As we get ready to begin a new calendar year, it’s a good time for farriers to review their business practices and how they can improve their business performance.

One goal you can set for yourself is to better understand business terminology. Why bother? It will help you better understand reports you get from accountants, attorneys and other professionals you may use. If your clients have a business background, speaking the same language will help you better communicate with them when it comes time to explain a necessary price increase, or a bill for a complicated procedure.

Here are 40 terms you will benefit from understanding.

Accounts Payable — Are bills to be paid as part of the normal course of business. Until the invoice is paid, the amount due is known as an accounts payable.

Accounts Receivable (AR) — Debt or money owed to you from sales of products or services, such as hoof-care work or products.

Accrual-Based Accounting — A type of business accounting method, which assumes there will be bills to be paid (known as accounts payable) and/or sales made that will be paid later (known as sales on credit). You report income when it is earned. The opposite is the cash-basis accounting method.

Assets — Property of your farrier business, including cash, inventory, equipment, etc. Assets are any possessions that have value in an exchange or trade. The IRS defines assets, as they relate to taxes when you buy a piece of equipment. If you call…