Glossary terms starting with O

Occurrence Policy

An occurrence policy covers incidents that occur during the policy period, regardless of when the claim is reported.

OCR Receipt Capture

OCR (Optical Character Recognition) receipt capture uses image recognition technology to extract expense information from photographed receipts, automatically populating expense reports with vendor, amount, date, and category.

Operating Activities

Operating activities are the primary revenue-generating activities of a business.

Operating Agreement

An operating agreement is the document that sets out how a limited liability company is owned and run.

Operating Budget

An operating budget is a financial plan projecting revenues and expenses for a specific period, typically one year.

Operating Cash Flow Ratio

The operating cash flow ratio measures whether a company generates enough cash from operations to cover its current liabilities.

Operating Efficiency Ratio

Operating efficiency ratio measures operating expenses as a percentage of revenue, indicating how efficiently the firm converts revenue into operating income.

Operating expenses

Operating expenses are the indirect costs of running a business that aren't directly tied to service delivery.

Operating income

Operating income is the profit generated from core business operations, calculated as gross profit minus operating expenses.

Operating Margin

Operating MarginMargin is the percentage of revenue remaining after deducting operating expenses but before interest and taxes.

Operating Reserve

Operating reserve is a formal policy that establishes minimum cash levels a consulting firm maintains to ensure business continuity.

Origination Credit

Origination credit is recognition given to the professional who brings in a new client or matter.

Outside Basis

Outside basis is a partner's tax basis in their partnership interest.

Outside Counsel Guidelines

Outside counsel guidelines are the rules a client sets for the law firms it hires.

Overhead

Overhead represents all business costs not directly tied to delivering services to clients.

Overhead Allocation

Overhead allocation is the practice of assigning shared overhead costs, such as rent, administration, and general software, to projects, clients, or service lines using a consistent driver, such as labor hours.

Overhead Rate

An overhead rate is the amount of overhead assigned to each unit of an activity, such as each direct labor hour.

Overhead Recovery Rate

Overhead recovery rate measures how well client billings cover firm overhead costs, calculated by comparing overhead allocated to projects against actual overhead expenses.

Overpayment Recovery

Overpayment recovery is the process of reclaiming money paid in excess of what was owed.

Overtime Calculation

Overtime calculation is the process of working out extra pay for hours worked beyond a set threshold, using the employee's regular rate and a premium multiplier.

Overtime Pay

Overtime pay is the premium compensation required when non-exempt employees work more than 40 hours in a workweek.

Owner Contribution

An owner contribution is money or property an owner puts into the business.

Owner Draw

An owner draw is money taken out of the business by an owner for personal use.

Owner's Equity

Owner's equity represents the owner's residual interest in business assets after deducting liabilities, calculated as total assets minus total liabilities.