At ATMS Advisors, we help startups and SMEs navigate finance, accounting, taxation, and compliance with ease. Our glossary explains common business, finance, and compliance terms in plain, human-friendly language, with examples and insights drawn from our experience guiding companies in India.
Whether you’re a startup founder, SME owner, or entrepreneur exploring CFO services, this glossary will help you understand the language of business and make informed financial decisions.
A
Accounts Payable (AP) – Money your business owes to vendors. For example, hiring a marketing agency or purchasing office supplies is part of AP. Learn how ATMS Advisors helps manage AP efficiently.
Accounts Receivable (AR) – Money your customers owe you. If you provide services today but get paid next month, that’s AR. Our Virtual CFO services help optimize receivables for smooth cash flow.
Accrual Accounting – Recording transactions when they occur, not just when cash moves. It’s like keeping a diary of business events. ATMS Advisors guides businesses to adopt accrual accounting for accurate reporting.
Asset – Anything valuable your business owns, like cash, property, or equipment. Proper asset tracking ensures accurate reporting and informed decision-making.
Audit – Independent review of financial records for accuracy and compliance. We help businesses prepare for both internal and statutory audits.
B
Balance Sheet – Snapshot of your business at a given time, showing assets, liabilities, and equity. Our team creates clear balance sheets to support strategic decisions.
Bookkeeping – Recording daily transactions. Accurate bookkeeping simplifies reporting and reduces errors. ATMS Advisors’ accounting outsourcing ensures books are always up-to-date.
Break-Even Point – Sales level where revenue equals costs. Knowing this helps with pricing and growth planning. ATMS Advisors calculates and explains break-even points to guide strategy.
Budgeting – Planning income and expenses. Effective budgeting ensures sustainable growth and operational efficiency.
Business Valuation – Estimating your company’s worth, often for investment or partnership decisions. We provide valuation guidance for informed business choices.
C
Capital – Funds invested into the business for growth or operations. ATMS Advisors advises on optimal allocation to maximize returns.
Cash Flow – Movement of money in and out of your business. Positive cash flow is vital for operations, and our CFO services include detailed cash flow planning.
CFO Services – Strategic financial guidance for businesses. Our CFO services include budgeting, cash flow management, risk mitigation, and growth planning.
Compliance – Adhering to laws, rules, and regulations. ATMS Advisors ensures clients stay compliant with GST, income tax, ROC filings, and other statutory requirements.
Corporate Governance – Systems and processes guiding business management. Our advisory helps implement governance for accountability and transparency.
D
Debit – Money going out of your account, like payments or expenses.
Depreciation – Reduction in asset value over time, e.g., machinery or vehicles. ATMS Advisors helps clients account for depreciation for accurate reporting and tax planning.
Dividend – Profit distributed to shareholders. Startups may reinvest profits instead, and we provide guidance on the best approach.
Due Diligence – Detailed review of finances and operations before investments or partnerships. Our experts conduct thorough due diligence to mitigate risks.
E
EBITDA – Earnings before interest, taxes, depreciation, and amortization; shows operating profitability.
Equity – Ownership value in a company. We help businesses manage equity distribution and investor relations.
ESOP (Employee Stock Option Plan) – Offering employees shares as part of compensation. We advise on structuring ESOPs for startups.
Expense – Money spent to run your business. ATMS Advisors tracks expenses to improve budgeting and profitability.
External Audit – Independent verification of financial statements. Our team supports audit readiness and compliance.
F
Financial Forecasting – Predicting future income, expenses, and cash flow. Our CFO services provide actionable forecasts for planning growth.
Financial Modelling – Simulating business scenarios to make data-driven decisions.
Fixed Assets – Long-term resources like buildings, machinery, and vehicles.
Fundraising – Raising capital for business growth. We guide startups and SMEs through VC, private equity, and debt funding.
FEMA (Foreign Exchange Management Act) – Indian law regulating foreign currency and international transactions. ATMS Advisors ensures compliance for all international transactions.
G
GAAP (Generally Accepted Accounting Principles) – Standard accounting rules for consistency and accuracy.
GST (Goods and Services Tax) – Tax on goods and services in India. Our taxation advisory ensures clients comply and maximize input tax credits.
Gross Profit – Revenue minus the cost of goods or services. We help clients analyze profitability accurately.
Goodwill – Intangible value like brand reputation or customer loyalty.
Going Concern – Assumption your business will operate in the foreseeable future.
H
Hedging – Reducing financial risk through strategic planning or instruments.
Holding Company – A parent company controlling subsidiaries.
Human Capital – Skills, knowledge, and experience of employees. We advise businesses on leveraging human capital efficiently.
Hybrid Financing – Combining debt and equity to fund growth.
I
Income Statement – Shows revenue, expenses, and profit over a period.
Inflation – Rise in prices reducing money’s purchasing power.
Input Tax Credit (ITC) – Credit for GST paid on purchases, reducing tax liability.
Internal Audit – In-house review of controls and processes.
Investment – Money put into business or assets expecting returns.
J
Joint Venture (JV) – Collaboration between businesses for a specific project.
Journal Entry – Recording a financial transaction in accounting books.
Judicial Compliance – Following court-mandated laws or regulations.
K
KPI (Key Performance Indicator) – Metrics to measure business performance.
KYC (Know Your Customer) – Verifying client identities.
Knowledge Capital – Intellectual property, expertise, or patents a business owns.
L
Liabilities – Obligations like loans or pending payments.
Ledger – A complete record of all transactions.
Leverage – Using borrowed funds to increase potential returns.
Liquidity – How quickly assets can be converted to cash.
LLP (Limited Liability Partnership) – Business structure limiting partners’ personal liability.
M
Mergers & Acquisitions (M&A) – Combining or buying businesses.
Margin – Profit difference between cost and selling price.
MAT (Minimum Alternate Tax) – Minimum tax payable by companies in India.
Market Value – Current worth of a company or asset.
Management Audit – Evaluating management practices and efficiency.
N
Net Profit – Money left after all expenses and taxes.
NPA (Non-Performing Asset) – Loans not being repaid.
Net Worth – Assets minus liabilities.
NRI (Non-Resident Indian) – Indian living abroad with business or tax obligations in India.
O
Operating Income – Profit from core business activities.
Outsourcing – Hiring external service providers for tasks like accounting or payroll.
Overheads – Ongoing expenses like rent, electricity, and utilities.
Ownership Equity – Shareholders’ stake in a company.
P
Partnership – Business owned by two or more people.
Payroll – Paying employees and managing statutory deductions.
Private Equity – Investment in private companies to fuel growth.
Profit & Loss Statement (P&L) – Report showing income, expenses, and net profit.
Provision – Funds set aside for expected liabilities or expenses.
Q
Quarterly Results – Performance report every three months.
Quick Ratio – Measures ability to pay short-term obligations with liquid assets.
Quality Audit – Ensures products or services meet required standards.
R
Receivables – Money owed by customers.
Return on Investment (ROI) – Profit relative to investment.
Risk Management – Identifying and minimizing business risks.
ROC Filing – Required filings with the Registrar of Companies in India.
Revenue – Total income from business operations.
S
Share Capital – Funds raised by issuing shares.
Startup – Newly founded company with growth potential.
Statutory Audit – Legally required audit.
Seed Funding – Initial capital to launch a business.
Subsidiary – Company controlled by a parent organization.
T
Tax Deducted at Source (TDS) – Tax collected when payments are made.
Trial Balance – Summary of all ledger accounts.
Transfer Pricing – Pricing for transactions between related companies.
Turnover – Total sales or revenue.
Tax Audit – Review to ensure compliance with tax laws.
U
Unsecured Loan – Loan without collateral.
Underwriting – Guarantee to buy unsold shares during fundraise.
Utility Expenses – Recurring costs like electricity, water, and internet.
V
Valuation – Estimating the worth of a business or asset.
Variable Cost – Costs that change with production or sales.
Virtual CFO – Remote CFO services providing strategic financial guidance.
Venture Capital – Funding for startups in exchange for equity.
Voucher – Document evidencing a business transaction.
W
Working Capital – Current assets minus current liabilities; shows short-term financial health.
Write-Off – Removing uncollectible debt or obsolete assets from accounts.
Withholding Tax – Tax deducted at source for payments to foreign entities.
Warranty – Promise to repair or replace a defective product.
X, Y, Z
Yield – Return earned on an investment.
Zero-Based Budgeting – Budgeting from scratch, justifying every expense.
Zakat – Charitable contribution under Islamic law, sometimes relevant for Sharia-compliant businesses.
