Home Glossary
The AI terms, in plain English.
BAA, SSO, tokens, prompt injection: what each one means for your business, in a sentence or two.
01Plans and billing
- Seat
- One person's license, billed per month. Business AI plans are priced per seat; Claude Enterprise adds usage on top.
- More in Which AI to buy
- Business plan
- A plan the company buys, with an admin console, single sign-on and terms that keep your data out of model training. Claude Team and Enterprise, ChatGPT Business, Microsoft 365 Copilot.
- More in Which AI to buy
- Personal plan
- Free, Pro or Plus, bought by one person. Training on chats is that person's setting, and the company can't see or delete what was shared. Never for client data.
- More in Security
- Token
- The unit AI use is measured and billed in. A token is about three-quarters of a word; a page of text is roughly 800 tokens.
- More in Models and prices
- Usage-based billing
- Paying for what is used instead of a flat seat. Claude Enterprise bills usage at API rates on top of its $20 seat.
- More in Team or Enterprise
- Copilot Credits
- Microsoft's meter for agent features beyond Copilot chat, about a cent each, with caps the admin sets. Since November 2026 they also pay for AI steps in Power Automate.
- More in Automation
- Usage limit
- How much one seat can do before it slows or pauses. Claude Team works in 5-hour allowances; limits differ by plan and model.
- More in Which AI to buy
- Model
- The engine behind an assistant. Each vendor offers a fast one, an everyday one and one for hard problems; Claude's are Haiku, Sonnet and Opus.
- More in Models and prices
- API
- A way for your own software to call a model directly, paid per token instead of per seat. Custom tools and n8n workflows use Claude this way.
02Data and privacy
- Training on your data
- Using your chats to improve future models. Business plans from Anthropic, OpenAI and Microsoft don't by default; personal plans may unless the person turns it off.
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- Data retention
- How long the vendor keeps chats and files. Enterprise plans let an admin set it; smaller plans keep the vendor's default.
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- Zero data retention
- An arrangement, mostly for API use, where the vendor doesn't store prompts or answers after responding. Approved by the vendor case by case.
- BAA
- Business associate agreement: the HIPAA contract a vendor signs before it may handle patient information. No BAA, no patient data. Claude Enterprise, ChatGPT Enterprise and Microsoft 365 sign one; Claude Team and ChatGPT Business don't.
- More in Security
- Audit log
- A record of who did what, which an admin can export for an examiner or peer reviewer. Part of Enterprise plans, not Team or Business.
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- Data loss prevention (DLP)
- Rules that warn or block when sensitive data, like Social Security or account numbers, is pasted, shared or emailed. In Microsoft 365 it lives in Purview.
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- Sensitivity label
- A tag such as Confidential on a file, set in Microsoft Purview. Copilot respects the label and the file's permissions.
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- Shadow AI
- Staff using personal AI accounts for work without approval. The most common real risk, fixed mainly by giving everyone a business plan.
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- Prompt injection
- Hidden instructions in an email, document or web page that try to make an AI do something its user didn't ask, like forwarding files. The main risk for AI that reads mail or browses.
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- Hallucination
- A confident answer that is wrong, such as an invented citation or figure. The reason a person checks anything that leaves the building.
03Sign-in and access
- Single sign-on (SSO)
- Staff log in with their company Microsoft or Google account. When someone leaves, turning off that one account closes everything.
- More in Setup checklists
- Multi-factor authentication (MFA)
- A second proof at sign-in, like an app prompt, beyond the password. The FTC Safeguards Rule requires it for tax preparers.
- More in Security
- SCIM
- Automatic account setup and removal: add or remove someone in Microsoft Entra or Google, and their AI seat follows. Part of Enterprise plans.
- More in Team or Enterprise
- Microsoft Entra ID
- Microsoft's sign-in system for Microsoft 365, formerly Azure Active Directory. Most firms' SSO and MFA run through it.
- Least privilege
- Everyone can open only what their job needs. It matters more with AI: Copilot can find any file a person can open, including ones shared too widely.
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04Rules and standards
- SOC 2 Type II
- An independent auditor's report on a vendor's security controls over several months. Ask any AI vendor for it before client data goes in.
- More in Security
- FTC Safeguards Rule
- The federal rule requiring a written security program, MFA and encryption at financial businesses, including tax preparers of every size.
- More in Tax practices
- WISP
- Written information security plan, the document the Safeguards Rule requires. IRS Publication 5708 is a template; add a section on AI tools.
- More in Tax practices
- Section 7216
- The tax code section limiting how preparers use and disclose return information. Check how an AI vendor fits it before returns go in.
- More in Tax practices
- SQMS No. 1
- The AICPA quality management standard, in effect since December 15, 2025. AI tools belong in the firm's risk assessment and yearly evaluation.
- More in Accounting firms
- NAIC AI bulletin
- Insurance regulators' model guidance on AI: a written program, governance and vendor oversight. Iowa adopted it in Bulletin 24-04; Minnesota had not as of November 2026.
- More in Insurance agencies
05How AI works
- Agent
- AI that carries out several steps on its own with tools, such as searching files, filling a form or drafting replies, instead of answering once.
- Connector
- A built-in link that lets an assistant read from another app, like SharePoint, Google Drive or Slack, with that person's permissions.
- MCP
- Model Context Protocol: an open standard for plugging AI assistants into tools and data. Started by Anthropic, now supported by OpenAI and Microsoft.
- Grounding
- Answering from your own documents: the assistant finds the relevant passages first and cites them. It cuts hallucination; it doesn't remove it.
- Project
- A saved space in Claude or ChatGPT holding the instructions and files for a recurring job, so nobody explains it again each time.
- Context window
- How much a model can read at once. Claude takes about 1,250 pages, ChatGPT Business about 320; past that, earlier material drops out.
- More in Which AI to buy
- Human in the loop
- A person reviews and approves before AI output reaches a client or changes a record. Our default for anything that leaves the building.
06Automation and hosting
- Flow
- Power Automate's word for an automation: a trigger, like an email arriving, and the steps that follow. n8n calls it a workflow.
- More in Automation
- Self-hosting
- Running software on your own server or cloud account instead of the vendor's. More control, and someone has to keep it updated and backed up.
- More in Hosting
- Cloudflare Access
- A company login in front of an internal app or dashboard, so only your people get in. Free for up to 50 users.
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Rather talk it through?
Book a call. Caleb will point you to the right plan and the first project for your business.