All memos tagged #accounting-lexicon

The Accounting Glossary is a collection of the bookkeeping and accounting terms behind John's Weekly Accounting practice. It gives operators, founders, and bookkeepers a shared vocabulary for keeping...

The traditional titles in a Finance & Accounting Department, from most to least senior: Chief Financial Officer VP / Director Finance VP / Director FP&A Controller Accounting Manager Staff Accountant...

The Functions in a Finance & Accounting Department fall into two groups: accounting, which covers bookkeeping and the accrual accounting of the month-end close, and finance, which covers financial...

A Finance & Accounting Department is the team that executes the functions required to enable management to run the business well, from keeping the books to planning and analyzing the company's...

Inbound Freight in a consumer branded goods business is the cost of shipping, duties, and tariffs to get parts and ingredients to the manufacturer and finished goods from the manufacturer to the...

GAAP), short for Generally Accepted Accounting Principles, is the body of authoritative standards and common practices that governs how a business records and reports financial information so its...

Transaction Downloads are the bank and credit card transactions that accounting software such as Quickbooks Online automatically imports from a business's financial institutions, each of which must...

Tops Down budgeting is a budgeting method that starts with Boundary Conditions for growth targets and runway, then fills in the level of expenses the company can sustain. The method works from the...

A Base Budget is a revenue budget set conservatively enough that a company expects to beat it in 90% of scenarios, with expenses then budgeted Bottoms up to stay within the desired runway. Annual...

Other Variable Overheads are costs that increase with sales but are not included in cost of goods sold (COGS), such as percentage-of-revenue referral fees and the cost of managing a customer care...

Automated Transactional processing is a system in which every cash entry is automatically matched to its Accrual Accounting entry as soon as it is entered into the books. In conventional bookkeeping,...

ARR (Annualized Recurring Revenue, also called Annual Recurring Revenue) is the yearly value of the revenue a company expects to keep receiving from its customers on a recurring basis, such as...

A PEO, or Professional Employer Organization, is a firm paid by companies to serve as the employer of record for their employees, taking on payroll, benefits, and employment compliance. PEOs work...

A Strategic Transaction is a company-defining transaction that changes a company's ownership, capital structure, or scope, most commonly raising capital, acquiring a company, or selling the company....

Cash Basis accounting is a method of recognizing revenue and expenses as cash hits or leaves the bank account, rather than when revenue is earned or expenses are incurred. It stands in contrast to...

Operational Accounting vs Tax Accounting is the BrightZen Systems principle that the accounting kept to run a business takes priority over the accounting kept to file its taxes, summed up in a...

Bottoms up budgeting builds a company's expense budget from the ground up, starting with every vendor in every department and every account and reviewing past spending with each department head to...

Expense Accounts are the accounts a company uses to categorize its expenses on the Income Statement. Each expense account collects costs of one kind, such as salaries, rent, or software, so operating...

ZAAP is short for Z Accepted Accounting Principles, the set of accounting principles that BrightZen Systems considers reasonable for startups. The name plays on GAAP, Generally Accepted Accounting...

The Month End Close is the recurring accounting process of finalizing a company's books for a calendar month, so that the month's financial statements can be produced and relied on. A typical close...