Plain-language reference
The executive glossary.
Business, nonprofit, school district, cooperative, and governmental-fund terms translated for practical use.
A
- Accrual accounting
- Records revenue when earned and expenses when incurred, even when cash moves at another time.
- Actual
- The amount or result that has occurred, compared with a budget, forecast, or standard.
- Amendment
- An authorized change to an existing agreement, usually required to be in writing.
- Asset
- A resource controlled by the organization that has present or future value.
- Audit right
- A contractual or legal right to inspect specified records or controls.
B
- Balance sheet
- A point-in-time statement of assets, liabilities, and equity or net position; also called a statement of financial position.
- BATNA
- Best alternative to a negotiated agreement—the course of action available if no deal is reached.
- Break-even
- The point at which relevant revenue equals relevant cost; in a cooperative, a planning tool rather than a profit-maximization goal.
- Budget
- An authorized financial plan for a defined period.
C
- Cash-flow statement
- A statement explaining cash changes from operating, investing, and financing activities.
- Cash reserve
- Liquid resources intentionally held for timing needs, shocks, or policy goals.
- Confidentiality
- A duty to protect specified nonpublic information from unauthorized use or disclosure.
- Contractor
- A person or organization providing services under contract rather than as an employee; classification depends on law and facts, not label alone.
- Cost allocation
- A method for assigning shared costs to districts, programs, funds, or services.
- Cure period
- Time allowed to correct a breach before specified remedies or termination.
- Current asset
- An asset expected to be used, converted to cash, or realized within the normal operating cycle or one year, depending on the reporting framework.
- Current liability
- An obligation expected to be settled within the normal operating cycle or one year, depending on the reporting framework.
- Cycle time
- Total elapsed time from the beginning to the end of a process.
D
- Dashboard
- A small set of decision-oriented indicators shown with definitions, targets, trends, explanations, and actions.
- Data security
- Administrative, technical, and physical safeguards that protect information from unauthorized access, change, loss, or disclosure.
- Decision right
- Authority to recommend, decide, execute, be consulted, or be informed about a decision.
- Deliverable
- A defined output a party or role must produce.
- Direct cost
- A cost that can be traced to a specific district, service, program, or other cost objective.
E
- Encumbrance
- A budgetary commitment that reserves capacity for an approved obligation such as a purchase order.
- Entire agreement
- A clause stating that the signed contract documents replace earlier discussions or representations about the deal.
- Equity
- In business reporting, assets minus liabilities; governmental and nonprofit reporting often uses net position or net assets instead.
- Expense
- The cost of resources consumed or obligations incurred during a period.
F
- Fixed cost
- A cost that does not change quickly with service volume within a relevant range.
- Force majeure
- A contract clause allocating consequences of specified extraordinary events outside a party’s reasonable control.
- Forecast
- Management’s current estimate of future results based on updated assumptions.
- Fully loaded employee cost
- Salary plus employer taxes, benefits, retirement, insurance, equipment, stipends, development, and other employer-paid costs.
- Fund balance
- The residual in a governmental fund, classified by the degree of constraint; it is not automatically the same as cash available to spend.
G
- Governing law
- The jurisdiction’s law selected to govern an agreement.
- Governance
- The system by which a governing body sets purpose, policy, authority, oversight, and accountability.
I
- Income statement
- A period statement of revenue and expense; analogous nonprofit or governmental statements may use different names.
- Indemnification
- A contractual allocation under which one party agrees to protect another from specified claims or losses; it requires legal and insurance review.
- Indirect cost
- A shared cost that supports more than one district, service, or program and must be allocated on a reasonable basis.
- Inherent risk
- Risk level before considering controls.
- Intellectual property
- Legally protected creations and rights such as copyrights, patents, trademarks, and trade secrets.
K
- Key performance indicator (KPI)
- A measure selected because it signals performance important to an objective or decision.
L
- Lagging indicator
- A measure of a result that has already occurred.
- Leading indicator
- A measure that may provide early warning or predict a later result.
- Liability
- A present obligation expected to require resources to settle.
- Limitation of liability
- A contract term that caps or excludes specified damages or exposure and requires qualified legal and insurance review.
M
- Material variance
- A difference large or important enough to affect understanding, decisions, or required action.
- Modified accrual
- A governmental fund accounting basis focused on current financial resources, with recognition rules that differ from full accrual.
N
- Net position
- The residual of assets and deferred outflows after liabilities and deferred inflows in governmental reporting.
- Notice provision
- A clause specifying the required method, address, and timing for formal contractual notices.
O
- Objective criterion
- A credible external or agreed standard used to evaluate options in a negotiation.
- Order of precedence
- A clause specifying which contract document controls if documents conflict.
P
- Process owner
- The person accountable for end-to-end performance of a repeatable process.
R
- RACI
- A responsibility map showing who is Responsible, Accountable, Consulted, and Informed.
- Receivable
- An amount owed to the organization but not yet collected.
- Records retention
- Rules and practices governing how long records are kept and how they are protected and disposed of.
- Reservation point
- The least favorable negotiation outcome acceptable before choosing the BATNA.
- Residual risk
- Risk remaining after controls are considered.
- Restricted resource
- A resource whose use is constrained by law, grantor, donor, agreement, or other authoritative condition.
- Revenue
- Resources earned or recognized under the applicable accounting basis; not always the same as cash received.
- Risk appetite
- The amount and type of risk an organization is willing to pursue or retain in seeking objectives.
- Risk register
- A structured record of risks, ratings, controls, owners, indicators, and actions.
S
- Scenario
- A coherent set of assumptions used to explore a materially different future condition.
- Scope of services
- The contract section defining included and excluded work.
- Service level
- A measurable standard for service performance, availability, response, or quality.
- Standard operating procedure (SOP)
- A documented routine describing purpose, roles, steps, controls, exceptions, and review.
- Step-fixed cost
- A cost stable within a range that increases when capacity crosses a threshold, such as adding another position.
- Subcontractor
- A third party engaged by a contractor to perform part of the work; approval, credentials, privacy, insurance, and accountability may apply.
T
- Termination for cause
- Contract termination based on a specified breach or failure.
- Termination for convenience
- Contract termination without breach, usually on stated notice and subject to wind-down terms.
U
- Unrestricted resource
- A resource not externally restricted to a specified purpose, though budgets, policy, governance, ethics, and public-purpose limits still apply.
V
- Variable cost
- A cost that changes with service volume or another activity driver.
- Variance
- The difference between a plan, standard, or forecast and an actual or revised amount.
- Venue
- The location or court in which disputes must be brought.
W
- Working capital
- Generally, current assets minus current liabilities; a short-term financial-capacity measure.