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Originally published:
Jun-23-2006
Acronyms, Initialisms and Abbreviations
in the World of B2B, B2C, ARM and ARO
Have you ever had a V.I.P. invite you to a 1 P.M. lunch? If so, I'll bet you got your RSVP to him ASAP! But if he wanted you to be prepared with the firm's OA list with a MOM recap because he wanted to discuss an increase in CRF charges, would you be as puzzled as a character in the DaVinci Code?
Acronyms and initialisms. We've used many of them easily and comfortably over the years. They've just been there, part of the language. Everyone seems to know what they mean. Possibly because they have come to us at a pace we were able to assimilate into our consciousness and absorb into our communication.
In recent years, however, it's as if someone has gone berserk with a shotgun loaded with the alphabet. Suddenly cryptic notations for everything from medical terms and industry terminology to common written conversation have appeared everywhere. And, more perplexing, what an acronym means in one context may mean something entirely different in another. Every industry, science, social group, and interest area has them. And, unless you can crack the code, you very well may be out of the loop.
What follows are definitions of some commonly used business acronyms. Think of it as “Business Acronyms 101”.
| Acronym |
For |
Definition |
| AW |
Air Way Bill |
Document issued on behalf of the carrier describing the kind and quantity of goods being shipped, the shipper, the consignee, the ports of loading and discharge and the carrying vessel. |
| C&F |
Cost and Freight |
A pricing basis in which the buyer pays the cost of the cargo and the freight costs. |
| CAD |
Cash Against Documents |
A method of payment for goods of which documents transferring title are given to the buyer upon payment of cash to an intermediary acting for the seller. |
| CIA or CID |
Cash In Advance |
The most secure option for an exporter as full payment is due before the merchandise is shipped. It eliminates all risk of non-payment and bolsters working capital. |
| CLC |
Confirmed Letter of Credit |
A letter of credit, issued by a foreign bank, with validity confirmed by a bank in the seller’s country. An exporter who requires a confirmed letter of credit from the buyer is assured of payment by the bank in his country even if the foreign buyer or the foreign bank defaults. |
| COD |
Cash on Delivery |
The payment of products and/or services received is done at the time of actual delivery rather than paid for in advance. |
| D/A or DOA |
Documents Against Acceptance |
A bank releases the documents to the buyer/importer against acceptance of a bill of exchange (draft) guaranteeing payment at a later date. |
| D/P or DOP |
Documents Against Payment |
A bank releases the documents to the buyer/importer against acceptance of a bill of exchange (draft) guaranteeing payment at a later date. |
| EOM |
End of Month |
Used in payment terms. Ex. Terms “2% 15 EOM” means that a 2% discount is earned if the invoice is paid in 15 days; the full amount is due at the end of the month. |
| L/C |
Letter of Credit |
An undertaking by an issuing bank to the beneficiary to make payment within a specified time, against the presentation of documents which comply strictly with the terms of the credit. In theory, it substitutes the creditworthiness of a bank for that of the buyer. |
| MOM |
Middle of Month |
Used in payment terms. Ex. “1% 10 MOM” means that a 1% discount is earned if the invoice is paid in 10 days; the full amount is due the middle of the month. |
| OA |
Open Account |
Credit extended by a business to a buyer. The most simple but most risky method of payment which should not be used until a good trading relationship has been established with the buyer. |
| p.a. |
Per Annum |
Per year. |
| P/I or PI |
Pro Forma Invoice |
Basically an advance copy of the final invoice. It is different from a quotation. The pro forma invoice is often used by the importer to apply for a letter of credit (L/C) and foreign exchange (import) allocation. |
| SD |
Sight Draft |
A draft or bill that is payable on demand or upon presentation. It is also called a “demand draft”. |
| ULC |
Unconfirmed Letter of Credit |
A letter of credit which has not been guaranteed or confirmed by any bank other than the bank that opened it. The advising bank merely informs the beneficiary of the letter of credit terms and conditions. |
“INCOTERMS” is an acronym for International Commercial Terms, as well as a list of universally recognized acronyms and definitions of international trade terms. These were developed by the International Chamber of Commerce (ICC) in Paris, France and define the trade contract responsibilities and liabilities between buyer and seller. Incoterms were first published in 1936. The most recent version is called INCOTERMS 2000.
Thirteen international commercial terms are grouped into E, F, C and D, designated by the first letter of the term (acronym), as follows:
| Group |
Term |
For |
Definition |
| E |
EW |
Ex Works |
The seller has the goods ready for collection at his premises (factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. |
| F |
FCA |
Free Carrier |
The seller delivers the goods into the custody of the first carrier, and this is where risk passes from seller to buyer. The buyer pays for the transportation. It can be used for all modes of transportation including multimodal transport. |
| F |
FAS |
Free Alongside Ship |
The seller pays for transportation of the goods to the port of shipment. The buyer pays loading costs, freight, insurance, unloading costs and transportation from the port of destination to his factory. The passing of risk occurs when the goods have been delivered to the quay at the port of shipment. |
| F |
FOB |
Free On Board |
Similar to FAS, but the seller also pays for the loading costs. The passing of risk occurs when the goods pass the ship's rail at the port of shipment. Internationally the term specifies the port of origin, e.g. "FOB New York" or "FOB Vancouver". Domestically within the United States and Canada, the term is used in two common phrases, "FOB shipping point" and "FOB destination," to distinguish when the title of goods passes from the seller to the buyer. Under the terms of "FOB shipping point," the title of the goods passes to the buyer at the shipping point. Similarly, under the terms of "FOB destination", the title of the goods passes to the buyer when the goods arrive at their destination. The distinction is important because it determines who pays for the shipping costs of the merchandise: whoever holds the title to the merchandise at the time of its shipping pays for its transportation costs. Also, it is important if the shipment is damaged while traveling and the owner must file the freight claim. Note that this usage is inconsistent with the official Incoterm definitions, and should not be used for international shipping. |
| C |
CRF |
Cost and Freight |
The seller pays for transportation to the port of shipment, loading and freight. The buyer pays for the insurance and transportation of the goods from the port of destination to his factory. The passing of risk occurs when the goods pass the ship's rail at the port of shipment. |
| C |
CIF |
Cost, Insurance and Freight |
The selling price includes the cost of the goods, the freight or transport costs and also the cost of marine insurance. CRF and CIF apply only to conventional maritime transport. |
| C |
CPT |
Carriage Paid To |
Used for all modes of transportation. The seller pays for the freight to the named point of destination. The buyer pays for the insurance. The passing of risk occurs when the goods have been delivered into the custody of the first carrier. |
| C |
CIP |
Carriage and Insurance Paid To |
The passing of risk occurs when the goods have been delivered into the custody of the carrier. It is the same as CPT except that the seller also pays for the insurance. |
| D |
DAF |
Delivered at Frontier |
The seller pays for transportation to the named place of delivery at the frontier. The buyer arranges for customs clearance and pays for transportation from the frontier to his factory. The passing of risk occurs at the frontier. Used when goods are transported by rail or road. |
| D |
DES |
Delivered Ex Ship |
The seller pays for the same as in CIF, but the passing of risk does not occur until the ship has arrived at the port of destination, but before the goods have been unloaded. |
| D |
DEQ |
Delivered Ex Quay |
The same as DES, except the passing of risk does not occur until the goods have been unloaded at the port of destination. |
| D |
DDU |
Delivered Duty Unpaid |
The seller pays for all transportation costs and bears all risk until the goods have been delivered, but does not pay for the duty. |
| D |
DDP |
Delivered Duty Paid |
The seller pays for all transportation costs and bears all risk until the goods have been delivered and also pays the duty. |
An excellent explanation of what each INCOTERM means to the buyer and seller is found on Export911.com. The official explanations, along with print materials defining INCOTERMS are available at the web site for the International Chamber of Commerce.
Abbreviations used in the United States and some other predominantly English-speaking countries are listed below. A fairly detailed list of international corporate extensions can be found at CorporateInformation.com.
| Abbrev. |
For |
Description |
| Corp. |
Corporation |
Same as incorporated. |
| d/b/a |
Doing Business As |
Used by individuals who want to have a business name, but don't want to incorporate. Companies also use this designation when they operate under a name other than the the name of a filed corporation/LLC. |
| Inc. |
Incorporated |
The company is Incorporated in any of the U.S. 50 states, and the owners have limited liability. Incorporated companies can be either privately or publicly held in the U.S. |
| LLC |
Limited Liability Company |
An LLC offers the owners limited liability but allows the income a company makes to be taxed at the owners’ personal income tax rates, even if the profits were not distributed. |
| LLP |
Limited Liability Partnership |
An LLC offers the partners limited liability but allows the income a company makes to be taxed at the partners' personal income tax rates, even if the profits were not distributed. |
| Ltd. |
Limited |
Company is incorporated and the owners have limited liability. |
| N.A. |
National Association |
A national bank. The name is a required part of the distinguishing legal title of a national bank. |
| PLC |
Public Limited Company |
Publicly traded company where the owners have limited liability. |
| Pty. |
Proprietary |
Business structure that has at least one shareholder with a limited number of shares. Pty companies are either Limited (Ltd.) where shareholders are afforded more protection when it comes to the level of liability they face for company debts; or Unlimited whereby shareholders face unlimited liability. |
| Acronym |
For |
Definition |
| ARM |
Accounts Receivable Management |
Processes and systems used to manage money that is owed to a company for goods and services it has provided to customers on credit. |
| ARO |
Accounts Receivable Outsourcing |
Day-to-day execution, by a third party service provider, of various tasks required to manage money owed by customers buying on credit. Can involve the entire process, from credit analysis through invoicing, cash application and collection, or any single process. |
| B2B |
Business-to-Business |
Relating to commercial transactions. |
| B2C |
Business-to-Consumer |
Relating to retail (consumer) transactions. |
| CRM |
Customer Relationship Management |
An enterprise-wide strategy that focuses on the needs and wants of customers. |
| ERP |
Enterprise Resource Planning |
ERP Systems are management information systems that integrate and automate many of the business practices associated with the operations or production and distribution aspects of a company engaged in manufacturing products or services. |
| HS |
Harmonized System |
An international six-digit commodity classification developed under the auspices of the Customs Cooperation Council. Individual countries have extended it to ten digits for customs purposes, and to 8 digits for export purposes. |
| MCN |
MultiNational Corporation |
An organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management. |
| PoP |
Point of Purchase |
Place where a product or service may be bought or promoted. |
| SWOT |
Strengths, Weaknesses, Opportunities and Threats |
Strategic planning tool used to evaluate a project or in a business venture. |
| Acronym |
For |
Definition |
| FIFO |
First In, First Out |
Method for recording the value of inventory that presumes that the next item to be shipped will be the oldest of that type in the warehouse. |
| GDP |
Gross Domestic Product |
One of several measures of the size of an economy; defined as the market value of all final goods and services produced within a country in a given period of time. |
| GST |
Goods and Services Tax |
Similar to a sales tax in that it is levied at the time of the sale of goods and services. |
| LIFO |
Last In, First Out |
Historical method of recording the value of inventory presuming a firm records the last units purchased as the first units sold. |
| NSF |
Not Sufficient Funds |
As related to person and business check payments. |
| P&L |
Profit and Loss |
A financial statement that indicates how Net Revenue (money received from the sale of products and services before expenses are taken out) is transformed into Net Income (the result after all revenues and expenses have been accounted for). It is also called an Income Statement in the U.S. |
| PPP |
Purchasing Power Parity |
An estimate of the exchange rate required to equalize the purchasing power of different currencies, given the prices of goods and services in the countries concerned. |
| ROI |
Return on Investment |
A comparison of the money earned (or lost) on an investment to the amount of money invested. |
| SWIFT |
Society for Worldwide Interbank Financial Telecommunication |
Financial industry-owned co-operative supplying secure, standardized messaging services and interface software to 7,650 financial institutions in over 200 countries. SWIFT's worldwide community includes banks, broker/dealers and investment managers, as well as their market infrastructures in payments, securities, treasury and trade. |
| VAT |
Value Added Tax |
Similar to a sales tax in that it is levied at the time of the sale of goods and services. |
For a list of active currency codes, visit Wikipedia ISO 4217. ISO 4217 is the international standard describing three letter codes to define the names of currencies established by the International Organization for Standardization (ISO). The ISO 4217 code list is the established norm in banking and business all over the world. For real time currency conversion, visit OANDA.com.
| AUD |
Australian Dollar |
BRL |
Brazil Real |
| CAD |
Canadian Dollar |
CHF |
Swiss Franc |
| CNY |
Chinese Yuan Renminbi |
EUR |
Euro |
| GBP |
UK Pounds Sterling |
HKD |
Hong Kong Dollar |
| ILS |
New Israel Shekel |
INR |
Indian Rupee |
| JPY |
Japanese Yen |
MXN |
Mexican Peso |
| RUB |
Russian Ruble |
USD |
US Dollar |
| Acronym |
For |
Description |
| ASEAN |
Association of Southeast Asian Nations |
10-member organization: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam |
| EFTA |
European Free Trade Association |
Iceland, Liechtenstein, Norway and Switzerland |
| ICJ |
International Court of Justice |
Principal judicial organ of the United Nations. |
| IMF |
International Monetary Fund |
“An organization of 184 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty". With the exception of North Korea, Cuba, Liechtenstein, Andorra, Monaco, Tuvalu and Nauru, all UN member states either participate directly in the IMF or are represented by other member states. |
| NAFTA |
North American Free Trade Agreement |
A free trade agreement among Canada, the United States, and Mexico. NAFTA went into effect on January 1, 1994. |
| OPEC |
Organization of Petroleum Exporting Countries |
Made up of Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. |
| SAARC |
South Asia Association for Regional Cooperation |
Association of eight countries of South Asia: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. These countries comprise an area of 5,127,500 km2 and a fifth of the world's population. |
| WTO |
World Trade Organization |
An international, multilateral organization, which sets the rules for the global trading system and resolves disputes between its member states, all of whom are signatories to its approximately 30 agreements. WTO headquarters are located in Geneva, Switzerland. |
| Acronym |
For |
Description |
| ISO |
International Organization for Standardization |
A global network that identifies what international standards are required by business, government and society, develops them in partnership with the sectors that will put them to use, adopts them by transparent procedures based on national input and delivers them to be implemented worldwide. |
| ISO 9000 |
[See Above] |
A family of ISO standards for Quality Management Systems. ISO 9000 does not guarantee the quality of end products and services; rather, it certifies that consistent business processes are being applied. |
| KCRP |
Key Customer-Related Process |
A set of processes performed by a company that are essential to effectively servicing the customer. KCRPs are utilized in quality standards systems like Six Sigma. |
| NAICS |
North American Industry Classification System |
Used by business and government to classify and measure economic activity in Canada, Mexico and the United States. |
| SIC |
Standard Industrial Classification |
United States government system for classifying industries by a four-digit code. Established in the 1930s, it was supposed to be supplanted by the six-digit North American Industry Classification System in 1997. However, SIC codes are still in use in the U.S. |
| UCC |
Uniform Commercial Code |
One of the uniform acts that has been promulgated in attempts to harmonize the law of sales and other commercial transactions in all fifty states within the United States of America. The Code, as the product of private organizations, is not itself the law, but only has the force of law if enacted by states. |
| Initialism |
For |
Definition |
| e.g. |
exemplia grata |
for example |
| etc. |
et cetera |
and so forth |
| i.a. |
ibidem |
in the same place |
| n.a. or N/A |
not applicable |
|
| re |
reference |
concerning; with reference to |
| Acronym |
ForFor |
Description |
| CPC |
Cost Per Click |
Used in online advertising and online marketing circles. With many advertising networks and websites, the advertiser is charged for an ad (on the advertising network or website) only when a user clicks on it. How much they pay (for that click) is called their cost per click or CPC. |
| FTP |
File Transfer Protocol |
Commonly used protocol for exchanging files over networks, such as the Internet or an intranet. |
| GIF |
Graphics Interchange Format |
Pronounced jiff or giff (hard g) -- A bitmap image format used on the web for pictures with up to 256 distinct colors. GIFs are compressed files, which reduces the amount of time it takes to transfer images over a network connection. |
| HTML |
Hypertext Markup Language |
A language designed for the creation of web pages to be displayed in a web browser. |
| ISP |
Internet Service Provider |
Business or organization that offers users access to the Internet and related services (like email). |
| JPEG |
Joint Photographic Experts Group |
Pronounced jaypeg – A commonly used standard method of glossy compression for photographic images, used extensively on the World Wide Web. |
| LAN |
Local Area Network |
Computer network covering a small local area, like a home, office, or small group of buildings (college or business). |
| PDF |
Portable Document Format |
An open standard file format, proprietary to Adobe Systems, for representing two dimensional documents in a device independent and resolution independent format. |
| PIN |
Personal Identification Number |
A secret (often a 4-digit number or letter code) shared between a user and a system that can be used to authenticate the user to the system. |
| SEO |
Search Engine Optimization |
Set of methods aimed at improving the ranking of a website in search engine listings. |
| UPC |
Universal Product Code |
One of a wide variety of bar code languages. The UPC was the original barcode widely used in the United States and Canada for items in stores. |
| URL |
Uniform Resource Locater |
a string of characters conforming to a standardized format, which refers to a resource on the Internet (such as a document or an image) by its location. For example, the URL for the home page of this web site is http://www.credit-to-cash-advisor.com. |
| WAN |
Wide Area Network |
Computer network covering a wide geographical area, involving multiple arrays of computers. |
| WWW |
World Wide Web |
Global, read-write information space. Often mistakenly used as a synonym for the Internet itself, but the Web is actually something that is available over the Internet, just like e-mail and many other Internet services. |
| WYSIWYG |
What You See Is What You Get |
Prounced whissywig -- used in computer software to describe a system in which content during editing appears very similar to the final product. It is commonly used for word processing programs, but has other applications. |
Aficionados of chat, blogging, text messaging etc. have developed a new language of abbreviations. If you’re just a casual visitor, you may have trouble translating much into understandable English. Here are just a very few of the commonly used acronyms.
| AYPI? |
And your point is? |
B4 |
Before |
| BCnU |
Be seeing you |
BG |
Big Grin |
| BTDT |
Been there done that |
C&G |
Chuckle and grin |
| CUL8R |
See you later |
F2F |
Face to face |
| GR8 |
Great |
H&K |
Hug and kiss |
| HHJK |
Ha Ha Just Kidding |
HILIACACLO |
Help, I lapsed into a coma and can't log off |
| L8R G8R |
Later Gator |
LOL |
Laughing out loud |
| NE1 |
Anyone |
OBTW |
Oh, by the way |
| PAQ |
Parents are watching |
QT |
Cutie |
| ?4U |
Question for you |
TU |
Thank you |
Abbreviations, Acronyms and Symbols at Export911.com: An alphabetical list of symbols, acronyms and abbreviations commonly used in international business.
An Amusing Glance at the World of Acronyms: Humorous article by writer D. Chandramouli.
CorporateInformation.com: A list of some of the company extensions utilized throughout the world.
Incoterms 2000 Chart of Responsibility: Chart provided by the International Business Institute that summarizes the responsibilities of both the buyer and seller for each of the current 13 INCOTERMS.
List of company name etymologies, Wikipedia: Explanation of the origins of many well-known corporate names.
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This information is provided by ABC-Amega Inc.
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