Cloud-based enterprise planning platform that enables organizations to connect strategy, plans, and execution across Finance, Sales, Supply Chain, HR, and IT. Known for its in-memory calculation engine and flexible modeling capabilities.
Example: A global manufacturer uses Anaplan to integrate FP&A with S&OP, connecting financial forecasts directly to production planning.
The detailed financial and operational budget for the upcoming fiscal year, typically broken down by month or quarter. The AOP aligns departmental plans with company-wide strategic goals and financial targets.
Example: The AOP process kicks off in Q3, with departments submitting budget requests that roll up into the corporate P&L, balance sheet, and cash flow forecast.
US GAAP revenue recognition standard requiring companies to recognize revenue when control of goods or services transfers to the customer, not necessarily when cash is received. Applies to contracts with customers and requires detailed tracking of performance obligations.
Example: A SaaS company recognizes subscription revenue ratably over the contract term rather than upfront, in compliance with ASC 606.
US GAAP lease accounting standard requiring companies to recognize lease assets and liabilities on the balance sheet for most operating and finance leases. Replaced ASC 840 in 2019.
Example: A retailer with 100 store leases must now recognize right-of-use assets and lease liabilities on the balance sheet under ASC 842.
A detailed financial plan for a specific period (typically one year) that outlines expected revenues, expenses, capital expenditures, and cash flows. Used as a performance baseline and resource allocation tool.
Example: The annual budget process involves bottom-up inputs from department managers and top-down targets from executive leadership.
Technologies and practices for collecting, integrating, analyzing, and presenting business data to support decision-making. Includes dashboards, reports, data visualization, and self-service analytics.
Example: The CFO uses a Power BI dashboard to track actual performance vs budget in real-time with drill-down capabilities.
Funds used to acquire, upgrade, or maintain physical assets such as property, buildings, technology, or equipment. CapEx appears on the balance sheet and is depreciated over the asset's useful life.
Example: A manufacturer budgets $5M in CapEx for new production equipment, which will be depreciated over 10 years.
The process of combining financial statements from multiple legal entities, divisions, or business units into a single corporate view. Includes intercompany eliminations, currency translation, and minority interest calculations.
Example: A parent company consolidates results from 20 subsidiaries, eliminating $50M in intercompany transactions.
The methodologies, metrics, processes, and systems used to monitor and manage business performance. Also known as EPM (Enterprise Performance Management) or BPM (Business Performance Management).
Example: A CPM platform integrates budgeting, forecasting, consolidation, and reporting in one system.
EU regulation requiring large companies to report on sustainability matters including environmental impact, social responsibility, and governance. Mandates double materiality assessment and third-party assurance.
Example: A multinational corporation implements CSRD-compliant reporting covering Scope 1, 2, and 3 emissions, DEI metrics, and supply chain risks.
A visual display of key performance indicators, metrics, and data points that provides an at-a-glance view of business performance. Often includes charts, graphs, and KPI scorecards with drill-down capabilities.
Example: The executive dashboard shows revenue, EBITDA, cash position, and forecast accuracy with monthly trends.
Payment received from customers for goods or services not yet delivered. Recorded as a liability on the balance sheet and recognized as revenue when performance obligations are met under ASC 606.
Example: A SaaS company receives $120K for an annual subscription upfront, recognizing $10K per month as revenue.
Planning approach that links financial outcomes to operational drivers (e.g., headcount drives compensation, units sold drive COGS). Enables what-if scenario modeling by changing driver assumptions.
Example: Revenue is driven by sales headcount × quota × attainment rate, allowing instant scenario modeling.
Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of operating profitability that excludes non-operating expenses and non-cash charges. Commonly used in valuations and debt covenants.
Example: A company with $100M revenue, $70M operating expenses, and $5M D&A reports $25M EBITDA.
The comprehensive set of processes for planning, budgeting, forecasting, consolidation, reporting, and analysis. Modern EPM platforms integrate financial and operational planning on a single technology stack.
Example: An EPM implementation connects FP&A, supply chain planning, workforce planning, and analytics.
Framework for measuring an organization's sustainability and ethical impact. Environmental includes emissions and resource use, Social covers labor and community, Governance addresses board structure and ethics.
Example: An ESG report tracks Scope 1/2/3 emissions, diversity metrics, and board independence percentages.
A projection of future financial or operational performance based on historical trends, current run-rates, and forward-looking assumptions. Typically updated more frequently than the annual budget.
Example: The Q2 forecast projects $25M revenue vs $23M budget, based on pipeline strength and current close rates.
The function responsible for budgeting, forecasting, variance analysis, financial modeling, and providing decision support to leadership. Bridges the gap between accounting and strategic planning.
Example: The FP&A team builds the annual budget, produces monthly rolling forecasts, and provides board reporting.
A unit measuring employee workload where 1.0 FTE equals one full-time employee working standard hours. Part-time employees are counted as fractional FTEs (e.g., 0.5 FTE for 20 hours/week).
Example: A department with 10 full-time employees and 4 half-time employees has 12.0 FTEs.
The accounting standards, conventions, and rules used in the United States. US GAAP differs from IFRS in areas like revenue recognition, leases, and consolidation. Public companies must report under GAAP.
Example: A multinational reports under both US GAAP (for SEC filings) and IFRS (for EU operations).
Independent organization providing the world's most widely used sustainability reporting standards. GRI standards cover economic, environmental, and social impacts.
Example: A company reports GHG emissions, water usage, and labor practices following GRI Standards.
The process of forecasting future employee needs by department, role, and location. Includes new hires, attrition, promotions, and contractor-to-FTE conversions. Drives compensation expense in financial plans.
Example: Sales headcount plan shows 50 reps in Q1, 55 in Q2 (5 new hires), 53 in Q3 (2 attrition).
Advanced S&OP process that extends beyond supply chain to include financial planning, portfolio management, and strategic initiatives. Aligns operational plans with financial targets in an integrated framework.
Example: IBP connects demand planning, supply planning, new product launches, and financial forecasts monthly.
Accounting standards issued by the International Accounting Standards Board (IASB) and used in over 140 countries. Differs from US GAAP in treatment of leases, revenue, inventory, and other areas.
Example: A European subsidiary reports under IFRS while the US parent consolidates under US GAAP.
The process of removing transactions between related entities during consolidation to avoid double-counting revenue, expenses, assets, and liabilities. Required for accurate consolidated financial statements.
Example: Entity A sells $1M to Entity B; during consolidation, both the $1M revenue and $1M expense are eliminated.
Cloud-based planning platform with Excel-like interface, popular with mid-market companies. Known for familiar user experience, strong OLAP database, and flexible modeling for budgeting, forecasting, and reporting.
Example: A $200M manufacturer uses Jedox for financial planning, replacing 50+ Excel workbooks with one integrated model.
A measurable value demonstrating how effectively a company achieves key business objectives. KPIs vary by department (e.g., revenue growth for Sales, EBITDA margin for Finance, forecast accuracy for FP&A).
Example: Sales KPIs include pipeline coverage (4x), win rate (25%), and average deal size ($50K).
Strategic financial plan covering 3-5 years (or longer), typically at a higher level than annual budgets. Focuses on strategic initiatives, capital allocation, and long-term financial targets.
Example: The 5-year LRP shows revenue growing from $500M to $1B through organic growth and acquisitions.
Quantifiable measures used to track and assess business performance. Can be financial (revenue, margin, cash) or operational (units sold, headcount, customer retention).
Example: Key metrics tracked include monthly recurring revenue (MRR), customer acquisition cost (CAC), and churn rate.
Maintaining financial statements under multiple accounting standards (e.g., US GAAP, IFRS, local GAAP). Common for multinationals with operations in different jurisdictions or dual listings.
Example: A US company with European operations reports US GAAP for SEC and IFRS for EU subsidiaries.
Unified CPM platform combining financial consolidation, planning, reporting, data quality, and financial data management. Known for replacing legacy solutions like Hyperion and SAP BPC.
Example: An enterprise replaces Hyperion Financial Management with OneStream for unified consolidation and planning.
Day-to-day expenses required to run the business, including salaries, rent, utilities, marketing, and R&D. OpEx is expensed immediately on the P&L, unlike CapEx which is capitalized.
Example: Monthly OpEx includes $500K compensation, $100K rent, $200K marketing, and $150K SG&A.
Financial statement showing revenues, expenses, and net income over a period. Also called Income Statement. Structure: Revenue - COGS = Gross Profit - OpEx = Operating Income - Interest/Tax = Net Income.
Example: Q1 P&L shows $10M revenue, $6M COGS, $3M OpEx, resulting in $1M net income.
The accounting principle determining when revenue should be recorded on the P&L. Under ASC 606/IFRS 15, revenue is recognized when performance obligations are satisfied, not when cash is received.
Example: A software company recognizes subscription revenue ratably over 12 months, not upfront.
A continuous forecast that extends a fixed period into the future (e.g., always showing next 12-18 months), updated monthly or quarterly. Replaces or supplements static annual budgets.
Example: In June, the 18-month rolling forecast covers July 2024 through December 2025.
A performance measure evaluating the efficiency of an investment, calculated as (Gain from Investment - Cost of Investment) / Cost of Investment. Expressed as percentage or ratio.
Example: A $100K marketing campaign generates $150K in margin, delivering 50% ROI.
Cross-functional process integrating demand planning, supply planning, inventory management, and financial reconciliation. Typically runs monthly with executive review meetings.
Example: Monthly S&OP cycle: demand review (week 1), supply review (week 2), financial review (week 3), executive meeting (week 4).
Industry-specific sustainability reporting standards focused on financially material ESG factors. Now part of IFRS Foundation alongside TCFD under the International Sustainability Standards Board (ISSB).
Example: A technology company reports on data security, employee diversity, and supply chain labor using SASB standards.
Modeling multiple future outcomes (best case, worst case, likely case) based on different assumptions. Enables risk assessment and contingency planning.
Example: Three revenue scenarios: pessimistic (10% growth), base case (20% growth), optimistic (30% growth).
BI approach enabling business users to create reports, dashboards, and analyses without IT involvement. Requires governed data models, intuitive interfaces, and proper training.
Example: Sales managers build custom pipeline reports using drag-and-drop BI tools without requesting IT support.
Framework for disclosing climate-related risks and opportunities across four pillars: Governance, Strategy, Risk Management, and Metrics & Targets. Increasingly mandated by regulators globally.
Example: A company discloses Scope 1/2/3 emissions, climate scenario analysis, and net-zero commitments under TCFD.
The pricing of goods, services, and intellectual property transferred between related legal entities. Must comply with arm's length principle for tax purposes and requires documentation.
Example: US parent charges 10% markup on services provided to European subsidiary, documented in transfer pricing study.
The process of analyzing differences between actual results and budgeted/forecasted amounts. Identifies favorable and unfavorable variances and explains root causes.
Example: Revenue was $105M vs $100M budget (+$5M favorable) due to higher volume (+$6M) offset by price mix (-$1M).
Testing the impact of changing key assumptions on financial outcomes. Enables understanding of sensitivity to variables like pricing, volume, costs, or external factors.
Example: "What if pricing increases 5%?" shows $2M revenue increase and tests impact on volume and margin.
Cloud-based planning platform (formerly Adaptive Insights), especially popular with Workday HCM customers. Known for ease of use, financial planning, workforce planning, and native Workday integration.
Example: A services company uses Workday Adaptive for headcount planning with direct integration to Workday HCM.
Strategic approach to ensuring the organization has the right people with the right skills at the right time. Integrates headcount planning, succession planning, and skills gap analysis with financial planning.
Example: Workforce plan shows hiring 100 engineers over 2 years, requiring $15M in compensation expense.
Budgeting approach where every expense must be justified from scratch each cycle, rather than using prior year as a baseline. Focuses on efficiency and eliminating unnecessary costs.
Example: Instead of increasing last year's $5M marketing budget by 10%, ZBB requires justifying every dollar based on expected ROI.
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