Glossary terms starting with B

Backlog

Backlog is the value of signed work a firm has not yet delivered or recognized as revenue.

Backlog Aging Analysis

Backlog aging analysis examines contracted but undelivered work by the length of time contracts have been in backlog, identifying stale contracts that may not convert to revenue.

Backup Withholding

Backup withholding is a 24% federal tax withholding required on certain payments when the payee fails to provide a correct taxpayer identification number (TIN) or the IRS notifies the payer of a TIN mismatch.

Bad Debt Expense

Bad debt expense represents the cost of accounts receivable that become uncollectible and is recorded as an expense on the income statement.

Balance sheet

The balance sheet is a financial statement showing what your business owns (assets), owes (liabilities), and the remaining owner value (equity) at a specific point in time.

Balance Sheet Ratio Analysis

Balance sheet ratio analysis examines relationships between balance sheet items to assess financial health, liquidity, leverage, and efficiency.

Balance Sheet Reconciliation

Balance sheet reconciliation is the process of verifying that each balance sheet account balance is accurate and supported by detailed records, typically performed monthly as part of the close process.

Bank Account Analysis

Bank account analysis is a periodic review of bank account fees, services, and activity to ensure the firm is using appropriate account types, minimizing fees, and optimizing banking relationships.

Bank Deposit

A bank deposit is the placement of funds into a bank account.

Bank Feed

A bank feed is an automated connection between a bank or card account and accounting software that imports transactions directly, so they do not have to be typed in.

Bank Feed Integration

Bank feed integration automatically imports transactions from bank accounts and credit cards into accounting software in real time or in daily batches, eliminating manual data entry and enabling continuous reconciliation.

Bank Line Utilization

Bank line utilization measures the percentage of an available credit line currently in use, calculated by dividing the outstanding balance by the total credit limit.

Bank Reconciliation

Bank reconciliation is the process of comparing the company's book balance to the bank statement balance and identifying reconciling items such as outstanding checks, deposits in transit, and bank fees.

Bank Reconciliation Statement

A bank reconciliation statement is a document that compares the cash balance in a company's accounting records to the corresponding balance on its bank statement, identifying and explaining any differences.

Bank Rules

Bank rules are automated categorization instructions in accounting software like QuickBooks or Xero.

Bank Statement Analysis

Bank statement analysis examines transaction patterns, cash flow trends, and balances over time to assess financial health.

Bank Statement Reconciliation

Bank statement reconciliation is the process of comparing the ending balance on a bank statement to the corresponding general ledger cash account balance, identifying and explaining all differences.

Bench Time

Bench time is the period when consultants are available but not assigned to billable client work.

Benchmarking Analysis

Benchmarking analysis compares a business's metrics with a reference point to show where it leads or lags.

Benefits Expense Ratio

The benefits expense ratio shows employee benefits cost as a share of gross payroll.

Bi-Weekly Pay

Bi-weekly pay means employees receive paychecks every two weeks, typically on a consistent day like Friday.

Billable Capacity

Billable capacity is the total potential billable hours available from a firm's workforce, calculated as total work hours minus expected non-billable time, such as vacation, training, administrative tasks, and holidays.

Billable Expense

A billable expense is a cost a firm pays on a client's behalf and passes through on the client's invoice, such as travel, filing fees, or third-party software.

Billable hours

Billable hours are the time employees spend directly working on client projects that can be invoiced to clients.

Billable Utilization

Billable utilization measures the percentage of available working time spent on billable client work.

Billed Hours

Billed hours are the time entries actually invoiced to clients.

Billing Adjustment

A billing adjustment is a modification to a client invoice after initial issuance, including credits for service issues, corrections of errors, retroactive discounts, or additions for scope changes.

Billing Cycle

The billing cycle refers to the frequency and timing of invoice generation for consulting services, including when time is captured, reviewed, approved, and converted into client invoices.

Billing Dispute Resolution

Billing dispute resolution is the process for addressing client disagreements with invoices, including investigating concerns, negotiating resolutions, and documenting outcomes.

Billing Efficiency

Billing efficiency measures how quickly work performed is converted into invoices, typically expressed as the average number of days from service delivery to invoice issuance.

Billing Guidelines

Billing guidelines are written rules for how time, fees, and expenses are recorded and invoiced.

Billing Holdback

A billing holdback is the intentional delay of invoicing for completed work, often due to client requests, dispute resolution, quality concerns, or strategic timing.

Billing Lag

Billing lag is the delay between performing work and sending an invoice.

Billing Narrative

A billing narrative is the written description accompanying time entries on client invoices.

Billing Rate

A billing rate is the price per hour, day, or unit that a firm charges clients for a person's time or a service.

Billing Rate Analysis

Billing rate analysis examines actual billing rates charged across clients, projects, and consultants, comparing them to standard rates and identifying patterns in discounting, rate compression, or rate premiums.

Billing Rate Variance

Billing rate variance measures the difference between standard or target billing rates and actual rates realized, examining patterns across clients, projects, and consultants to understand pricing dynamics.

Billing Realization

Billing realization measures the percentage of worked hours that are actually billed to clients, accounting for time written off, absorbed into fixed fees, or deemed non-billable after the fact.

Blended Rate

Blended rate is a single weighted-average hourly rate combining multiple consultant levels into one simplified price for client billing.

Block Billing

Block billing is recording several tasks in a single time entry with one combined duration, such as four hours for reviewing documents, calling the client, and drafting correspondence.

Board-Ready Financials

Board-ready financials are financial statements and supporting reports prepared to a standard that a board, investors, or lenders can rely on.

Bonus Accrual

Bonus accrual is a liability recorded for employee bonuses earned but not yet paid, recognizing the expense in the period in which they were earned rather than when they are paid.

Bonus Depreciation

Bonus depreciation, which IRS Publication 946 calls the special depreciation allowance, lets a business deduct an additional amount of the cost of qualified property in the first year.

Book Income Vs Tax Income

Book income is profit calculated under GAAP or standard accounting principles for financial reporting.

Book of Business

A book of business is the collection of client relationships and revenue a professional controls or influences.

Book to Bill Ratio

The book-to-bill ratio compares new contract bookings to revenue billed over a period, indicating whether the business is growing, stable, or contracting.

Book Value

Book value is the value of an asset as recorded on the balance sheet, typically calculated as original cost minus accumulated depreciation for fixed assets.

Bookkeeper

A bookkeeper is a professional who records daily financial transactions, reconciles accounts, and maintains accurate financial records for a business.

Bookkeeping

Bookkeeping is the systematic recording, organizing, and tracking of your business's financial transactions daily.

Books Cleanup

Books cleanup is a comprehensive review and correction of accounting records to bring them to an accurate, current state.

Break Even Revenue

Break-even revenue is the sales volume at which total revenue equals total costs, resulting in zero profit or loss.

Break-Even Analysis

Break-even analysis finds the level of revenue, or the number of billable hours, at which a business covers all its costs and earns neither a profit nor a loss.

Break-Even Billing Rate

Break-even billing rate is the lowest hourly rate at which a firm covers all of its costs, with no profit.

Break-Even Point

The break-even point is the level of revenue or activity at which total costs equal total revenue, resulting in zero profit or loss.

Budget Allocation

Budget allocation is the process of distributing available financial resources across departments, projects, initiatives, or expense categories in line with strategic priorities and operational needs.

Budget Cycle Management

Budget cycle management is the systematic process of planning, developing, approving, and monitoring the annual budget, typically spanning several months from initial planning through final approval.

Budget Performance Index

Budget performance index (BPI) measures actual performance against budget as a ratio, typically calculated as actual results divided by budgeted amounts.

Budget Reforecast

A budget reforecast is a revised projection of financial performance created during the fiscal year when actual results or business conditions significantly diverge from the original annual budget.

Budget to Actual Analysis

Budget-to-actual analysis compares planned financial results to actual results, calculating variances to understand performance.

Budget Variance Analysis

Budget variance analysis examines differences between budgeted and actual results, quantifying variances and identifying root causes to inform management action and improve future planning.

Budget vs Actual Analysis

Budget vs actual analysis compares what a firm planned to earn and spend with what it actually earned and spent, and explains the differences, called variances.

Built-In Gain

Built-in gain is appreciation that existed in a C corporation's assets at the moment it converted to an S corporation.

Burden Rate

The burden rate is the additional cost applied to direct labor to account for indirect costs, such as benefits, payroll taxes, overhead, and other expenses associated with employing staff.

Burn rate

Burn rate measures how quickly a business consumes cash, typically expressed as a monthly cash outflow.

Business Credit Card

A business credit card is a card issued to a company or its owner for business spending.

Business Development Cost Analysis

Business development cost analysis encompasses tracking and evaluating all expenses related to winning new business, including sales staff time, proposal development, marketing, client entertainment, and related activities.

Business Efficiency

Business efficiency measures how well a firm converts inputs like time, money, and resources into outputs like revenue and client value.

Business Interruption Insurance

Business interruption insurance replaces income and covers certain continuing expenses when a covered event, such as a fire or storm damage, forces a business to pause operations.

Business License

A business license is government permission to operate a business in a specific jurisdiction.

Business Meal Deduction

The business meal deduction allows businesses to deduct 50% of meal costs when the meal has a clear business purpose.

Business Tax Return

A business tax return is the annual filing that reports income, deductions, and tax liability to the IRS and state tax authorities.

Business Valuation

Business valuation is the process of estimating what a business is worth.

Buy-Sell Agreement

A buy-sell agreement is a legally binding contract that defines how a partner's ownership interest transfers upon specific triggering events such as death, disability, retirement, divorce, or voluntary departure.