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OBJECTIVES

The intended results or the intended outcomes. Those GOALS to be achieved or striven for.

OBLIGATION

A debt, note or lien payable; anything that is owed to others; a binding contract; a promise to pay; indebted.

OBSOLESCENCE

A product that is no longer usable due to replacement by newer or better products, accompanied by a decline in value.

OCEAN BILL OF LADING

A contract for goods to be exported that is issued to a transportation company (a SHIPPER), listing the goods shipped, acknowledging their receipt and promising delivery to the person or business named.

OCCUPANCY PERMIT

An authorization issued by the appropriate government body to establish a property as suitable for business use and meeting certain health and safety standards.

OCCURRENCE

In insurance, a method for determining whether or not insurance coverage is available for a specific claim. A claim is paid if the event occurred during the policy period regardless when the business submits the claim. See also CLAIMS MADE FORM.

OCCURRENCE FORM

In insurance, a method for determining whether or not insurance coverage is available for a specific claim. A claim is paid if the event occurred during the policy period regardless when the business submits the claim. See also CLAIMS MADE FORM.

OEM

Original Equipment Manufacturer; as opposed to an AFTERMARKET supplier.

OFF-BALANCE SHEET FINANCING

Debt-like resources that, by their nature, do not show on the balance sheet, i.e., a long-term noncancellable operating lease.

OFF-BUDGET

DISCRETIONARY FUNDS; money that is permitted to be spent without specific budget allocation in advance.

OFFER

A public or private notice to sell; a manifestation of the intent to enter into an agreement. A promise initiated by one party (a PROPOSAL) to act or perform in a specified manner provided the other party acts in the manner requested after a contract is consummated under the conditions requested. An offer demonstrates willingness by the party who wishes to perform the work to enter into a contract with the party who wants the work done; an offer to sell. See BID; PROPOSAL.

OFFER AND ACCEPTANCE

The two components of a valid contract; a meeting of the minds; an agreement to transact business. See OFFER; ACCEPTANCE.

OFFICE

An enclosed place within a building used primarily for the conduct of business, particularly administrative and clerical work. As opposed to a factory. The job of an officer; see OFFICER. Also, the job of an elected official, such as election to the office of mayor.

OFFICER

A top-level executive of a company; one who is invited to attend meetings of the board of directors.

OFFICE SUPPLY STORE

A retail business whose entire operation is offering business forms, materials, stock and equipment for sale to other businesses.

OFFSHORE

A business outside the United States that is owned by United States citizens or corporations. Often such businesses have been located outside of the United States to benefit from low labor costs or to avoid U.S. taxes or regulations.

OFFSHORE FINANCING

Raising money from outside the borders of the U.S.

OIL THE SQUEAKING WHEEL

A popular description of management, suggesting that it responds to the loudest voice of the moment rather than following a carefully planned set of objectives.

OJT

An acronym for On-the-Job Training; an informal method of learning job skills.

OLD ACCOUNTS

ACCOUNTS on which activity has not occurred for a considerable period of time. Most often, customer credit accounts that are uncollectible or approaching the point of not being collectible.

OLIGOPOLY

A market situation in which a small number of sellers control the market supply of a product or service, and therefore the seller is able to control the market price. A market situation not like PERFECT COMPETITION or like a MONOPOLY. See also OLIGOPSONY.

OLIGOPSONY

A market situation in which a few large buyers control the purchasing power for a product or service, and therefore the buyers are able to drive down the market price. See also OLIGOPOLY.

ONE-WRITE SYSTEM

A standardized bookkeeping method wherein only one entry is made to record each transaction. As opposed to DOUBLE-ENTRY bookkeeping.

ON HAND

Those things that are on the business premises; those that are in the possession of the business, such as cash on deposit in a bank.

ON-LINE

A communication channel that is readily accessible for retrieval of information, such as a telephone line connection to a main frame computer on which data are stored for downloading to a personal computer.

OPEN

The status of an order to buy, sell or transact (an open order) that has not been executed or completed. To establish (open) an account or (open) a line of credit. A loan that has an unpaid (open) balance.

OPEN ACCOUNT

An account with another business; a commercial account. Open account means regular trading and transactions with the other business on credit wherein payment is made at a later date. As opposed to CHARGE ACCOUNT for a person. See ACCOUNT. Also, refers to accounts with other businesses on which money is owed and now due, and to initiate action to begin doing business using an account at that business.

OPEN AN ACCOUNT

To establish a relationship with another business involving trust and cooperative financial transaction of business, such as to set up a bank checking account or to set up a credit account with another business either as a buyer or as a seller. See also ACCOUNT; OPEN ACCOUNT.

OPEN ORDER

An ORDER for goods or services that has not been filled by the supplier or canceled by the purchaser.

OPEN SHOP

A location or company where union membership is not a requirement for employment even if a union is present.

OPERATING BUDGET

An itemized statement of income, expenses, debt service and cash flow during a future period; a projection of the profitability of a business. See BUDGET.

OPERATING COSTS

Same as OPERATING EXPENSES.

OPERATING EXPENSES

The cost of doing business over a period of time. On an INCOME STATEMENT, the expenses which must be met no matter what level of sales has occurred, i.e., rent, utilities, maintenance, administrative and clerical. Operating expenses are fixed expenses and overhead expenses, as opposed to cost of goods sold and other variable expenses. See OVERHEAD; OVERHEAD EXPENSES; INDIRECT COSTS.

OPERATING RATIO

Any of several relationships among expenses arising from business activities, usually expressed as a percent and used for comparative purposes.

OPERATING STATEMENT

Same as INCOME STATEMENT; PROFIT & LOSS STATEMENT. See INCOME STATEMENT.

OPERATIONAL HEALTH AND SAFETY ADMINISTRATION (OSHA)

A federal government agency responsible for promulgating and enforcing occupational safety and health standards and regulations.

OPPORTUNITY COST

The present value of the income that could be earned from using an asset in its best alternative use rather than its current use. Also, the amount of income that is lost by the current use of an asset compared to another or better use of the asset.

ORDER

In business, a request to buy, sell, deliver, or receive goods or services that commits the issuer of the order to the terms specified. Also, direction to an employee to perform certain tasks in the conduct of business. In banking, a payee’s request to the maker, as on a check, “Pay to the order of______.” In law, a direction from a court of jurisdiction or a regulation.

ORDINANCES

The rules, regulations and codes enacted into LAW by local governing bodies. See LAW.

ORDINARY AND NECESSARY BUSINESS EXPENSE

An expense incurred through the normal course of business, such as rent, supplies and utilities, as opposed to expenses for a specific project or a new venture. Under federal income tax law, ordinary and necessary business expenses may be deducted in the year incurred rather than capitalized and spread over several years.

ORGANIZATION

In a business start-up, the job of accomplishing the collective tasks needed to get the business into full operation in the intended manner. These include business planning, business structuring, financing, marketing, finding suppliers and selecting people for the various jobs. In business management, the collective relationship of all supervisors and subordinates that defines the authority and responsibility chain of command. See ORGANIZATION CHART.

ORGANIZATIONAL EXPENSES

The cost incurred for incorporation of a corporation or syndication of a partnership prior to operation as a business entity. These expenses may include legal fees, the cost of raising money, accounting fees, design, research and patenting. Also called START-UP COSTS.

ORGANIZATION CHART

A pictorial display of the relationship of supervisors and subordinates; headed by the chief officer or owner.

ORGANIZE

In general, to arrange in an orderly way or to bring into being; establish. In a business start-up, to perform all the preliminary tasks and functions so that the business can begin operation in the intended manner. Relating to business management, to arrange a hierarchy of the chain of command from the owner(s) down to the workers. See ORGANIZATION; ORGANIZATION CHART. In relation to labor unions, the activities undertaken to formulate and begin a labor union.

OSHA

See OPERATIONAL HEALTH AND SAFETY ADMINISTRATION.

OTC

See OVER-THE-COUNTER.

OUTLAY

To spend, usually for a large purchase such as a fixed asset. See EXPENDITURE.

OUTSIDE DIRECTORS

Members of a BOARD OF DIRECTORS who are elected from the business community at large. See BOARD OF DIRECTORS.

OUTSIDE MANAGEMENT

A management consultant or other experienced nonmember of the firm who is invited in to make analyses of operations and recommendations for improvement.

OUTSOURCE

To purchase; procure. Most often outsource is used when a product or service task has previously been accomplished within the company (an inside source) but is now being purchased or is being considered for purchase from another company (an outside source).

OUTSTANDING

In accounting, the amount of unpaid debts and obligations. A document, such as a check or draft, that has not been presented for payment. Also called OUTSTANDING BALANCE. Concerning shares of stock authorized by a corporation, see ISSUED AND OUTSTANDING. Any action that is authorized but all activities concerning the action are not yet complete.

OUTSTANDING BALANCE

An amount of a loan that remains to be paid; a note on which there is still a liability.

OUTSTANDING CHECK

A check or draft that was written but has not been presented to the bank for payment.

OVERADVANCE

A method of financing by a FACTOR who makes loans in anticipation of sales. As an example, cash is advanced by the factor to a firm to permit inventory build-up prior to peak selling periods. The security for the loan is the anticipated accounts receivable. See FACTORING.

OVERAGE

A quantity received in excess of the amount ordered; an amount of money received in excess of the amount due; an amount produced that exceeds the selling order amount. In finance, an expenditure in excess of the amount budgeted. In retail store leases, an amount of rent payable in excess of the base amount. That is, a percent of the store selling volume in excess of a base sales volume.

OVERHEAD

In a business, the expenses and costs that are not directly associated with the production or sale of goods and services. The normal costs of being in business, such as office, rent, utilities, insurance, advertising, accounting and legal expenses. As opposed to the COST OF GOODS SOLD that directly relate to the products or services for sale. Also called INDIRECT COSTS; BURDEN, OVERHEAD COST, OPERATING EXPENSES. OVERHEAD COST See OVERHEAD.

OVER-THE-COUNTER (OTC)

A security that is not listed or traded on an organized stock exchange. Over-the-counter stocks are traditionally those of smaller and emerging companies. Trading is often accomplished through NASDAQ.

OVERTIME

Work by an employee done after the regular work time. Usually more than eight hours per day or 40 hours per week.

OVERTIME HOURS

The number of hours worked by an employee after the regular work period.

OWN

Belonging, relating or peculiar to oneself. To hold title to a property or be in control of a sole proprietorship.

OWNER

The person who owns property or a business entity. In business, the owner is usually the person in control of a sole proprietorship or the person who owns more than 50% of a corporation or a partnership. In property, the one who holds title.

OWNER/MANAGER

One who operates his or her own business.

OWNER’S EQUITY

See EQUITY, NET WORTH.

OWNERSHIP

The provision by which a person or business holds legal title to property or is in control of a sole proprietorship.

 

All definitions were taken from www.small-business-dictionary.org.