Precanto Glossary

During an accounting close, a company complies and finalizes the financial records for a specific time period, usually at the end of a month, quarter, or year. This involves recording all transactions, reconciling accounts, preparing financial statements, and ensuring accuracy and completeness of the financial data.

Changes made to financial records or statements to correct errors, account for omitted transactions, or reflect necessary updates. Adjustments are often made to ensure the accuracy and reliability of the financial information presented.

An allocated expense are expenses that are assigned or distributed to different departments or projects within an organization. This allocation is based on predetermined methods or formulas to distribute expenses among various entities or to track and assign costs to specific business activities.

An Applicant Tracking System (ATS) is a software application that facilitates the recruitment and hiring process of the organizations. It's designed to streamline and manage various flows of the recruitment workflow, from posting job openings and receiving applications to screening candidates and tracking their progress throughout the hiring process. Some examples of ATS systems include BambooHR, Greenhouse, and SmartRecruiters.

Inbound budget owner requests to push/pull/swap expenses.

Attrition refers to the gradual or natural reduction in the size or strength of an organization's workforce over time.

Budget versus actuals is the process of comparing the budget to the actuals of an organization incurred during a specific period. BVA allows an organization to assess the drivers of the variance between the budget and to make informed decisions to improve financial planning.

CAPEX refers to significant, long-term investments a company makes to acquire, improve, or maintain physical assets, such as property, equipment, and machinery. These investments are intended to facilitate growth and enhance the company’s operational efficiency. CAPEX is typically recorded as an asset on the balance sheet and is deprecated or amortized over its useful life.

Classification, in the context of machine learning and data analysis, is a supervised learning technique used to categorize or assign data points to predefined classes or categories based on their features or attributes. The primary goal of classification is to learn a mapping or decision boundary that separates different classes in a dataset, enabling the model to make predictions about the class membership of new, unseen data points.

Committed spend refers to the portion of the budget or financial plan that has been allocated to specific obligations or commitments. These include long-term contracts, service agreements, or ongoing projects. Understanding a company’s committed spend gives a clear picture of financial commitments and helps in managing cash flow and budgets.

A contractor is an individual or entity hired by a company or organization on a temporary basis to provide specific goods or services. Contractors typically work for a fixed duration or until a particular project is completed.

Correlation is a measure of relationship between two mathematical variables or measured data values. It assesses the strength and direction of a relationship between variables. The Peaerson correlation coefficient is a common metric that measures the linear relationship between two variables.

Data Science is an interdisciplinary field that combines techniques from statistics, computer science, data analysis, and domain knowledge to extract insights and knowledge from data. It involves collecting, cleaning, processing, analyzing, and interpreting large and complex datasets to solve real-world problems, make informed decisions, and discover patterns or trends that may not be apparent through traditional methods.

Direct Headcount Expense" typically refers to the total cost associated with a company's employees who are directly involved in the production, delivery, or provision of goods or services. This term is commonly used in financial and accounting contexts to categorize and analyze expenses related to the core workforce responsible for generating revenue.

Distributed learning is a computational approach in machine learning that utilizes training across multiple devices or nodes. This allows multiple devices to collaborate and analyze large data sets.

EBITDA is a financial metric used to evaluate a company’s net profitability and operating performance. This metric looks at a company’s earnings before non-cash expenses like interest, taxes, deprecation, and amortization

An enterprise performance management system (EPM) is a software a business or organization deploys to plan, manage, and analyze the business or organization’s performance. An EPM often contains budgeting, forecasting, financial consolidation, and reporting functionalities. Some examples of EPM systems include Anaplan, OneStream, and Oracle ERP.

An Enterprise resource planning system, or ERP, is a software solution that a business or organization deploys to manage various business processes and resources. Functionality of an ERP include automated finance, human resources, supply chain, customer relations, and more. Some examples of ERP systems include NetSuite, SAP Business One, and Acumatica.

Exploratory data analysis, or EDA, is a method of analyzing data. Often involving statistical and visual techniques, EDA is used to identify underlying patterns, relationships, and outliers. Using EDA canhelp form hypotheses, validate assumptions, and make informed decisions.

A forecast is a static projection of a plan at a single point in time. In the FP&A space, It is often related to estimates under each category of expenses for future time periods.

A Full-time equivalent, or FTE, is unit of measurement that represents the total number of hours regularly worked by a company or organization’s full-time employees. An FTE is used to assess the company’s allocation of resources by standardizing and comparing the workload done by different employees working varying hours.

A General Ledger (GL) is a core accounting document used in double-entry accounting systems to track all financial transactions of a business. It serves as a comprehensive record of an organization's financial activities, providing a complete and organized overview of its accounts, assets, liabilities, revenues, and expenses. The General Ledger is a fundamental component of a company's financial accounting and reporting processes.

Generative AI, short for Generative Artificial Intelligence, refers to a subset of artificial intelligence (AI) that focuses on creating or generating new data, content, or artifacts that are not explicitly programmed but rather produced by algorithms

It's a software solution or a suite of tools that are designed to streamline and automate various human resources (HR) functions within an organization. HRIS systems are used to manage employee data, HR processes, and data-driven decision-making. Some examples of HRIS systems include Workday, BambooHR, and ADP.

A hierarchy is a representation of relationships between sets of data where one set of data is strictly of higher rank than the other, often described as a parent-child relationship and represented as a tree-form structure.

An indirect headcount expense is the costs are not associated directly with the manufacturing or production of a product or delivery of a service. Examples of indirect headcount expenses include human resources, finance, marketing, administrative staff, and other  support roles.

A large language model, or LLM, is an advanced artificial intelligence model that uses deep learning techniques, large amounts of text data, and statistical models, to understand and generate human-like language. Some use cases of LLMs include summarizing, translating, predicting, and generating content.

Machine Learning (ML) is a subfield of artificial intelligence (AI) that focuses on the development of algorithms and models that enable computer systems to learn and make predictions or decisions without being explicitly programmed. Instead of relying on explicit instructions, ML systems learn from data and improve their performance over time.

A Machine Learning Model is a computational representation or a mathematical algorithm that is designed to recognize patterns, make predictions, or solve problems based on data. In machine learning, models are trained on historical data to learn the underlying patterns and relationships within that data. Once trained, these models can be used to make predictions or decisions on new, unseen data.

Online Analytical Processing, often abbreviated as OLAP, is a category of computer processing that enables users to interactively analyze and explore multidimensional data, typically for business intelligence (BI) and decision-making purposes. OLAP systems are designed to provide fast and flexible access to data, allowing users to perform complex queries, aggregations, and data slicing and dicing operations.

Operating income, often called operating earnings or earnings before interest and tax (EBIT), is a profit metric representing earnings from the core business operations. It provides insights into the performance and sustainability of a company. Operating income is calculated as gross profit  less operating expenses

Optimization is the systematic process of adjusting inputs to a mathematical model to converge to an optimal solution. In the cross-sectional space of FP&A and Machine Learning, optimization is used to assess weightage of variables that arrive at an optimal solution within the constraints of budgets and realistic possibilities.

Operating expenses, or OPEX, refers to expenses a company incurred to continue day-to-day operating activities that arecore to the business functions. These expenses can include rent, utilities, employee costs, insurance, etc.

A combination of actuals posted plus committed spend plus predicted spend for a quarter/year.

The estimation of an uncertain event, using a combination of business intelligence and mathematical and statistical models. The output of predictive analytics will vary depending on the model type.

Predicted hiring refers to the using historical data to derive analytics relate discipline of using historical data to derive analytics that is related to hiring practices and metrics. 

A prescriptive recommendation uses a combination of model outputs and business intelligence to arrive at a decision suggestion that helps the future of the business converge to an optimal solution.

Current status of financial records and where you sit compared to forecast

The profit and loss statement, or P&L, is a financial report that summarizes a company or organization’s revenues and expenses for a specific period. The P&L allows a company to have a view of the profits and losses incurred in a given period

A budgeted expenses from a future period pulled to a more recent period

A budgeted expense from a near future period pulled to an extended future period

Regression is a statistical modeling technique used for analyzing the relationship between a dependent variable and one or more independent variables. It is a fundamental tool in statistics and data analysis, often used for prediction, hypothesis testing, and understanding the relationships between variables.

A relational database is a type of database that stores data in a structured format with tables, rows, and columns. The data stored in a relational database have pre-determined relationships with other data items typically in the form of primary and foreign keys. Examples of relational databases include MySQL, Oracle, and PostgreSQL.

Often shortened to “req”, a requisition is the formal documentation to request a new employee for Human Resources to hire. Closed reqs refer to the requisitions that have been fulfilled or canceled. Open reqs refer to the requisitions that have yet to be filled.

Role-based access controls, or RBAC,is a security feature that controls and limits permissions to specific roles. With RBAC, data can be protected, secured, and restricted from unauthorized roles, while having the ability to assign specific roles access to indented data and action permissions

R-squared (R²), is a statistical measure used to assess the goodness of fit of a regression model. In other words, it quantifies the proportion of the variance in the dependent variable that is explained by the independent variables in the model. R-squared is a key metric in regression analysis and helps determine how well the model fits the observed data.

Scenario planning is a management technique that strategically analyzes uncertainties through various hypothetical situations with the goal of providing insights to decision-makers. Using scenario planning can allow an organization to make long-term and flexible planning decisions.

Running a potential scenario to compare different realities

Stock based compensation is the process a company deploys that grants shares or stock options to employees. The goal of acompany awarding stock based compensation to its employees is to align employees interest with the interest of the company.

A sub-ledger, or subsidiary ledger, is an accounting record that contains the details behind entries in the general ledger. Sub-ledgers are used totrack specific transactions and categories of accounts in a more granular view.

An expense getting swapped/interchanged for another expense either within the same category or across categories and across quarters/years.

A time series is an interval of time used to analyze a sequence of data points or observations. Examples of time series intervals include years, months, days, or even hours.

The forecasted employees that realistically will be hired based on parameters of time and budget

A trial balance is a financial statement that compiles all general ledger accounts of a company or organization into debits and credits for a specific period of time. This essential step in the accounting process ensures accounting entries are accurate and balanced. A trial balance is often prepared at the end of the accounting period.

True-ups refer to end-of-period adjustments made to financial records to reconcile differences between estimated or budgeted amounts to ensure accuracy.