32 terms a Finance Controller actually meets — consolidation, currency, planning and reporting — defined in plain English, without the textbook.
Actuals are the figures your accounting system has actually recorded for a period, as opposed to what was budgeted or forecast. They are the baseline every variance is measured against, and they change until the period is closed.
An audit trail is the record of every change made to a figure or a report — who changed it, when, from what to what, and why. For a finance team it is what turns "the number moved" into an answerable question.
The average rate is the exchange rate used to translate profit and loss items when consolidating a foreign subsidiary. Because income and expenses accrue across the whole period, an average is more representative than a single day's rate. The balance sheet uses the closing rate instead.
A board pack is the document set a board receives before a meeting: the financial statements, variance analysis, KPIs, and the commentary that explains them. The financial section can be automated; the strategic narrative is the Finance Controller's judgement.
Read the full guide →A budget is an approved financial plan for a period, usually a year, broken down by month and by department or entity. It is a commitment rather than a prediction — which is why it is compared against actuals rather than quietly replaced when it goes off track.
Budget vs actual is the comparison of what was planned against what happened, line by line. The report itself is arithmetic; the value is in the commentary explaining which variances are timing, which are permanent, and which change the forecast.
Read the full guide →Capital expenditure, or capex, is spending on assets that will be used over more than one period — equipment, buildings, capitalised software. It sits on the balance sheet and reaches the P&L gradually as depreciation, which is why it affects cash long before it affects profit.
A cash flow forecast projects money in and money out over a future period, so you can see when the balance gets tight. It can be built directly, from expected receipts and payments, or indirectly, by adjusting forecast profit for non-cash items and working capital movements.
Read the full guide →The chart of accounts is the structured list of accounts a business records transactions against. In a group where entities each have their own, consolidation depends on mapping every local chart to one unified group structure — which is where most consolidation projects actually get stuck.
The closing rate is the exchange rate on the last day of the period, used to translate balance sheet items when consolidating a foreign subsidiary. Assets and liabilities are translated at closing; the P&L uses the average rate. The gap between the two is what creates the translation difference.
Consolidation is the process of combining the financial statements of a parent and its subsidiaries into one set of accounts presenting the group as a single economic entity. It requires adding the entities together, translating currencies, and eliminating everything the group did with itself.
A consolidation adjustment is an entry made only at group level, never in an entity's own ledger. Eliminations, fair-value adjustments and goodwill sit here. Because they live outside the source systems, they are the entries most likely to be undocumented — and the first thing an auditor asks about.
The cumulative translation adjustment, or CTA, is the reserve where exchange differences accumulate when a foreign subsidiary's balance sheet is translated at the closing rate while its P&L is translated at the average rate. It sits in equity rather than the P&L, and it is a running total, not a period figure.
Driver-based planning builds a budget from the operational quantities that cause the numbers — headcount and loaded cost rather than a payroll total, units and price rather than a revenue line. The advantage is that when an assumption changes, the model recalculates instead of needing a rebuild.
An elimination entry removes an intercompany transaction or balance during consolidation. If one entity invoices another, the revenue and the cost both exist in the group's books and both have to come out, or the group reports business it did with itself.
Read the full guide →Financial planning and analysis, or FP&A, is the discipline of budgeting, forecasting, reporting and analysing performance to support decisions. It sits between the accounting function that records what happened and the executives deciding what to do next.
The functional currency is the currency of the primary economic environment in which an entity operates — the one it mainly earns and spends in. It is determined by circumstance, not chosen for convenience, and it is distinct from the presentation currency the group reports in.
Intercompany elimination is the process of removing transactions and balances between entities in the same group when preparing consolidated financial statements, so the group does not count business it did with itself.
Read the full guide →Investor reporting is the periodic pack sent to shareholders and investors covering financial performance, KPIs and outlook. It differs from statutory reporting in cadence and audience: more frequent, more forward-looking, and shaped by what a particular investor asked to see.
Read the full guide →A key performance indicator, or KPI, is a metric chosen because it tracks something the business is actually managing. The discipline is in the selection — a dashboard of thirty KPIs usually means nobody has decided what matters.
Management accounts are internal financial reports produced for the people running the business, typically monthly. They prioritise usefulness and timeliness over compliance, which is why they can carry estimates, segment detail and commentary that statutory accounts would not.
Minority interest, more precisely called non-controlling interest, is the portion of a subsidiary's equity and profit belonging to shareholders other than the parent. When a group consolidates a subsidiary it owns 80% of, it consolidates 100% of the results and then shows the other 20% separately.
The month-end close is the sequence of tasks that takes a period from open to reportable: accruals, reconciliations, intercompany matching, review and sign-off. Close duration is the most commonly tracked measure of a finance team's operational health.
Read the full guide →Multi-entity consolidation is the production of one set of group financials from several separate entities — often on different accounting systems, in different currencies, with different charts of accounts. The difficulty is rarely the arithmetic; it is keeping the mapping and eliminations consistent every cycle.
Read the full guide →Operating expenditure, or opex, is spending consumed within the period it is incurred — salaries, rent, software subscriptions. It hits the P&L immediately, which is the practical distinction from capital expenditure.
The presentation currency is the currency a group reports its consolidated financial statements in. It is a choice, unlike functional currency, and entities whose functional currency differs are translated into it during consolidation.
A rolling forecast always projects a fixed horizon ahead — typically twelve months — and is re-cut each period rather than being fixed at the start of the year. It keeps the forward view current, but only works where re-forecasting is genuinely quick.
Read the full guide →Scenario planning models several coherent versions of the future side by side — base case, slower hiring, delayed funding — each with its own assumptions flowing through profit, balance sheet and cash. It answers "what would have to be true" rather than producing a single forecast.
Read the full guide →Statutory accounts are the financial statements a company is legally required to prepare and file, in a prescribed format under an applicable framework such as IFRS or SFRS. They serve compliance rather than management, and they reconcile to the management accounts without being identical to them.
A three-way budget links the profit and loss, balance sheet and cash flow statement so that a change in one flows correctly through the other two. It is the standard investors and lenders expect, because a plan that shows profit without showing the cash to fund it is incomplete.
Read the full guide →Variance analysis is the process of comparing actual financial results against a budget, forecast, or prior period, quantifying the difference, and explaining what caused it.
Read the full guide →Working capital is current assets less current liabilities — in practice, the cash tied up in receivables and inventory less what is funded by payables. Growth consumes it, which is why a profitable business can still run out of cash.
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