A plain-English finance glossary.
Every term we use in a board pack, explained clearly. No jargon for the sake of it.
Accrual accounting
Recognising revenue when earned and expenses when incurred, regardless of cash movement. Required for most businesses above the ATO's small business thresholds.
ACNC
Australian Charities and Not-for-profits Commission. Regulator for registered charities. Annual Information Statement lodgement is the principal compliance obligation.
Board pack
The monthly financial and strategic report presented to a board or finance committee. A good board pack is six views, one page of commentary, and takes under 20 minutes to read.
Cash flow forecast
A forward projection of cash inflows and outflows, typically 13 weeks for operational use and 12 months for strategic planning.
CFO
Chief Financial Officer. Senior executive responsible for financial strategy, capital allocation, board reporting and relationships with lenders and investors.
Covenant
A contractual obligation in a loan agreement — typically a financial ratio the borrower must maintain. Common examples: debt service coverage, leverage ratio, minimum EBITDA.
Div 7A
Section of the Australian tax law that treats certain loans, advances and payments from private companies to shareholders as deemed dividends.
EBITDA
Earnings before interest, tax, depreciation and amortisation. A proxy for operating cash generation used in covenant testing and business valuation.
Fractional CFO
See "Virtual CFO". The same role, different label.
Month-end close
The monthly process of finalising books: reconciliations, accruals, journals, and management reporting. A disciplined close runs in 5–7 business days.
Reserves
Unrestricted funds held by an organisation (especially an NFP) as a buffer against revenue shocks. Typically measured in months of operating expense.
Retention
Money withheld from a construction progress payment, typically 5–10%, released on practical completion and/or defects-liability expiry.
STP2
Single Touch Payroll Phase 2. The ATO's enhanced payroll reporting regime mandatory for all Australian employers.
Virtual CFO
A senior finance professional engaged part-time (4–20 hours/month) to provide strategic finance leadership without the cost of a full-time CFO. Also called a fractional CFO or outsourced CFO.
WIP
Work in progress. The accounting value of partially completed projects. A critical line for construction businesses and professional services firms.
Xero
Cloud accounting software used by most Australian SMBs under $50m turnover. We are a Certified Xero Advisor.
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