Knowledge base

The finance glossary, without the jargon

245 terms a mid-market finance team actually uses, each defined in one or two sentences. Where finance teams genuinely disagree about a definition, the entry says so , because a metric only means something once you know whose definition it uses.

245 terms Plain English Updated 2026

A

Absorption Costing

Accounting

Allocating both variable and fixed production costs to units produced, so unsold inventory carries a share of fixed overhead.

Accounts Payable (AP)

Accounting

Amounts owed to suppliers for goods or services already received but not yet paid.

Accounts Receivable (AR)

Accounting

Amounts owed by customers for goods or services already delivered but not yet collected.

Accrual Accounting

Accounting

Recognising revenue when earned and expenses when incurred, regardless of when cash moves. The reason profit and cash flow diverge.

Accrual-to-Cash Bridge

FP&A

A reconciliation explaining why reported profit differs from cash generated in the same period.

Accrued Expense

Accounting

A cost incurred but not yet invoiced or paid, recognised in the period it relates to.

Accrued Revenue

Accounting

Revenue earned but not yet invoiced, recognised in the period the work was performed.

Activity-Based Costing

Accounting

Assigning overhead to products or services based on the activities that actually drive the cost, rather than a blanket allocation.

Ad-Hoc Analysis

FP&A

A financial question that was not already on a report and requires building something new to answer. It is the majority of real analytical work and the hardest to staff for, because the volume is unpredictable.

Agentic AI

AI & Automation

AI systems that plan and execute multi-step work toward a goal, rather than responding to a single prompt in isolation.

Aging Report

Cash & Treasury

A listing of outstanding receivables or payables grouped by how long they have been outstanding.

Allocation

FP&A

Distributing a shared cost across departments or products using a defined basis, which makes departmental profitability sensitive to a methodological choice.

Allowance for Doubtful Accounts

Accounting

A provision against receivables expected to prove uncollectable, reducing reported AR to a realistic value.

Amortisation

Accounting

Spreading the cost of an intangible asset across its useful life, the intangible equivalent of depreciation.

Annual Contract Value (ACV)

SaaS Metrics

The annualised value of a customer contract, excluding one-time fees.

Annual Operating Plan (AOP)

FP&A

The approved financial plan for a fiscal year, covering revenue, costs, headcount, and capital spend. It becomes the baseline every subsequent variance is measured against.

Annual Recurring Revenue (ARR)

SaaS Metrics

Monthly recurring revenue multiplied by twelve. Should exclude services and any revenue not contractually recurring.

Annual Run Rate

SaaS Metrics

The most recent month or quarter extrapolated to a full year. Distinct from contracted ARR and frequently confused with it.

Anomaly Detection

AI & Automation

Automatically identifying values that deviate from an expected pattern, so exceptions surface without someone reviewing every line.

API

Systems & Data

An interface that lets software systems exchange data programmatically, and the usual route for connecting finance systems without manual export.

Asset Turnover

Financial Analysis

Revenue divided by total assets: how much revenue each unit of asset base generates.

Attrition

SaaS Metrics

The rate at which customers or revenue are lost over time, used interchangeably with churn in most contexts.

Audit Trail

AI & Automation

A complete record of the steps, data, and logic behind a result, so any number can be traced to its source and verified.

Average Revenue Per User (ARPU)

SaaS Metrics

Total recurring revenue divided by the number of customers or users in the period.

B

Bad Debt

Cash & Treasury

Receivables judged uncollectable, provisioned against and eventually written off.

Balance Sheet

Accounting

A statement of assets, liabilities, and equity at a single point in time. Every ratio drawn from it is a snapshot and moves with period-end timing.

Bank Reconciliation

Cash & Treasury

Matching internal cash records against the bank statement to identify timing differences and errors.

Baseline

FP&A

The reference figures a forecast or variance is measured against, usually the approved budget, but sometimes the prior period or the last re-forecast.

Batch Processing

Systems & Data

Processing accumulated records on a schedule rather than continuously, which introduces a lag between an event and its visibility.

Benchmark

Financial Analysis

An external reference point for a metric. Useful for sanity-checking, unreliable as a target when the underlying definitions are undisclosed.

Billings

Accounting

The amount actually invoiced in a period, which differs from both bookings and revenue depending on invoicing schedule.

Board Pack

FP&A

The set of materials prepared for a board meeting, whose timing is constrained by how long close takes.

Bookings

Accounting

The total value of contracts signed in a period, regardless of when they are billed or recognised as revenue.

Bottom-Up Forecast

FP&A

A forecast built by aggregating detail from individual reps, accounts, or cost lines upward. More defensible than a top-down forecast but slower to produce and revise.

Break-Even Point

Financial Analysis

The volume at which total revenue equals total cost, calculated as fixed costs divided by contribution margin per unit.

Bridge

Financial Analysis

A visualisation that walks from one period's result to another, showing each driver's contribution to the change.

Budget

FP&A

A financial plan for a defined period, approved in advance and used as the control against which actual results are measured.

Budget Holder

FP&A

The person accountable for spend against a specific budget line.

Budget Variance

FP&A

The difference between actual and budgeted amounts, expressed in currency and as a percentage of budget. A variance identifies that something moved, not why.

Burn Multiple

SaaS Metrics

Net burn divided by net new ARR: how much cash is consumed to add a unit of recurring revenue. Below 1.5 is generally considered efficient.

Business Partnering

FP&A

Finance working directly with operating teams on decisions rather than only reporting results afterwards. The activity most often displaced when ad-hoc analysis consumes the team.

C

CAC Payback Period

SaaS Metrics

Fully-loaded acquisition cost divided by new monthly recurring revenue multiplied by gross margin, giving the months to recover the cost of winning a customer.

Capacity Planning

FP&A

Modelling whether current or planned headcount and infrastructure can support forecast demand, and when the next step increase is required.

Capacity Utilisation

Financial Analysis

The proportion of available capacity actually used, which drives whether fixed costs are being earned back.

Capital Expenditure (CapEx)

Accounting

Spend on assets expected to deliver value over several years, capitalised on the balance sheet rather than expensed immediately.

Capitalisation

Accounting

Recording a cost as an asset rather than an immediate expense, spreading its impact across future periods.

Cash Conversion Cycle

Cash & Treasury

Days sales outstanding plus days inventory outstanding minus days payable outstanding: how long cash is tied up in operations.

Cash Flow Forecast

Cash & Treasury

A projection of cash receipts and payments over a future period, typically thirteen weeks for operational use.

Cash Runway

Cash & Treasury

Available cash divided by average monthly net burn: the months until cash is exhausted at the current rate.

Cash Sweep

Cash & Treasury

Automatically moving surplus balances into a central account or to repay debt.

Change Data Capture

Systems & Data

Tracking and propagating only records that changed, rather than reloading an entire dataset.

Chart of Accounts

Accounting

The structured list of accounts used to classify every transaction. Its design determines what analysis is possible without manual rework.

Churn Rate

SaaS Metrics

The proportion of customers or revenue lost in a period. Logo churn and revenue churn diverge sharply when customer size varies.

Close

Accounting

The process of finalising the books for a period. Its duration sets the floor on how quickly any downstream analysis can happen.

Cohort

SaaS Metrics

A group of customers who started in the same period, tracked together over time so retention trends become visible.

Cohort Analysis

Financial Analysis

Tracking groups defined by a shared start period over time, which reveals trends that a blended average conceals.

Cohort Retention Curve

SaaS Metrics

Retention plotted against cohort age, whose flattening point identifies the genuinely retained base.

Collections

Cash & Treasury

The process of securing payment on outstanding receivables, and the single largest lever on operational cash timing.

Commitment

FP&A

Spend contractually agreed but not yet incurred, which a budget report based only on actuals will miss.

Committed ARR

SaaS Metrics

Recurring revenue under contract, including signed contracts that have not yet started. Distinct from live ARR.

Committed Cost

FP&A

Cost that cannot be avoided within the planning horizon because it is contractually locked.

Common-Size Analysis

Financial Analysis

Expressing every line as a percentage of a base, revenue or total assets, so companies of different sizes can be compared.

Company Knowledge Graph

AI & Automation

A structured representation of how a specific business works (metric definitions, targets, commission rules, seasonal patterns) that makes generic analysis specific to that company.

Concentration Risk

Financial Analysis

Exposure created when a large share of revenue, supply, or receivables depends on a small number of counterparties.

Confidence Calibration

AI & Automation

Whether a system's expressed certainty matches its actual accuracy. Poorly calibrated output is dangerous in finance because wrong answers arrive stated as confidently as right ones.

Context Window

AI & Automation

The amount of text a language model can consider at once. A hard limit on how much source data can be reasoned over in a single pass.

Continuous Monitoring

AI & Automation

Checking financial data against thresholds and targets on an ongoing basis rather than only at period close.

Continuous Planning

FP&A

Updating the plan on a rolling basis as conditions change, rather than only at the annual cycle. Requires a reporting process fast enough to keep up.

Contra Revenue

Accounting

Reductions to gross revenue such as discounts, refunds, and credits, reported separately to arrive at net revenue.

Contraction

SaaS Metrics

Revenue lost from existing customers who downgraded but did not leave.

Contribution Margin

Financial Analysis

Revenue minus variable costs: what each additional sale contributes toward fixed costs and profit.

Contribution per Head

Financial Analysis

Gross profit divided by headcount, a blunt but useful measure of whether the team is scaling efficiently.

Correlation

Financial Analysis

The degree to which two measures move together, which does not by itself establish that one causes the other.

Cost Centre

FP&A

An organisational unit that incurs cost without directly generating revenue, used to assign accountability for spend.

Cost of Goods Sold (COGS)

Accounting

The direct cost of producing or delivering what was sold. What belongs in it is a judgement that materially changes reported gross margin.

Cost per Unit

Financial Analysis

Total cost divided by units produced, whose movement separates efficiency changes from volume effects.

Covenant

Cash & Treasury

A condition in a lending agreement requiring the borrower to maintain specified financial ratios or behaviours.

Credit Facility

Cash & Treasury

An arranged borrowing line a company can draw on. Optionality rather than cash, and typically subject to covenants.

Current Ratio

Financial Analysis

Current assets divided by current liabilities, a broad measure of short-term liquidity.

Customer Acquisition Cost (CAC)

SaaS Metrics

Total sales and marketing spend divided by customers acquired. Fully-loaded CAC can be more than double the marketing-only figure.

Customer Lifetime Value (LTV)

SaaS Metrics

The margin-adjusted revenue expected from a customer over their lifetime. Should be capped at a realistic horizon, since the uncapped formula assumes churn holds forever.

Customer Relationship Management (CRM)

Systems & Data

The system recording customer and pipeline data, and the usual source of the bookings figures finance must reconcile to revenue.

Cut-Off

Accounting

The point separating one accounting period from the next. Cut-off differences are the usual explanation for reconciliations that do not tie.

Cut-Off Testing

Systems & Data

Checking that transactions near a period boundary are recorded in the correct period.

D

Data Dictionary

Systems & Data

Documentation defining each field's meaning, format, and source, without which analysis silently re-derives definitions.

Data Lineage

Systems & Data

The documented path a data point takes from source system through every transformation to final report.

Data Quality

Systems & Data

Whether data is complete, accurate, consistent, and current. It sets the ceiling on how reliable any analysis built on it can be.

Data Warehouse

Systems & Data

A central repository consolidating data from multiple systems into a consistent structure for analysis.

Days Inventory Outstanding (DIO)

Cash & Treasury

Average inventory divided by cost of goods sold, multiplied by days in the period: how long stock is held before sale.

Days Payable Outstanding (DPO)

Cash & Treasury

Average payables divided by cost of goods sold, multiplied by days in the period: how long the business takes to pay suppliers.

Days Sales Outstanding (DSO)

Cash & Treasury

Average receivables divided by revenue, multiplied by days in the period: how long collection takes on average.

Debt Ratio

Financial Analysis

Total debt divided by total assets, showing what share of the asset base is financed by borrowing.

Debt-to-Equity Ratio

Financial Analysis

Total debt divided by shareholders' equity, measuring how much of the business is financed by borrowing.

Decomposition

Financial Analysis

Breaking a change into its component causes (price, volume, mix, cost) which is what converts a variance into a decision.

Deduplication

Systems & Data

Identifying and merging records that represent the same real-world entity recorded more than once.

Deferred Revenue

Accounting

Cash collected for goods or services not yet delivered. A liability, not a performance measure, despite frequently being read as one.

Deferred Tax

Accounting

A tax liability or asset arising from timing differences between accounting profit and taxable profit.

Depreciation

Accounting

Spreading the cost of a tangible asset over its useful life. A non-cash charge that reduces profit without reducing cash.

Deterministic Calculation

AI & Automation

A calculation that produces the same result every time from the same inputs, executed as code rather than generated as text.

Dimension

Systems & Data

An attribute used to slice a measure (department, region, product, customer) determining what analysis is possible.

Discretionary Spend

FP&A

Cost that can be reduced at short notice without breaching a contract, and the first lever in a downside plan.

Double-Entry Bookkeeping

Accounting

Recording every transaction as equal and opposite debits and credits, so the accounting equation always balances.

Downgrade

SaaS Metrics

A reduction in a customer's contracted value without full cancellation, recorded as contraction rather than churn.

Driver-Based Planning

FP&A

Building a forecast from the operational drivers that cause financial outcomes (headcount, units, conversion rates) rather than extrapolating prior financial results.

Dunning

Cash & Treasury

The structured sequence of reminders sent to customers with overdue balances.

E

EBIT

Accounting

Earnings before interest and taxes: operating profitability before financing and tax structure.

EBITDA

Accounting

Earnings before interest, taxes, depreciation, and amortisation. A rough proxy for operating cash generation, and one whose adjustments vary widely between companies.

Elasticity

Financial Analysis

How much demand changes in response to a change in price.

Enterprise Resource Planning (ERP)

Systems & Data

The system of record for financial and operational transactions, and the primary data source for financial analysis.

ETL

Systems & Data

Extract, transform, load: the process of moving data from source systems into an analytical store.

Expansion Rate

SaaS Metrics

Expansion revenue as a percentage of starting revenue for a cohort, isolating upsell performance from churn.

Expansion Revenue

SaaS Metrics

Additional revenue from existing customers through upgrades, seats, or usage growth.

F

Favourable Variance

FP&A

A variance that improves the result: revenue above plan or cost below plan. Not automatically good, since underspend often means work that did not happen.

Fiscal Year

FP&A

The twelve-month period a company uses for financial reporting, which may or may not align with the calendar year. A frequent source of error when comparing periods across companies.

Fixed Cost

Accounting

A cost that does not vary with output over the planning horizon, such as rent or salaried headcount.

Fixed Cost Absorption

Financial Analysis

The degree to which volume covers fixed costs, and the mechanism behind operating leverage.

Flash Report

FP&A

A rapid, partial view of results issued before the formal close, giving leadership an early read at the cost of some precision.

Float

Cash & Treasury

The gap between a payment being initiated and the funds actually settling.

Forecast

FP&A

An updated estimate of future performance reflecting current information, distinct from the budget, which stays fixed once approved.

Forecast Accuracy

FP&A

How closely forecasts matched actual outcomes, usually measured as absolute percentage error. Only meaningful when measured line by line, since offsetting errors flatter the total.

Free Cash Flow

Cash & Treasury

Operating cash flow minus capital expenditure. Definitions differ on whether capitalised development and lease payments are deducted.

Fuzzy Matching

Systems & Data

Matching records that are similar but not identical, needed when systems format the same identifier differently.

G

GAAP

Accounting

Generally Accepted Accounting Principles, the US financial reporting standard framework.

General Ledger (GL)

Accounting

The master record of every financial transaction, and the system of record every reconciliation ties back to.

Goodwill

Accounting

The excess of an acquisition price over the fair value of identifiable net assets acquired, carried as an intangible asset.

Gross Burn

Cash & Treasury

Total cash going out each month, before any offsetting receipts.

Gross Margin

Financial Analysis

Gross profit as a percentage of revenue. Comparable between companies only when both classify costs the same way.

Gross Margin Adjusted LTV

SaaS Metrics

Lifetime value calculated on gross profit rather than revenue, which is the only version meaningful for payback analysis.

Gross Profit

Accounting

Revenue minus cost of goods sold: what remains to cover operating expenses and profit.

Gross Revenue Retention (GRR)

SaaS Metrics

Retained revenue from an existing cohort excluding expansion. Cannot exceed 100%, which makes it the truer measure of whether customers stay.

Grounding

AI & Automation

Restricting a model's answer to supplied source data, rather than allowing it to draw on general knowledge and present that as your numbers.

Guardrail

AI & Automation

A programmatic constraint that blocks a system from taking an unsafe or out-of-scope action, enforced rather than requested.

H

Hallucination

AI & Automation

Output that is fluent, confident, and factually wrong. The primary reason finance teams cannot rely on general-purpose AI for numbers they intend to act on.

Headcount Plan

FP&A

The approved schedule of hires by role, team, and start date, and typically the largest single driver of the cost forecast.

Headroom

FP&A

The remaining amount available under a budget or facility before a limit is reached.

Human-in-the-Loop

AI & Automation

A workflow in which a person reviews or approves automated output before it is acted on.

I

Idempotency

Systems & Data

The property that repeating an operation produces the same result as performing it once, which prevents duplicate records on retry.

Impairment

Accounting

A write-down recognising that an asset's carrying value exceeds its recoverable amount.

Income Statement

Accounting

A statement of revenue, costs, and profit over a period. Also called the profit and loss statement.

Intercompany Transaction

Accounting

A transaction between entities within the same group, eliminated on consolidation to avoid double counting.

Internal Rate of Return (IRR)

Financial Analysis

The discount rate at which an investment's net present value is zero.

Inventory Turnover

Financial Analysis

Cost of goods sold divided by average inventory: how many times stock cycles in a period.

J

Journal Entry

Accounting

A record of a transaction posted to the general ledger, with equal debits and credits.

L

Land and Expand

SaaS Metrics

A motion that starts with a small initial contract and grows the account over time, producing high net retention and low initial ACV.

Large Language Model (LLM)

AI & Automation

A model trained to predict text. It generates arithmetic as text rather than executing it, which is why calculations must be delegated to code.

Latest Estimate

FP&A

The current best view of the full-year outcome, combining actuals to date with the forecast for the remainder.

Liquidity

Cash & Treasury

The ability to meet short-term obligations as they fall due, from cash or assets readily convertible to it.

Liquidity Buffer

Cash & Treasury

Cash deliberately held above forecast need to absorb timing shocks without forcing a decision.

Logo Churn

SaaS Metrics

The count of customers lost, regardless of their size. A better product signal than revenue churn, a worse financial one.

Long-Range Plan (LRP)

FP&A

A multi-year financial model, usually three to five years, used for strategic and capital decisions rather than operational control.

M

Magic Number

SaaS Metrics

Annualised quarterly ARR growth divided by prior-quarter sales and marketing spend. Assumes spend converts within one quarter, so it misleads for long sales cycles.

Management Reporting

FP&A

Internal reporting designed to support decisions, as distinct from statutory reporting designed to satisfy external requirements.

Margin of Safety

Financial Analysis

How far sales can fall before reaching break-even, usually expressed as a percentage of current sales.

Master Data

Systems & Data

The core reference records (customers, vendors, products, accounts) shared across systems. Inconsistency here causes most reconciliation breaks.

Matching Principle

Accounting

Recognising expenses in the same period as the revenue they helped generate.

Materialised View

Systems & Data

A stored, pre-computed query result, used to make repeated analysis fast at the cost of some data freshness.

Materiality Threshold

FP&A

The size at which a variance is worth investigating, usually set as both a percentage and a currency floor so small lines do not generate noise.

Mix Effect

FP&A

A change in blended results caused by a shift in the composition of sales rather than any change in individual prices or costs.

Model Drift

AI & Automation

Degradation in output quality over time as the underlying data or environment diverges from what the system was built against.

Monthly Recurring Revenue (MRR)

SaaS Metrics

Contracted recurring revenue normalised to a monthly value, excluding one-time and non-recurring amounts.

Multi-Agent System

AI & Automation

An architecture in which specialised agents handle distinct parts of a task under a coordinating supervisor.

N

Natural Language Query

AI & Automation

Asking a question of a dataset in plain language rather than writing SQL or building a report.

Negative Churn

SaaS Metrics

The condition where expansion from existing customers exceeds losses, producing net retention above 100%.

Net Burn

Cash & Treasury

Cash out minus cash in each month. The correct input for runway; gross burn understates runway substantially.

Net Dollar Retention

SaaS Metrics

Another name for net revenue retention, common in US public company reporting.

Net Income

Accounting

Profit after all costs, interest, and taxes. The bottom line of the income statement.

Net New ARR

SaaS Metrics

New plus expansion ARR minus contraction and churned ARR: the actual growth in the recurring base.

Net Present Value (NPV)

Financial Analysis

The value of future cash flows discounted to today, used to judge whether an investment creates value.

Net Revenue Retention (NRR)

SaaS Metrics

Revenue from an existing cohort including expansion, contraction, and churn, divided by that cohort's revenue a year earlier. Can exceed 100%.

Netting

Cash & Treasury

Offsetting mutual balances between parties so only the net difference is settled.

Normalisation

Systems & Data

Converting data to a consistent format so records from different systems can be compared or joined.

O

Operating Cash Flow

Cash & Treasury

Cash generated by core business operations, excluding financing and investing activity.

Operating Expense (OpEx)

FP&A

The ongoing cost of running the business, excluding the direct cost of producing what is sold.

Operating Lease

Accounting

A lease that grants use of an asset without transferring ownership, now generally recognised on the balance sheet under current standards.

Operating Leverage

Financial Analysis

The degree to which fixed costs amplify the profit impact of a revenue change, in both directions.

Outlier

Financial Analysis

A data point far from the rest of the distribution, which may be an error, a one-off, or the most important signal present.

Output Validation

AI & Automation

Automated checks applied to a generated result before it is returned, catching errors the generating step cannot see in itself.

P

Payback Period

Financial Analysis

The time required for an investment to recover its initial cost from the cash flows it generates.

Payback-Adjusted CAC

SaaS Metrics

Acquisition cost assessed against the gross margin it recovers, rather than against revenue, which overstates recovery speed.

Payment Terms

Cash & Treasury

The agreed period before payment falls due, such as net 30. Aging measured from invoice date rather than due date misreads customers on different terms.

Phasing

FP&A

How an annual budget is spread across periods. Poor phasing generates monthly variances that mean nothing.

Pipeline Coverage

SaaS Metrics

Qualified pipeline value divided by the revenue target, commonly targeted at three to four times, adjusted for historical win rate.

Plan Versus Actual

FP&A

The comparison of realised results against the approved plan, the core report of the monthly financial cycle.

Prepaid Expense

Accounting

Cash paid in advance for a future benefit, held as an asset and expensed over the period it covers.

Price Realisation

Financial Analysis

Actual achieved price as a proportion of list price, revealing the true depth of discounting.

Prompt Engineering

AI & Automation

Structuring instructions to a model to produce reliable output. It reduces the error rate substantially and does not eliminate it.

Provision

Accounting

A liability recognised for an obligation that is probable but uncertain in amount or timing.

Purchase Order (PO)

Accounting

A buyer's formal commitment to purchase, used to control spend before an invoice arrives.

Q

Quick Ratio

Financial Analysis

Current assets excluding inventory, divided by current liabilities: a stricter liquidity test than the current ratio.

Quick Ratio (SaaS)

SaaS Metrics

New plus expansion revenue divided by contraction plus churned revenue. Distinct from the balance-sheet quick ratio despite the shared name.

R

Rate Variance

FP&A

The portion of a variance caused by a change in price or unit cost, calculated as the price change multiplied by actual volume.

Re-Forecast

FP&A

A revised forecast issued mid-period when conditions have changed enough that the existing one no longer informs decisions.

Read-Only Access

AI & Automation

Permission to query data without the ability to modify it, removing the risk that an automated system corrupts the system of record.

Reclassification

Accounting

Moving an amount between accounts or categories. Reclassifying between COGS and OpEx changes gross margin with no operational change whatsoever.

Reconciliation

Systems & Data

Comparing two records of the same transactions to confirm they agree and to identify where they do not.

Referential Integrity

Systems & Data

The guarantee that references between records point at rows that actually exist.

Renewal Rate

SaaS Metrics

The proportion of contracts up for renewal in a period that actually renewed, measured by count or value.

Restricted Cash

Cash & Treasury

Cash that cannot be freely used because it is pledged, held in escrow, or subject to a legal restriction. Excluded from runway.

Retained Earnings

Accounting

Cumulative profit kept in the business rather than distributed to shareholders.

Retrieval-Augmented Generation (RAG)

AI & Automation

Fetching relevant source data and supplying it to a model at query time, so answers are grounded in current records rather than training data.

Return on Assets (ROA)

Financial Analysis

Net income divided by total assets, measuring how efficiently the asset base produces profit.

Return on Equity (ROE)

Financial Analysis

Net income divided by shareholders' equity. Rises with leverage, so it must be read alongside debt.

Revenue Recognition

Accounting

The rules determining when revenue may be recorded, which is often long after the contract is signed and the cash received.

Rolling Forecast

FP&A

A forecast that always looks the same distance ahead, commonly twelve months, extending by one period as each one closes.

Root Cause Analysis

Financial Analysis

Investigating why a number moved rather than reporting that it moved: the work a variance report begins and does not finish.

Rule of 40

SaaS Metrics

Revenue growth rate plus profit margin, with 40 or above the conventional target. Which margin definition is used changes the answer and is rarely stated.

Run Rate

FP&A

A current period's result extrapolated to a full year. Useful shorthand, misleading whenever the business is seasonal.

Run-Rate Cost

FP&A

The ongoing recurring cost base, separated from one-time or growth investment spend.

S

Sales Cycle Length

SaaS Metrics

The average time from qualified opportunity to closed deal, which determines how far ahead pipeline must be built.

Sandboxed Execution

AI & Automation

Running generated code in an isolated environment with restricted permissions, so analysis can be executed without risk to production data.

Scenario Planning

FP&A

Modelling several plausible futures with explicit assumptions, to understand the range of outcomes and identify decision triggers.

Schema

Systems & Data

The structure defining how data is organised: tables, fields, and their relationships.

Seasonality

Financial Analysis

Recurring, predictable variation tied to time of year, which makes sequential comparison misleading unless adjusted for.

Seat Expansion

SaaS Metrics

Revenue growth from an existing customer adding users rather than upgrading tier or buying new products.

Self-Correction

AI & Automation

A workflow in which a system checks its own intermediate output against constraints and revises before returning a final answer.

Semantic Layer

AI & Automation

A definition layer mapping business terms to underlying data, so a metric name resolves to one agreed calculation.

Sensitivity Analysis

FP&A

Testing how much an outcome changes when one input moves, to identify which assumptions actually matter.

Single Source of Truth

Systems & Data

One authoritative record for a given fact, so different reports cannot disagree about the same number.

Source System

Systems & Data

The original system where a transaction is recorded, and the system any reconciliation ultimately ties back to.

Staging Layer

Systems & Data

An intermediate store holding raw extracted data before transformation, preserving the original for audit.

Statement of Cash Flows

Accounting

The statement reconciling profit to the actual movement in cash, split into operating, investing, and financing activities.

Step Cost

FP&A

A cost that stays fixed until a volume threshold and then jumps: an additional facility, shift, or licence tier. Frequently missed in break-even models.

Structural Change

FP&A

A variance driven by a permanent shift (a price increase, a new contract, a headcount change) that repeats in future periods.

Structured Output

AI & Automation

Model output constrained to a defined schema, so results can be validated and consumed programmatically rather than parsed from prose.

T

Thirteen-Week Cash Flow

Cash & Treasury

A rolling weekly forecast of receipts and payments over the next quarter, the standard operational cash management horizon.

Three-Way Match

Accounting

Verifying that purchase order, goods receipt, and invoice agree before payment is released.

Time to Value

SaaS Metrics

How long after purchase a customer reaches their first meaningful outcome, a strong leading indicator of retention.

Timing Difference

FP&A

A variance caused only by when a transaction was recorded, which reverses in the following period and implies nothing about performance.

Top-Down Forecast

FP&A

A forecast set from an overall target and allocated downward. Fast to produce, and weakly grounded unless reconciled bottom-up.

Total Contract Value (TCV)

SaaS Metrics

The full value of a contract across its entire term, including one-time fees.

Traceability

AI & Automation

The ability to follow any reported figure back through its formula and inputs to the source records it came from.

Trailing Twelve Months (TTM)

Financial Analysis

The most recent twelve months of results, used to smooth seasonality and avoid fiscal-year boundary effects.

Trial Balance

Accounting

A listing of every ledger account balance, used to verify that total debits equal total credits before close.

U

Unfavourable Variance

FP&A

A variance that worsens the result: revenue below plan or cost above plan.

Unit Economics

Financial Analysis

The revenue and cost associated with a single customer or unit, which determines whether growth creates or destroys value.

V

Variable Cost

Accounting

A cost that changes directly with output, incurred only when an additional unit is produced or sold.

Volume Variance

FP&A

The portion of a variance caused by a change in quantity, calculated as the volume change multiplied by budgeted price.

W

Waterfall Chart

Financial Analysis

A chart showing how sequential positive and negative contributions accumulate from a starting to an ending value.

Weighted Average

Financial Analysis

An average in which each value is scaled by its size or importance, rather than counted equally.

Win Rate

SaaS Metrics

The proportion of qualified opportunities that close as won, ideally measured by stage rather than in aggregate.

Working Capital

Cash & Treasury

Current assets minus current liabilities. Growth consumes cash even in a profitable business, which is how growing companies run out of money.

Write-Off

Accounting

Removing an asset, usually an uncollectable receivable, from the books once recovery is no longer expected.

Y

Year-over-Year (YoY)

Financial Analysis

Comparison against the same period in the prior year, which controls for seasonality in a way sequential comparison does not.

Z

Zero-Based Budgeting

FP&A

Rebuilding the budget from zero each cycle with every line justified, rather than adjusting the prior year. Thorough and expensive in analyst time.

Zero-Cash Date

Cash & Treasury

The projected date on which cash reaches zero at the current burn rate.

Definitions are the easy part

Your business runs on its own

Which revenue counts as recurring, how commissions are recognised, which quarter is genuinely comparable: those rules usually live in one person's head, and every analysis silently re-derives them. DataWyse captures them once, then applies them to every answer.

Book a pilot call Try the free tools →