A CNAME record, short for canonical name, is a DNS record that makes one name an alias of another. Instead of pointing www.yourbusiness.co.uk at a fixed server address, a CNAME can point it at a name the hosting provider controls, and the provider can then move its servers without you changing anything.
How it is used
The most common use is www: hosts such as Vercel, Netlify, Shopify and Squarespace ask you to add a CNAME for www pointing at a name they give you. CNAMEs are also used for subdomains like shop or book, and by email services for DKIM keys and settings lookups.
A CNAME cannot sit alongside any other record with the same name. That is why the bare domain usually uses an A record instead: the bare domain also carries email records, and a CNAME there would clash with them.
Why it matters to a business
When a website moves, the www CNAME is one of the records that changes. When email is set up with Microsoft 365 or Google Workspace, the provider may ask for CNAMEs too, and those must be left in place when the website moves. Before editing a CNAME, check what it is for; the name usually tells you.