x

What Does 'MM' Mean in Accounting?

by Fraser Sherman ; Updated March 03, 2019
Businessman working with documents in the office

In accounting speak, a written "MM" means a million, whether the accountant is referring to units, dollars, euros or shares. Rather than writing $400,000,000 or $400 million, the accountant can use the MM abbreviation and write $400MM instead. You have to be careful when using it or interpreting it because MM can stand for other things too.

Tips

  • MM is shorthand for writing "million," as in 45MM meaning 45,000,000. It derives from Roman numerals.

M vs. MM Abbreviation

Accounting's use of M and MM is based on the old Roman system, where letters are substituted for numerals:

  • I for one
  • II for two
  • V for five
  • X for 10
  • L for 50
  • C for 100
  • D for 500
  • M for 1,000

Logically, M as an accounting abbreviation means 1,000. In internet record keeping, for instance, CPM is the cost per thousand impressions of an internet ad.

M With a Bar

In Roman numerals, a million is M with a horizontal bar over the letter. A horizontal bar over any Roman numeral multiplies its value by 1,000: C becomes 100,000, X becomes 10,000 and M with a bar becomes 1,000 times 1,000, or 1 million.

We don't know for sure why the Romans used letters or why they chose the letters they did. One theory says the use of M was because Romans measured a mile as a thousand paces. Another theory is that it is a miswriting of the Greek letter phi.

The barred M was necessary because the Romans didn't use zero, and they didn't like using more than three identical letters in a row. If you can't go above three M's in a row, you can't get to 4,000, which would be MMMM. The bar solved the problem.

Video of the Day

Brought to you by Techwalla
Brought to you by Techwalla

Using the MM Abbreviation

Rather than use the barred M, however, accounting went with MM as an abbreviation for a million. For example, 1MM equals 1 million, $34MM equals $34 million and so on.

Using M or MM is pretty simple. If the company sells 26,000 units, the accountant can record that as 26M units. If net income runs to $6,500,000, it goes on the books as $6.5MM. The MM abbreviation works whether the entry is in dollars, some other currency or millions of items or customers.

While you can make MM stand for millions of anything, it's important that the reader knows whether you're talking about dollars, euros, units shipped, etc. If, say, you use it for both units and dollars in the same document, separate the different categories so your readers don't get confused.

Alternative Approaches

If a financial statement has a lot of large figures, the accountant may simply dispense with abbreviations. Stating at the top of the report that "all figures are in millions of dollars" should take care of it. Both approaches are allowed under standard accounting rules. What matters is that readers look at the figures and understand the amounts.

There are also other options besides using MM as an abbreviation for a million. Instead of writing $36,000,000 as $36 MM, for example, you can go with:

  • $36 million
  • $36M
  • $36 MN

It's also common to see K used for 1,000 and B for a billion. To avoid confusion, use any and all abbreviations consistently throughout all your financial records.

MM Means Other Things

Like most simple abbreviations, MM stands for a number of things in the business world other than millions:

  • Materials management
  • Marketing manager
  • Manufacturing methods
  • Memorandum
  • Man month
  • Manufacturing methods

If you think there's any possibility of your use of MM being confusing or being misinterpreted, you're safer writing out the numbers or using "millions."

About the Author

Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com

Photo Credits

  • opolja/iStock/Getty Images
Cite this Article A tool to create a citation to reference this article Cite this Article