantities needed to build a product. Your recipe card, but for manufacturing.
Read definition →Bank reconciliation
Matching your accounting records to your actual bank statement. The monthly ritual of figuring out why the numbers don't match, and fixing it.
Read definition →Cash flow
The actual movement of money in and out of your business. Profitable companies go bankrupt from bad cash flow. This is the number that keeps the lights on.
Read definition →Chart of accounts
The master list of categories you use to classify every transaction: income, expenses, assets, liabilities. Your financial filing system. Get this wrong early and you'll regret it at tax time.
Read definition →Churn rate
The percentage of customers who stop paying you in a given period. For SaaS, anything above 5% monthly means your bucket has a hole.
Read definition →Cost of goods sold (COGS)
The direct costs of producing what you sell: materials, labor, manufacturing. Does not include rent or marketing. Revenue minus COGS equals gross profit.
Read definition →Contractor vs employee
The classification that determines who handles taxes, benefits, and labor protections. Misclassify this and the IRS will find you. It's their favorite audit trigger.
Read definition →CRM (Customer Relationship Management)
A system for tracking every interaction with leads and customers. At its best, it's your business's institutional memory. At its worst, it's a data graveyard.
Read definition →The terms everyone looks up.
These get the most traffic across all eight modules. If you're starting from zero, start here: these are the concepts your accountant assumes you know.
Accrual accounting vs cash basis
Accounts payable vs accounts receivable
Gross pay vs net pay
Revenue recognition: when is money really yours?
Depreciation explained simply
1099 vs W-2: contractor or employee?
MRR, ARR, and why they matter
PTO policy: accrual vs lump sum vs unlimited
Find the vocabulary that matters for you.
Every term is tagged to the Encarmo module where you'll encounter it. Jump straight to the vocabulary that matters for your workflow.
About the Encarmo glossary.
Everything you need to know about our definitions, accounting standards, and editorial guidelines.
How does the Encarmo glossary differ from standard financial dictionaries?
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Most accounting glossaries quote formal textbooks or IRS regulations verbatim. The Encarmo Glossary is written by operators and CPAs specifically for business owners, explaining practical implications, formulas, real-world examples, and how each concept connects across your modules.
Which accounting standards are used in these definitions?
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Definitions follow US GAAP (Generally Accepted Accounting Principles), since Encarmo is built for US-based businesses. Where a term works differently under IFRS or another standard, that difference is called out directly in the full definition rather than left ambiguous.
How often are new terms added to the glossary?
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New terms are added at a rate of roughly 4 to 5 per week, prioritized by what's actually being searched and by gaps our own support team hears about from customers.
Can I suggest a term or report an update?
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Yes. Email support@encarmo.com with the term or correction and it goes to the team that maintains this glossary.
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