Bill of Exchange
Definition
A written, signed order by one party directing another to pay a fixed sum to a third on demand or at a set future date. It is a negotiable instrument used to formalise and transfer trade credit.
Related Terms in Business Terms
Promissory Note
A written promise by one party to pay a definite sum to another on demand or at a specified date. Unlike a bill of exchange it is made by the payer rather than ordering a third party to pay.
MRR (Monthly Recurring Revenue)
The predictable revenue a subscription business earns each month. Calculated by multiplying the number of paying customers by the average revenue per user (ARPU). Key SaaS metric.
ARR (Annual Recurring Revenue)
The annualized version of MRR (MRR x 12). Used by SaaS companies to measure predictable yearly revenue. A key metric for valuation and growth tracking.
Burn Rate
The rate at which a company spends cash, typically measured monthly. Gross burn is total monthly spending. Net burn is spending minus revenue. Used to calculate runway (cash / net burn = months of runway).
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