Acronyms are common abbreviations used in the business world for forms like invoices, bills, and contract terms. If you have no idea what an IC is or how to fill out an I/O, don’t sweat it- we’re here to answer all the questions you’re afraid to ask! In this guide we explain common acronyms used in common business receipts, forms, and contract terms so that you can decipher the forms you have currently, and use these acronyms confidently in future transactions. Strengthen your business by saving time and effort and eliminate frustration caused by misunderstandings of cryptic acronyms.
Invoices, bills, and contract terms have their own terminology. If you’re unfamiliar with the terms and conditions being asked of you, it could be very detrimental to your business’ health. Taking the time to get to know what each section involves can help you achieve more quickly.
Here’s the meaning behind common invoice, bill and contract acronyms:
- C/O stands for Care/Of. C/O can be used on invoices, bills, and contract terms. It alludes to who needs to be addressed in the document. For example, if an invoice is for a company, you can put C/O to have it sent to a specific person like the head of the accounting department.
- CFO stands for Cancel Former Order. To CFO is to cancel out an order that was previously placed and/or billed for.
- COD stands for Cash on Delivery. COD is a billing term that requires payment when an item is delivered.
- CR stands for Credit. A credit in billing terms can refer to the decreasing an expense account or increasing a capital, liability, or revenue account. A credit in invoicing terms can be the same or it can refer to an agreement where goods and services are exchanged against a promise to pay.
- DFI stands for Discount for Invoice. A DFI is a way for businesses to draw loans from outstanding invoices. They do not have to relinquish administrative control of the invoices but will make payments with interest and fees to an invoice discounting company.
- DR stands for Debit. A DR stands for money owed. It’s a billing term that is used often.
- ETA stands for Estimated Time of Arrival. ETA is a term that is often used in contracts to state when a project is due.
- FOC stands for Free of Charge. FOC on an invoice, bill or contract refers to something not requiring payment. It’s known as a freebie.
- I/O stands for Invoice/Order. An I/O is something that businesses and ICs use to request payment and to keep track of products sold and services rendered.
- IC stands for Independent Contractor. An IC is a person that is hired by a company not as a paid employee but as someone who performs a service for them for a specific amount of time.
- NDA stands for Non-Disclosure Agreement. A NDA is typically used in contracts with IC, vendors, and other businesses. It prevents sensitive information from being shared with others. It’s essentially how businesses keep their operations secretive.
- POP stands for Point of Purchase. POP is a place where sales are made. It is referred to in many contracts.
- TAX stands for Tax and Expenditures. Tax is tacked onto bills and invoices. You’ll see it on both. It’s based on a percentage rate.
If you run into some less common acronyms, don’t worry! There are a number of different websites that you can use to familiarize yourself with acronyms. AllAcronyms.com is one that you can reference. TheFreeDictionary.com even dedicates a whole section of its website to abbreviations and acronyms.
Now that you have a better understanding of common invoice, billing, and contract acronyms, you’ll have an easier time creating your own and you’ll spend much less time agonizing over the secret meaning of dozens of acronyms! With your new free time, maybe this would be a great opportunity to redesign your invoices to encourage on time payment! Every bit of new knowledge you obtain gives you a distinct advantage in the business world.