Glossary terms starting with F

Fee Agreement

A fee agreement is a document specifying how you will bill clients for your services.

Fee Cap

A fee cap is a maximum amount the client will pay for a matter regardless of actual time and expenses incurred.

Fee Leakage

Fee leakage is revenue lost between work performed and fees collected.

Fee Realization Rate

Fee realization rate measures the percentage of standard fees actually collected, calculated by comparing actual revenue to what would have been earned at standard rates.

Fee Recovery

Fee recovery is collecting more than your standard hourly rate on work performed, often through write-ups or premium billing.

Fee Schedule

A fee schedule is a comprehensive document listing standard fees for all services, deliverables, or activities a firm provides, serving as the basis for proposals, contracts, and client communications.

Fee Sensitivity Analysis

Fee sensitivity analysis examines how changes in pricing affect client decisions, win rates, and overall revenue, helping determine optimal pricing levels.

FICA

FICA (Federal Insurance Contributions Act) is the federal payroll tax that funds Social Security and Medicare, paid by both employees and employers.

File Retention

File retention refers to how long you keep client files after a matter concludes.

Filing Deadline

A filing deadline is the date by which a tax return or other required document must be submitted to avoid penalties.

Final Paycheck

A final paycheck is the last wage payment to a departing employee, which must include all earned wages, accrued vacation (in most states), and any other owed compensation, with timing requirements varying by state and termination type.

Finance Charge

A finance charge is the cost of borrowing or of paying late, usually interest or fees added to an unpaid balance.

Finance Pod

A finance pod is a dedicated team of finance professionals assigned to one client's account.

Financial Benchmarking

Financial benchmarking compares a firm's financial metrics with a reference point, such as its own history, peer firms, or published industry data, to judge whether performance is strong, average, or lagging.

Financial Close Calendar

A financial close calendar documents all tasks, deadlines, and responsibilities required to complete the period-end close, organized in sequence with specific due dates.

Financial Close Cycle

The financial close cycle is the number of business days required to complete the month-end close and produce accurate financial statements after the month-end.

Financial Compilation

A financial compilation is a CPA service in which the accountant prepares financial statements based on information provided by management, without verifying the underlying data or providing any assurance.

Financial Controls

Financial controls are policies and procedures designed to protect business assets, ensure accurate financial reporting, and prevent fraud or errors.

Financial Covenant

A financial covenant is a condition in a loan or credit agreement requiring the borrower to maintain certain financial ratios or meet specific financial targets, with violations potentially triggering default provisions.

Financial Dashboard

A financial dashboard is a visual display of key financial metrics and indicators, providing a at-a-glance view of business performance.

Financial Health Score

A financial health score is a composite metric that combines multiple financial indicators into a single measure of overall financial condition, providing a quick assessment of whether the firm is financially healthy, stressed, or at risk.

Financial Projection Methodology

The financial projection methodology defines the approach, assumptions, and calculations used to create forward-looking financial projections, ensuring consistency and enabling comparisons across periods.

Financial Review

A financial review is a CPA service that provides limited assurance that the financial statements are free from material misstatement.

Financial Statement Preparation

Financial statement preparation is the process of compiling, reviewing, and finalizing the balance sheet, income statement, and cash flow statement from accounting records.

Financial Statement Review

Financial statement review is the process of examining prepared financial statements for accuracy, completeness, and reasonableness before distribution or use for decision-making.

Financial statements

Financial statements are formal reports summarizing your business's financial performance and position.

Financial Systems Audit

A financial systems audit is a comprehensive review of a professional service firm's accounting setup, software configuration, data accuracy, and process effectiveness, conducted during onboarding a new finance partner or to diagnose persistent problems.

Financing Activities

Financing activities are cash flows between a business and its owners or creditors.

Firm Fixed Price Contract

A firm-fixed-price contract establishes a set price for defined deliverables regardless of actual costs incurred, transferring financial risk from the client to the consulting firm.

Fiscal Quarter

A fiscal quarter is three months used for financial reporting and tax purposes, with four quarters comprising a fiscal year.

Fiscal Year

A fiscal year is the 12-month period a company uses for accounting and financial reporting purposes, which may or may not align with the calendar year.

Fixed Asset Disposal

Fixed asset disposal is the process of removing assets from the books when they are sold, scrapped, or otherwise retired, including recording any gain or loss on disposal based on the difference between proceeds and book value.

Fixed Assets

Fixed assets are long-term tangible property a business owns and uses in operations, expected to provide benefit for more than one year.

Fixed Charge Coverage Ratio

Fixed charge coverage ratio measures a firm's ability to pay all fixed obligations (not just debt service, but also rent, lease payments, and other committed costs) from operating earnings.

Fixed costs

Fixed costs are business expenses that remain relatively constant regardless of revenue or activity level.

Fixed Fee Profitability

Fixed-fee profitability measures the margin achieved on projects priced at a fixed amount rather than on an hourly basis, by comparing fixed-fee revenue to actual costs incurred.

Fixed-Fee Engagement

A fixed-fee engagement charges clients a predetermined total price for defined deliverables regardless of hours actually worked.

Fixed-Fee Project

A fixed-fee project is an engagement where the client pays an agreed total price for a defined scope of work, regardless of the hours the firm spends.

Flash Report

A flash report is a preliminary financial summary produced within days of the month-end, before the formal close is complete.

Flat Fee Engagement

A flat fee engagement is an agreement to perform a defined scope of work for a fixed price regardless of time spent.

Foreign Qualification

Foreign qualification is registering your business to operate in a state other than the one where it was formed.

Form 1040-ES

Form 1040-ES is the IRS form used to calculate and pay quarterly estimated taxes for self-employed individuals and business owners.

Form 1096

Form 1096 is the transmittal form that accompanies paper 1099 filings to the IRS.

Form 1099-K

Form 1099-K reports payments processed through payment cards and third-party payment networks like PayPal, Stripe, or Square.

Form 1099-MISC

Form 1099-MISC reports miscellaneous income payments to non-employees.

Form 5500

Form 5500 is the annual report employee benefit plans file with the Department of Labor, covering plan finances, participant counts, and compliance.

Form SS-4

Form SS-4 is the application for an Employer Identification Number.

Form W-2c

Form W-2c corrects errors on previously filed W-2 forms.

Form W-4

Form W-4 tells employers how much federal income tax to withhold from employee paychecks.

FP&A

FP&A stands for Financial Planning and Analysis, the function responsible for budgeting, forecasting, financial modeling, and strategic analysis.

Fractional CFO

A Fractional CFO is a senior financial executive who works with your business on a part-time, contract basis, providing strategic financial leadership without the cost of a full-time hire.

Franchise Tax

Franchise tax is a state tax on businesses for the privilege of operating or being organized in that state.

Fraud Prevention

Fraud prevention encompasses policies, procedures, and controls designed to deter, detect, and respond to fraudulent activity.

Free Cash Flow (FCF)

Free cash flow is the cash remaining after a business pays operating expenses and capital expenditures.

Full Time Equivalent

Full-time equivalent (FTE) converts the hours worked by all employees into the number of full-time employees those hours represent.

Fully Loaded Cost

Fully loaded cost is the total cost of an employee or resource, including salary plus benefits, payroll costs, equipment, software, and a share of overhead.

FUTA

FUTA (Federal Unemployment Tax Act) is an employer-paid federal tax that funds unemployment compensation programs; it currently is 6.