Glossary terms starting with S

S Corporation Tax

S corporation tax treatment allows a corporation to pass income, losses, deductions, and credits through to shareholders for federal tax purposes.

S-corporation (S-Corp)

An S-Corporation is a tax classification allowing business profits and losses to pass through to owners' personal tax returns while maintaining limited liability protection and enabling tax savings through salary-plus-distribution income splitting.

Safe Harbor

Safe harbor is a tax provision that protects taxpayers from penalties if certain conditions are met, commonly applied to estimated tax payments, where paying 100% of the prior year tax or 90% of the current year tax avoids underpayment penalties.

Salary vs Hourly

Salary is a fixed amount paid regardless of hours worked, typically expressed as an annual figure divided into pay periods.

Sales Pipeline

A sales pipeline represents the total value of potential consulting engagements at various stages of the business development process.

Sales Tax Nexus

Sales tax nexus is the connection between a business and a state that creates an obligation to collect and remit sales tax, established through physical presence, economic activity, or other factors.

Same Day ACH

Same day ACH is an expedited ACH transfer that processes within the same business day rather than the standard one to three days.

Scenario Planning

Scenario planning tests how a business would perform under different assumptions, such as winning or losing a large client, raising prices, or hiring early.

Scope Creep

Scope creep is the gradual growth of a project beyond what was agreed, without a matching change in fee, timeline, or resources.

Scope of Work

A scope of work is the detailed description of what a project includes and excludes.

Section 179 Deduction

The Section 179 deduction allows a business to deduct the cost of certain qualifying property in the year it is placed in service, instead of depreciating it over time.

Section 754 Election

A Section 754 election allows a partnership to adjust the tax basis of its assets when a partnership interest is sold or a partner dies, so the new owner is not taxed on gain they already paid for.

Security Deposit Trust

A security deposit trust is a separate account holding tenant security deposits, which belong to the tenants rather than to the property manager or the owner.

Segregation of Duties

Segregation of duties is an internal control that divides responsibilities so no single person controls all aspects of a transaction.

Self-employment tax

Self-employment tax is the Social Security and Medicare tax paid by business owners on their business income, equivalent to both the employee and employer portions of FICA.

Semi-Monthly Pay

Semi-monthly pay means employees receive paychecks twice per month, typically on the 15th and last day of each month.

Sensitivity Analysis

Sensitivity analysis tests how a change in one input affects an outcome.

Service Delivery Model

A service delivery model defines how a professional service firm structures and executes client work, including team composition, delivery methodology, technology utilization, and quality assurance processes.

Service Line Profitability

Service line profitability measures the financial performance of each distinct service a firm offers.

Severance Pay

Severance pay is compensation provided to employees upon termination of employment, typically based on length of service, offered in exchange for a release of claims or as part of company policy.

Shareholder Basis

Shareholder basis is your tax investment in S corporation stock.

Shareholder Distribution

A shareholder distribution is a payment from an S corporation to its shareholders from accumulated earnings.

Shareholder Loan

A shareholder loan is money a shareholder lends to the corporation rather than contributes as capital, creating a debt obligation that the company must repay.

Sick Leave Accrual

Sick leave accrual is the process by which employees earn paid sick time based on hours worked or time employed.

Single Audit

A single audit is an expanded annual audit required of organizations that spend $750,000 or more in federal funds in a fiscal year.

Single Member LLC

A single member LLC is a limited liability company with one owner.

SLA-Backed Support

SLA-backed support guarantees specific response times for client inquiries through contractually committed Service Level Agreements, typically specifying maximum hours for initial response and resolution timeframes by issue priority.

SOC-2 Compliance

SOC-2 compliance is a security certification demonstrating that a service provider meets rigorous standards for protecting customer data, based on independent auditor verification of security controls, availability, processing integrity, confidentiality, and privacy.

Social Security Tax

Social Security tax is a federal payroll tax that funds retirement, disability, and survivor benefits.

Soft Close

A soft close is a preliminary month-end close producing estimated financial results before completing all reconciliations and final adjustments.

Soft Cost

A soft cost is an internally incurred expense charged to a client matter, such as copying, printing, scanning, postage, or research database time.

Sole Proprietorship

A sole proprietorship is a business owned and run by one person, with no separate business entity formed under state law.

Source Document

A source document is the original record providing evidence that a business transaction occurred, including invoices, receipts, bank statements, contracts, and timesheets.

Spending Limit

A spending limit is a dollar threshold above which purchases require additional approval.

Split Transaction

A split transaction allocates a single payment or receipt across multiple accounts, classes, or categories.

Staff Augmentation

Staff augmentation is a consulting engagement model in which the firm provides skilled professionals who work under the client's direction, effectively extending the client's team temporarily.

Staff Leverage Ratio

Staff leverage ratio measures the number of junior or mid-level staff relative to senior partners or principals in a professional service firm.

Staff Utilization Target

Staff utilization target is the planned percentage of available hours that consultants should spend on billable client work, used for capacity planning, revenue forecasting, and performance management.

Stale Check

A stale check is a check that has not been cashed within a specified period, typically six months.

Standard Billing Rate

A standard billing rate is the hourly fee a professional service firm charges clients for work performed, established based on market rates, expertise level, and target profitability.

Standard Deduction

The standard deduction is a fixed dollar amount the IRS lets taxpayers subtract from adjusted gross income before calculating tax.

State Registration

State registration is the process of formally registering your business with a state government.

State Withholding

State withholding is income tax withheld from employee wages for state tax purposes, with rates and rules varying by state.

Statement of Account

A statement of account summarizes all transactions between you and a customer or vendor over a period, typically a month.

Statement of Work (SOW)

A statement of work is a project-specific document that defines the scope, deliverables, timeline, pricing, and acceptance criteria for a consulting engagement.

Stop Payment

A stop payment is an instruction to your bank to refuse payment on a specific check.

Subcontractor

A subcontractor is an independent professional or firm engaged by a consulting company to deliver services on client projects, typically when specialized skills are needed or internal capacity is insufficient.

Substantiation

Substantiation is the documentation required to support tax deductions and business expenses.

Success Fee

A success fee is additional compensation paid when a defined outcome is achieved.

Supporting Documentation

Supporting documentation is the evidence that substantiates entries in your accounting records.

Suspended Loss

A suspended loss is a tax loss you cannot deduct in the current year due to limitation rules.

SUTA

SUTA (State Unemployment Tax Act) is an employer-paid payroll tax that funds state unemployment insurance programs, with rates and wage bases varying by state and employer experience rating.

Sweep Account

A sweep account automatically transfers funds between accounts based on predetermined rules.

System Conversion

System conversion is the complete process of switching from one business system to another, encompassing data migration, workflow changes, user training, and go-live execution.