FP&A & Budgeting

Financial planning and analysis (FP&A): budgets, forecasts, variances, operating expense, headcount, and the cash burn and runway that keep a company alive.

Key terms & definitions

14 terms in this pack

ACTUALS

The real recorded numbers you compare against plan

ALLOCATION

Spreading a shared cost across departments

BASELINE

The approved plan you measure change against

BUDGET

The annual Tech Ops plan you build and defend

BURN

The rate at which a pre-revenue company spends cash

DRIVER

An assumption that moves a modeled output

FAVORABLE

A variance that helps the bottom line

FORECAST

Updated view of where the year will land

HEADCOUNT

Staffing level that drives a big slice of the budget

OPEX

Day-to-day operating spend, expensed as incurred (abbr.)

PHASING

Spreading an annual budget across the months

RUNWAY

How many months of cash remain at the current burn

TARGET

The number a budget owner commits to hit

VARIANCE

The budget-vs-actual gap an FP&A partner has to explain