Glossary

Question 1

Accountant

Answer

Accountants assess the financial records of a business and turn the transactional data into meaningful information. Accountants typically have a degree.

Question 2

Account reconciliation

Answer

Account reconciliation compares two sets of records to ensure the figures are correct and in alignment. It is useful for explaining the difference between two financial records or account balances.

Question 3

Accrual Based Accounting

Answer

With accrual-basis accounting, revenues and expenses are recorded when services are rendered or products are sold. When the cash is received or paid is irrelevant to when it is recorded. Customer invoices, inventories, and bills to pay are elements of accrual accounting.

Question 4

Bookkeeper

Answer

Bookkeepers record incoming and outgoing transactions within a framework that already exists, like Quickbooks. Their responsibility is to maintain good records. They do not have to be licensed or certified.

Question 5

Balance sheet

Answer

The balance sheet is a representation of a practice’s financial health at a point in time. It includes three major categories: assets, liabilities, and equity accounts.

Question 6

Cash-Basis Accounting

Answer

With cash-basis accounting, a practice records revenues and expenses when cash is received or paid, regardless of when the service/product was sold.

Question 7

Cash flow

Answer

The amount of money coming in and going out of your practice.

Question 8

Chart of accounts

Answer

A chart of accounts is a hierarchical structure of buckets. Each account captures transactions of a similar nature. It details the activity within a designated set of accounts and organizes financial transactions into easily identifiable categories of information.

Question 9

Cloud-based applications

Answer

Cloud-based applications are software that is hosted on remote servers – not on a user’s desktop.

Question 10

Controller

Answer

Finacial controllers typically have a financial accounting background. They are responsible for data integrity and all of the day-to-day financial operations of the business.

Question 11

Cost of professional services

Answer

Also known as the cost of goods sold, or COGS, these expenses are directly associated with providing the services your practice offers, including laboratory, imaging and radiology, dentistry, ancillary products, and grooming and boarding.

Question 12

Certified Public Accountant (CPA)

Answer

Certified Public Accountants, or CPAs, offer tax, financial reporting, and advisory services. CPAs must be licensed and participate in lifelong learning to remain active.

Question 13

Debt financing

Answer

From the capital you need to open a brand new practice or expand your current practice, to refinancing existing debt and reducing monthly bills, debt financing can enable you to move your practice forward.

Question 14

EBITDA

Answer

A company’s earnings before interest, tax, depreciation, and amortization is a useful metric for understanding a business's ability to generate cash flow for its owners and for judging a company's operating performance.

Question 15

Financial statements

Answer

Financial statements highlight your current financial condition, concerns, and opportunities for improvements. It includes a balance sheet, income statement, and the statement of cash flows.

Question 16

Fixed expenses

Answer

Fixed expenses are recurring expenses that do not change. (i.e. Rent, insurance, utilities, building repairs, maintenance, and cleaning.)

Question 17

Income statement

Answer

Also referred to as a profit and loss (P&L) statement, the income statement summarizes the operating activities over a period of time. It includes revenues and expense accounts and nets the two together to present the net income or net loss for the period.

Question 18

Key performance indicators (KPIs)

Answer

A key performance indicator is a quantifiable measure used to evaluate your performance. Some examples of KPIs include total practice revenue; expenses as a percent of total revenue; practice average transaction charge; total active clients; and the number of new clients.

Question 19

Practice Management Software

Answer

Practice Management Software is used to manage several office functions within one location. It can include inventory management, scheduling, custom form templates, and client management.

Question 20

Principal

Answer

Principal is the total amount of money being borrowed. Depending on the structure of the loan, the principal can provide working capital or can be used to fund an acquisition, construction costs, or equipment purchases.

Question 21

Profit and loss statement

Answer

Also referred to as an income statement, it summarizes the operating activities over a period of time. It includes revenues and expense accounts and nets the two together to present the net income or net loss for the period.

Question 22

Return on assets (ROA)

Answer

Return on assets is a profitability ratio that highlights how much profit a practice is able to generate from its assets. ROA is shown as a percentage – the higher the number, the more efficient a business is at managing its balance sheet to generate profits.

Question 23

SaaS (Software as a Service)

Answer

Software provided by a third-party over the Internet.

Question 24

Software Integration

Answer

Software integration refers to the bringing together of two or more software systems into one system to act as a coordinated whole.

Question 25

Statement of cash flows

Answer

The statement of cash flows reports the amount of cash coming in and the amount going out. It is separated into three different categories: operations, financing, and investing.