Small-Business Financial Glossary

13-week cash flow forecast

Cash flow

A rolling week-by-week projection of cash in and cash out for the next quarter. It shows when money actually moves — not when invoices are dated — so you can see a short week six weeks before it happens. Week one is a fact; every week beyond it is an estimate that gets sharper as you keep the forecast current.

See how it's applied: Cash Flow Forecasting

Cash runway

Cash flow

How many months your business can keep operating at its current burn rate before cash runs out, assuming no new income. It's cash on hand divided by average monthly net burn. A runway under six months usually means it's time to change something — collect faster, spend slower, or both.

See how it's applied: Cash Flow Forecasting

Net burn rate

Cash flow

The average amount of cash your business loses per month: total expenses minus total income over a representative period. Negative burn means the business is adding cash. Use a three-month average, not your best month, unless your revenue is genuinely that steady.

Break-even point

Pricing

The sales volume at which revenue exactly covers costs — every unit sold before it loses money, every unit after it contributes to profit. For a product, it's monthly fixed costs divided by the contribution per unit. Knowing it turns 'sales are up' into 'we're finally making money' — or shows why they aren't the same thing.

See how it's applied: Pricing Analysis

Contribution margin

Pricing

What one sale adds toward covering fixed costs: the price minus the variable cost of producing that unit — materials, direct labor, payment fees. It's the number that makes pricing decisions honest, because a busy product with a thin contribution margin is quietly costing you money on every sale.

See how it's applied: Pricing Analysis

Fixed costs

Budgeting

Costs that stay the same regardless of how much you sell: rent, insurance, loan payments, base salaries. They're the reason a slow month hurts more than the profit-and-loss statement suggests — they don't slow down when revenue does.

See how it's applied: Business Budgeting

Variable costs

Budgeting

Costs that rise and fall with volume: materials, subcontractors, merchant fees, hourly labor tied to jobs. Separating them from fixed costs is what makes break-even math and honest pricing possible.

See how it's applied: Business Budgeting

Budget variance

Budgeting

The gap between what a budget predicted and what actually happened, month by month. Variance isn't failure — it's information. The habit that makes budgets useful is naming what drove each variance while the month is still fresh enough to do something about it.

See how it's applied: Business Budgeting

Accounts receivable aging

Reporting

A report sorting the money customers owe you by how long it's been unpaid — current, 30, 60, 90+ days. It's the honest version of 'we're busy': revenue on the books is not cash in the bank, and the aging report shows which invoices are quietly turning into bad debt.

See how it's applied: Financial Reporting

Job costing

Profitability

Tracking all revenue and direct costs for a single job or project so you can see what it actually earned. Most contractors discover at least one job type they thought was their best work is their worst margin — job costing is how you find that out before you bid the next one.

See how it's applied: Profitability Analysis

Working capital

Cash flow

The cushion between what you owe soon and what you can reach soon: current assets minus current liabilities. Profitable businesses fail with weak working capital because profit and cash don't arrive on the same schedule. A 13-week forecast exists precisely to manage this gap.

KPI (key performance indicator)

Reporting

A deliberately short list of numbers that predict how the month will end before it does — bookings, backlog, labor utilization, average ticket. The discipline is subtraction: a dashboard with five metrics you check weekly beats a fifty-metric report nobody opens.

See how it's applied: KPI Dashboards

Written and reviewed by Bryce Tyner · Reviewed 2026-09-22