Glossary of Finance Terms
409A Valuations
409A valuations are independent assessments of a company’s common stock value to ensure compliance with IRS requirements for equity compensation.
Accrual Accounting
Accrual accounting records revenue and expenses when they are earned or incurred, regardless of when cash is exchanged.
A/P (Accounts Payable)
Accounts payable refers to amounts a business owes to vendors or suppliers for goods and services received.
A/R (Accounts Receivable)
Accounts receivable represents outstanding customer invoices for goods or services that have been delivered but not yet paid.
Balance Sheet Reconciliation
Balance sheet reconciliation is the process of verifying account accuracy by matching internal records with external statements and supporting documentation.
Benefits Administration
Benefits Administration includes overseeing employee benefits programs, such as health insurance, retirement plans, and other perks.
Board Updates, Shareholder Meetings
Board updates and shareholder meetings involve preparing and presenting financial information to support governance and strategic alignment.
Business Portfolio
A business portfolio is the collection of products, services, or businesses owned by a company.
Business Product
A business product is tangible or intangible offering (e.g., software, service, physical product) that a company sells to customers to generate revenue.
Business Tax Returns
Business tax returns are the preparation and filing of federal, state, and local tax returns for business entities.
Business Value
Business value is the estimated worth of a business, considering its assets, liabilities, earnings potential, and market conditions.
Business Venture
A business venture is a new business endeavor or project to generate profit. It often involves risk, as entrepreneurs invest their resources, time, and energy into an idea or opportunity that may or may not succeed in the marketplace.
Cap Table Management
Cap table management tracking and managing the ownership and equity distribution of a company.
CFO
CFO stands for chief financial officer and refers to a senior executive responsible for managing an organization’s financial activities, including financial planning, budgeting, and reporting.
Channel Mix and Distribution/Distribution Strategy
Channel Mix and Distribution/Distribution Strategy focuses on selecting and managing the most effective distribution channels for products and services.
Collections
Collections is the process of tracking and recovering unpaid customer balances to improve cash flow.
Compensation Analysis
Compensation Analysis involves evaluating compensation data to ensure competitive and fair salary structures that attract and retain talent.
Compensation Analysis & Total Rewards Mgmt
Compensation Analysis & Total Rewards Mgmt includes assessing and managing total compensation packages, including salary, bonuses, and benefits.
Compensation Benchmarking (Salary + Equity)
Compensation Benchmarking involves analyzing and comparing compensation packages against industry standards to ensure competitive offerings.
Compliance Auditing and Supervision
Compliance Auditing and Supervision ensures HR practices are in compliance with legal standards and regulations through regular audits.
Contra Revenue
Contra revenue is a reduction in gross revenue due to sales allowances, returns, or discounts given to customers, resulting in net revenue.
Contribution Margin
The contribution margin is the resulting difference between a company’s total revenue and its variable costs.
Candidate Experience Improvements
Candidate Experience Improvements involve enhancing the hiring process to ensure a positive experience for candidates from application to offer.
Custom Career Page Implementation
Custom Career Page Implementation involves designing and building a personalized career page that aligns with the company’s brand and attracts candidates.
Custom Referral Program
Custom Referral Program involves developing and managing employee referral programs to leverage current employees in attracting top talent.
CRM
Customer Relationship Management is software that helps businesses track, manage, and improve their interactions with customers throughout the customer lifecycle.
Digital Presence & Identity (Branding & Positioning)
Digital Presence & Identity involves defining and establishing a brand’s identity and positioning in the digital space to build recognition and influence.
Document Management
The process of capturing, storing, organizing, and accessing electronic and physical documents.
Dollar on the Net
Dollar on the net, also known as net dollar retention, refers to the total value of sales or transactions you keep and expand within your existing customer base.
Double Trigger
Double trigger acceleration allows for the early vesting of someone’s stock or options if two distinct triggering events occur.
Expense Reimbursement
Expense reimbursement is the process of getting repaid for business-related expenses you incurred with your own money.
Fair Market Value
Fair market value (FMV) is the hypothetical price at which a willing buyer and a willing seller agree to transact for an asset or property under usual market conditions.
Financial Accounting
Financial accounting is the branch of accounting that records, summarizes, and reports financial transactions for external users like investors and creditors.
Financial Analysis and Advisory
Financial analysis and advisory provides strategic insights and recommendations to support informed financial decision-making.
Financial Statements
Financial statements are core reports, including the balance sheet, income statement, and cash flow statement, that summarize a company’s financial position and results.
Form 6765
Form 6765 is a tax form in the United States used to claim the credit for increasing research activities.
Fractional Chief Financial Officer
A fractional chief financial officer is a part-time or shared CFO role, providing financial expertise to multiple companies on a flexible basis.
GMV (Gross Merchandise Value)
GMV is the total value of goods or services sold on a platform or marketplace over a specific period of time, excluding discounts, returns, or other deductions.
Gross Profit Margin
Gross profit margin is the percentage of revenue a company retains after deducting the direct costs associated with producing or providing its goods or services.
HRIS Administration
HRIS Administration involves managing Human Resources Information Systems, ensuring data integrity, and effective use of HR software systems.
Incentive Management
Incentive management involves strategically designing, implementing, and administering programs to motivate employees to achieve specific organizational goals.
Incentive Plan Management
Incentive plan management is the design and administration of compensation plans that align employee incentives with company performance.
Interview Training
Interview Training involves preparing hiring managers and interviewers with the skills and techniques needed to conduct effective and fair interviews.
Job Description Creation + Audit
Job Description Creation + Audit refers to drafting detailed job descriptions and conducting audits to ensure roles are accurately represented and meet organizational standards.
Learning and Development Strategy
Learning and Development Strategy refers to designing and implementing learning and growth opportunities for employees to improve skills and career advancement.
Learning Management System (LMS)
LMS is a platform for delivering, tracking, and managing employee training and development.
Last Twelve Months (LTM)
LTM stands for last twelve months and refers to the financial performance of a company over the most recent twelve-month period.
Managerial Accounting
Managerial accounting goes beyond the surface of financial reporting, empowering managers with insights to optimize decision-making.
Market Analysis & Ideal Customer Profile Creation
Market Analysis & Ideal Customer Profile Creation involves understanding the market landscape and defining the characteristics of the target customer for tailored marketing strategies.
Material Procurement
Material procurement is the process of acquiring raw materials or goods required for production by a company.
Metric Definitions and Dashboard Development
Metric Definitions and Dashboard Development involves creating relevant metrics and designing dashboards for tracking business performance and decision-making.
Month Over Month (MOM)
MoM is a metric used to measure the percentage change in a certain variable from one month to the next.
Net Expansion Rate
Net expansion rate, sometimes referred to as net revenue expansion, is a metric used to measure the growth or expansion of revenue generated from existing customers.
Net Dollar Retention
Net dollar retention refers to the total value of sales or transactions you keep and expand within your existing customer base.
Offer Negotiation
Offer Negotiation involves guiding hiring managers and candidates through the process of negotiating salary, benefits, and other employment terms.
Payroll
Payroll is the administration of employee compensation, including wages, salaries, bonuses, and required tax withholdings.
Performance Management System
Performance Management System involves tools and processes used to assess and manage employee performance, goal-setting, and feedback.
Performance Review Implementation & Mgmt
Performance Review Implementation & Mgmt refers to administering and managing regular performance reviews and evaluations for employees.
Portfolio Company
A portfolio company, portco, refers to a company or entity that is held as an investment in a portfolio of investments owned by an individual or entity.
P&L Review
A P&L review is an evaluation of the profit and loss statement to assess financial performance, cost structure, and profitability.
Pro Forma Statement
A pro forma statement is a forward-looking financial statement that models expected future financial results under specific assumptions.
Revenue Recognition
Revenue recognition is the accounting principle that determines when to record revenue from a sale of goods or services.
Resource Planning
Resource planning focuses on allocating financial and operational resources to support business growth and efficiency.
Roll-Up Vehicle (RUV)
RUV stands for roll-up vehicle. An RUV is a type of SPV for angel investors and founders.
Scheduled and Ad Hoc Reports
Scheduled and Ad Hoc Reports refers to creating and distributing regular and one-time reports related to HR data and performance.
Section 382
Section 382 refers to a provision in the United States Internal Revenue Code that limits the ability of a company to offset its future taxable income with net operating losses (NOLs) if there is a significant ownership change.
Series A
Series A is the first significant round of investment financing obtained by a startup from external investors in exchange for equity.
Serviceable Available Market
Serviceable available market (SAM) is the portion of the total addressable market that a business can realistically target and serve.
Single Trigger Acceleration
Single trigger acceleration refers to a provision in a company’s equity or stock option plan that enables an employee to receive immediate vesting or acceleration of their equity or stock options upon the occurrence of a specified triggering event.
Special Purpose Entity
A special purpose entity, an SPE, or an SPV is a separate legal entity created for a specific purpose, often used in complex financial transactions or investments.
Special Purpose Vehicle
SPV stands for special purpose vehicle and refers to a legal entity created for a specific financial purpose.
Staffing Consultations and Subject Matter Expert (SME) Interviews
Staffing Consultations and SME Interviews includes providing expert advice on staffing needs and conducting interviews with subject matter experts for insights.
Technology Procurement & Negotiation
Technology Procurement & Negotiation includes sourcing and negotiating the purchase of technological tools and systems to meet organizational needs.
Time To Market (TTM)
TTM is a key performance indicator (KPI) that measures the duration from a product’s conception or initial idea to its launch and availability for purchase by consumers.
Tool Implementation, Integration, and Middleware Development
Tool Implementation, Integration, and Middleware Development involves setting up and connecting software tools and developing systems to enable seamless communication across platforms.
Venture Partners
Venture partners are individuals or entities that invest capital and provide expertise to emerging businesses in exchange for potential financial returns.
Valuation
Valuation is the process of determining the economic value or worth of an asset, company, investment, or financial instrument.
VC Fund
VC fund is a pool of money invested in high-growth, early-stage companies.
Website Design & Development
Website Design & Development includes the creation, design, and development of a company’s website to enhance user experience and functionality.
