Glossary terms starting with D

Daily Cash Position

The daily cash position is the actual available cash balance at the end of each business day, tracked to provide real-time visibility into liquidity and to inform short-term cash management decisions.

Data Migration

Data migration is the process of moving data from one system to another, typically when changing accounting software, banks, or payroll providers.

Days Payable Outstanding (DPO)

Days payable outstanding (DPO) is the average number of days a business takes to pay its suppliers and vendors.

Days sales outstanding (DSO)

Days Sales Outstanding (DSO) measures the average number of days it takes to collect payment after invoicing a client.

Debit and Credit

Debits and credits are the two sides of every accounting entry in double-entry bookkeeping.

Debit Balance Analysis

Debit balance analysis examines accounts payable debit balances (amounts owed by vendors rather than to them), identifies causes such as overpayments, return credits, or errors, and resolves them through vendor credit, a refund request, or correction.

Debit Memo

A debit memo is a document issued to increase the amount a client owes, typically for additional services rendered, expenses incurred, or corrections to under-billed amounts.

Debt Management

Debt management is the strategic approach to borrowing, servicing, and repaying business debt.

Debt Service Coverage Ratio (DSCR)

The debt service coverage ratio measures whether a business generates enough operating income to cover its debt payments, including both principal and interest.

Debt to Equity Ratio

The debt-to-equity ratio measures financial leverage by comparing total debt to total equity, indicating how much the business is funded by borrowing versus owner investment.

Dedicated Account Manager

A dedicated account manager is a single point of contact assigned to a client relationship, responsible for understanding the business, coordinating services, answering questions, and ensuring client satisfaction.

Deferral Accounting

Deferral accounting postpones recognizing a payment or receipt until the period it belongs to.

Deferred Compensation

Deferred compensation is an arrangement where a portion of compensation is paid at a future date rather than when earned, often used for tax planning or retirement purposes.

Deferred Cost

A deferred cost is an expenditure recorded as an asset rather than an immediate expense because it will benefit future periods, such as prepaid insurance, setup costs for long-term projects, or capitalized development costs.

Deferred Revenue

Deferred revenue is money a firm has received, or billed, for work it has not yet done.

Deferred Tax Asset

A deferred tax asset represents future tax benefits arising from temporary differences or carryforwards.

Delivery Cost Tracking

Delivery cost tracking records the direct costs of serving each client or project, such as labor, subcontractors, travel, and materials.

Delivery Milestone Billing

Delivery milestone billing is invoicing triggered by the delivery and acceptance of a defined deliverable, such as a signed-off report, a launched system, or an approved design.

Departmental Budget

A departmental budget allocates financial resources and sets spending limits for a specific department or functional area, creating accountability for managing costs within approved levels.

Departmental Overhead Rate

Departmental overhead rate measures overhead costs specific to or allocated to each department, enabling an understanding of each department's true cost structure.

Deposit Applied

A deposit applied refers to transferring a customer deposit from the liability account to offset an invoice.

Depreciation

Depreciation is the systematic allocation of an asset's cost over its useful life, reflecting that long-term assets lose value through use, age, and obsolescence.

Depreciation Schedule

A depreciation schedule is a record tracking each depreciable asset, its cost, its placed-in-service date, its useful life, its depreciation method, and its accumulated depreciation over time.

Depreciation Schedule Management

Depreciation schedule management involves maintaining detailed records of the systematic allocation of fixed asset costs over their useful lives, showing annual depreciation expense, accumulated depreciation, and remaining book value for each asset.

Direct Bill Rate

Direct bill rate is the hourly rate charged directly to clients for consultant time, before any discounts, as specified in rate cards or agreements.

Direct Costs

Direct costs are costs that can be traced to a specific project, client, or product.

Direct Deposit

Direct deposit is an electronic payment method that transfers employee wages directly from the employer's bank account to the employee's bank account on payday.

Direct Expense Ratio

The direct expense ratio measures direct costs as a percentage of revenue, indicating how much of each revenue dollar is spent on direct service delivery.

Direct Labor Cost

Direct labor cost is the compensation expense directly attributable to service delivery, including wages and benefits for staff whose time is charged to client projects.

Direct Method

The direct method is one of two ways to present operating cash flows on the statement of cash flows.

Disengagement

Disengagement is the formal process of ending a client relationship or closing a matter.

Disregarded Entity

A disregarded entity is a business structure that exists for legal purposes but is ignored for federal income tax purposes.

Document Retention

Document retention is the practice of keeping business records for required or recommended periods before destruction.

Draw vs Distribution

A draw is money an owner takes from a business in anticipation of profit, often regularly, while a distribution is a payment of profit allocated to the owner.

Due Diligence

Due diligence is the review a buyer, investor, or lender performs before completing a transaction, to confirm the facts about a business.

Due from Related Party

Due from related party is an asset account showing amounts owed to your business by related parties such as owners, affiliated companies, or family members.

Due to Related Party

Due to related party is a liability account showing amounts your business owes to related parties such as owners, affiliated companies, or family members.

Dunning Letter

A dunning letter is a written notice requesting payment of a past-due amount.

Duplicate Payment

A duplicate payment occurs when you pay the same invoice twice.