What is business-background memorandum?
A short narrative that accompanies the source documents and gives the AI sufficient context to interpret them accurately, covering the company's history, ownership, business model, revenue sources, compensation and financing arrangements, accounting policies, and known issues. It is essential because accounting cannot be determined from transaction descriptions alone.
Where you will use it: this term comes up in the Applied AI for Finance and Accounting course, and the full course glossary collects every term in one place.
Related terms
From the free Applied AI for Finance and Accounting course by Devon Coombs, CPA, MBA.