BPO Explained: What Business Process Outsourcing Is and How It Works
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Key terms
- Business Credit CardA card designed for business expenses with higher credit limits, employee cards, and expense tracking. Builds business credit separately from personal credit in some cases.
- Cash Flow Statement (Business)A financial statement that tracks the actual movement of cash in and out of a business over a specific period, organized into operating, investing, and financing activities. Unlike the income statement, which includes non-cash items like depreciation, the cash flow statement shows whether a company is generating enough actual cash to fund operations and growth. Positive cash flow is essential for business survival, even for companies that appear profitable on paper.
- Business PlanA formal written document that outlines a company's goals, strategies, target market, financial projections, and operational plans. A well-crafted business plan serves as a roadmap for the business and is often required when seeking financing from banks, investors, or venture capitalists. It typically includes sections on the executive summary, market analysis, organizational structure, product or service offerings, marketing strategy, and financial forecasts.
- Depreciation (Business)An accounting method that allocates the cost of a tangible asset over its useful life, reflecting the gradual wear, tear, and obsolescence of the asset over time. Depreciation is recorded as an expense on the income statement and reduces taxable income, providing a tax benefit even though it does not involve an actual cash outflow. Common assets that are depreciated include equipment, vehicles, buildings, and machinery.
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