Files for cut vinyl must be in a vector format with any text converted to outlines. When possible, size the image to the exact dimensions of the sign you would like quoted. Additionally, all banner files should not use any stroke or outline widths to create an image.
Vector art is key for printing. Since the art is made from a series of mathematical curves it will print smoothly even when resized. For instance, you can print a vector logo on a small sheet of copy paper and enlarge the same vector logo to billboard size and retain quality. A low-resolution bitmap or raster graphic would blur or pixelate excessively if it were enlarged from business card size to billboard size.
One example of vector graphics format is SVG (Scalable Vector Graphics), an open standard created and developed by the World Wide Web Consortium to address the need (and attempts of several corporations) for a versatile, scriptable and all-purpose vector format for the web and otherwise. Another example is VML, a proposed standard that was adopted by Microsoft. Arguably, the AI format, the native format for Adobe Illustrator, is also standard in vector graphics.