Financial Management Flashcards
Assets - Current
Any asset reasonably expected to be sold, consumed, or exhausted through the normal operations of the business within the current fiscal year.
Assets - Fixed
Any asset that cannot easily be converted to cash
Benchmark
Measurable quantities for a given period of time that are considered industry standards
Benchmarking
The process by which a business compares itself to others.
Average Transaction Charge (ATC)
Total revenue of a time period divided by the total number of transactions in that period.
Audit Trails
A record of financial transactions form which an accountant can reconstruct the sequence of events.
Asset Control
A trust which can be used to maintain control over the trust assets for a designated period of time, which may survive death.
Asset - Intangible
Any asset that lacks physical substance and is usually very hard to evaluate.
Capital
The rights (equity) of the owners in a business enterprise.
Balance Sheet
Also referred to as the “statement of financial conditions,” the balance sheet summarizes the assets, liabilities, and owner’s equity at a particular date.
Bank Statement
Summary of financial transactions which have occurred over a given period on a bank account.
Capital acquisitions
One entity acquiring control of another entity
Break-Even Analysis
An analysis that is used to determine when your business will be able to cover all of its expenses and begin to make a profit.
Budget
A financial projection used to estimate and control the results of future business operations
Certified Public Accountant (CPA)
Accounting professional who has attained certification by passing a comprehensive exam, and maintained with continuous professional education, and subscribing to a heightened level of business ethics.
Cash Flow Statement
Financial report on the sources of cash and uses of cash
Cash Budget
An estimate of cash receipts and disbursements for a specific period of time. Used to determine whether a business has enough money to maintain standard operations. Also helps determine if cash money is being used in unproductive capacities.
Cash Basis
Accounting method that measures income when cash is received and expenses when cash is spent.
Cash Accounting
A system that recognizes income only when cash is collected from a sale, and recognized expenses when cash is actually paid for goods and services received.
Client discounts
A reduction in price for services or products rendered to an individual.
Checks and Balances
Procedures set in place to reduce mistakes of improper behavior.
Chart of Accounts
A systematic listing of all account names and numbers used by a company
Credit Policy
Clear, written guidelines that set the terms and conditions for supplying goods and services on credit, customer qualification criteria, procedure for making collections, and steps to be taken in case of customer delinquency.
Cost of Living (COL)
Theoretical price index that measures relative cost of living over time or regions. It is an index that measures differences in the price of goods and services, and allows for substitutions with other items as prices vary.
Consumer Price Index (CPI)
An index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period.
Commission Pay Garnishments
Any legal or equitable procedure through which some portion of an employee’s earnings is required to be withheld by an employer for the payment of commission-based pay on services or products that have not been collected.
Collections
The act or process of collecting funds owed to the business or organization
Deposits
A sum of money placed or kept in a bank account, usually to gain interest
Deductions
Business expenses or losses that are legally permitted to be subtracted from the gross revenue from a business when computing its taxable income
Debt
A duty or obligation to pay money, deliver goods, or render services under an express or implied agreement
Day End Procedures
A fixed, step-by-step sequence of activities or course of action (with a definite start and end points) that must be followed in the same order to correctly perform a task.
Differential Pay
A compensating differential, which is also called a compensating wage differential or an equalizing difference, and is defined as the additional amount of income that a given employee must be offered in order to motivate them to accept a given undesirable job.
Depreciation
The process of allocating the cost of an asset across the time period for which it provides benefit (known as the assets depreciable or useful life).
Exempt Worker
An employee who is exempt from minimum wage and over-time requirements of the Fair Labor Standards Act. The FLSA clearly defines what employees are eligible for exempt status.
Equity
The owner’s claim on the practice’s assets.
Embezzlement
The fraudulent appropriation of funds or property entrusted to your care, but actually owned by someone else.
Electronic Funds Transfer (EFT)
The process of moving transactions funds from one bank to another via the Automated Clearing House of the Federal Reserve Network.
Dunning Letters
A notification sent to a customer, stating that the customer is overdue in paying an account receivable to the sender.
Direct Deposit
The electronic transfer of a payment directly from eh account of the payer to the recipient’s account.
Discounts (A/P)
A reduction in price for services or products.
Finance Fees
Any fee representing the cost of credit, or the cost of borrowing.
Federal Income Tax
A tax levied by the U.S. Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts and other legal entities.
Finance Charge
Money charged for payments that extend beyond an agreed-upon time limit; the amount charged is governed by the usury laws in the State within which you practice.
Experience Rating
A system used by insurance companies in the U.S. to set the premium to be paid by the insured on the basis of risk to the company providing the insurance.
Expenses
Measured outflow of services and/or goods, matched to the revenue generated for the outflow.
Pro-Sal
A compensation structure for associates which combines a guaranteed salary base with a percentage of an associate’s production.
Pro-Forma Budget
A projection or estimate of what may result in the future, given current assumptions and predictions.
Sales Tax
A tax on sales or on the receipts from sales
Salary Compensation
When employees in lower-level jobs are paid almost as much as their colleagues in higher-level jobs, including managerial positions
Shareholder’s equity
A practice’s total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders’ equity represents the amount by which a practice is financed through common and preferred shares.
Shareholders
An individual or institution (including a corporation) that legally owns a share of stock in a public or private corporation.
Service Charges
An extra charge assessed for a service.
Semi-variable costs
Expenses which contain both a fixed cost component and variable cost component. The fixed cost element is part of the cost that needs to be paid irrespective of the level of activity achieved by the entity.
Statement reconciliation
A form that allows individuals to compare their personal bank account records to the bank’s records of the individual’s account balance in order to uncover any possible discrepancies.
Stock
The goods or merchandise kept on the premises of a veterinary practice that are available for sale or distribution
Short-Range Planning
The process of setting smaller, intermediate milestones to achieve within closer time frames when moving towards an important overall goal. Many business operators will engage in short term planning that typically covers time frames of less than one year.
Time Clock Systems
Methods for collecting employee hours worked during the pay period.
Third Party Lenders
Outside lending services for clients with large balances, offering the option to pay back that balance over time
Succession Planning
Succession planning is a process for identifying and developing new leaders who can replace old leaders when they leave, retire or die. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles.
Strategic Planning
An organization’s process of defining its strategy, or direction, and making decision on allocating its resources to pursue this strategy
Assets (current, fixed, intangible)
Current = short-term assets such as general inventory, cash and accounts receivable. Fixed = long-term assets such as land, buildings, and equipment. Intangible = not physical in nature such as copyrights and goodwill.
Aging
A particular period of time, as distinguished from other periods.
Amortization
Periodic expense attributed to the decline in usefulness of intangible assets over its estimated useful life.
After-tax
Relating to income that remains after the deduction of taxes due.
Assets
Things of value owned by a business enterprise, such as cash, accounts receivable, and equipment.
Unemployment Taxes
Taxes paid by employers into a federal or state fund to pay benefits to employees who are terminated.
Transaction Receipt
A written record of a financial transaction
Transaction
An instance of buying or selling something; a financial transaction
Time Off Accrual
Benefits’ coverage earned by an employee, usually based on years of service with an employer. Accrued benefits may include vacation, sick, or personal time off.
Timely Deposits
Deposits should be made as often as possible, preferably daily. Failing to make timely deposits increases the risk of error and the risk of misappropriation of funds.
Volume
The quantity or number of goods sold or services sold in the normal operations of a company in a specified period. Example: High volume or low volume practice regarding length and number of appointments.
Variable Costs
Expenses that increase or decrease as a dollar amount in direct relation to the volume of practice activity.
Use Tax
A sales tax on purchases made outside one’s state of residence on taxable items that will be used, stored or consumed in one’s state of residence and on which no tax was collected in the state of purchase.
Unemployment Insurance
A source of income for workers who have lost their jobs through no fault of their own.
Hourly/Salary Compensation
Hourly compensation must include overtime pay for all time worked in excess of 40 hours per week. Salary compensation is exempt from the overtime laws.
Flexible/Variable Expenses
Costs that may be manipulated in amount, or eliminated by not engaging in the activity that incurred the expense.
Fixed Expense/Cost
A cost that does not change with an increase or decrease in the amount of goods or services produced.
Fixed Costs
Expenses that have to be paid by a company, independent of any business activity.
Imprest Account
A fund or cash reserve that is maintained at constant level for lengthy periods of time.
Income
A gain or recurrent benefit, usually meausred in money
Rent
A tenant’s regular payment to a landlord for the use of property or land.
Revenue
All sales of the practice for goods and services
Reimbursement
The act of compensating someone for an expense
Generally Accepted Accounting Principles (GAAP)
A framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all publicly traded U.S. corporations.
General Ledger
The collection of all Assets, Liability, Equity, Revenue, and expense accounts form which the financial statements are derived.
Fraud
An act or course of deception; intentional concealment of the truth to gain an unlawful or unfair advantage.
Return on Investment (ROI)
A measure of profitability used to refer to a single project and expressed as a ratio. Formule = revenue generated divided by the costs of assets consumed for the project.
Payroll Tax
Imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.
Production Pay
Productivity-based pay rewards employees based on measurements of the quantity of work and outputs.
Gross Domestic Products (GDP)
The total value of goods produced and services provided in a country during one year.
Petty Cash
A small fund of cash maintained for incidental expenditures.
Perceived Value
The worth that a product or service has in the mind of the consumer. The consumer’s perceived value of a good or service affects the price that he or she is willing to pay for it.
Present Value of Money
The current monetary value of some defined investment return, given a specified rate of return
Practice Management Software
A category of healthcare software that deals with the day-to-day operations of a veterinary practice
Wages
A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee
W-4
A W-4 form is a form completed by an employee to indicate his or her tax withholding preferences to the employer.
Pre-Tax
Considered or calculated before the deduction of taxes.
Profit Centers
A section of the practice that can be assessed in terms of its revenues and expenses.
Receipts
A written acknowledgment that something of value has been transferred from one party to another.
Write-Offs
A cancellation from an account of a bad debt or worthless asset.
Record Transfer
The transfer of the legal and physical custody of permanent records
Reconcile
Reconciliation is an accounting process used to compare two sets of records to ensure the figures are in agreement and are accurate. It is the kye process used to determine whether the money leaving an account matches the amount spent.
Paid Time Off (PTO)
An employee benefit that provides a bank of hours in which the employer pools sick days, vacation days, and personal days allowing employees to use as they need or desire.
Owernship Equity
The portion of a business’s equity which remains for the owners after all liabilities have been paid and all other creditors have been reimbursed.
Overtime
Hours worked in excess of the maximum regular number of hours fixed by a statute, union contract, or custom.
Operating Income
Revenues or income resulting from veterinary activities and veterinary related sales, such as pharmacy sales. Does not include non-veterinary related income such as interest income.
Historical Data
Past periods data, usually used as a basis for forecasting future trends.
Interest Rate
Typically noted on an annual basis, known as the annual percentage rate (APR)
Internal auditing controls
Processes in place to provide management reasonable assurance that no practice resources are being lost, that financial reporting is reasonably accurate, and that profitability targets are achieved.
Internal Control
All measures, systems, and protocols used by a business to prevent errors, waste, and fraud; to ensure the reliability of accounting data, and promote policy compliance.
Operating Expenses
The expenses of a business not directly associated with the making of a product, or providing of a service, such as administrative, technical, or selling expenses.
Income Statement
Also known as the profit and loss statement, a report on financial performance that covers a period of time and reports income and expenses during that period.
Income Tax
Tax levied by a government directly on income, especially an annual tax on personal income.
Incorporated
Formed into a legal corporation
Inflation Rate
The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
Limited Liability Company (LLC)
A limited liability company is a corporate structure whereby the members of the company are not personally liable for the company’s debts or liabilities.
Liquid Assets
Assets that can be converted into cash quickly and with minimal impact to the price received.
Long-Range Planning
The exercise aimed at formulating a long-term plan, to meet future needs estimated usually by extrapolation of present or known needs
Interest Charges
The cost of borrowing money, assessed by the lender over time, usually expressed as a percentage.
Interest Fees
The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
Net 10/30
Payment terms on an invoice. On a net 10, the net amount is due within 10 days of the date of the invoice. A net 30 would be within 30 days.
