Glossary of Terms

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A B C D E F G K M N O P Q R S T U V W

Explore our Glossary of common terms in the analytics, product, and growth space.

A

Accounts Receivable (AR) Money owed by customers, its role in cash flow, and how businesses manage and finance receivables

ACH (Automated Clearing House) The electronic network for bank-to-bank money transfers used widely in US B2B payments

ACV Explore the significance of ACV and its impact in SaaS.

Annual Contract Value (ACV) The average annual revenue per customer contract and why it matters for SaaS growth

Annual Recurring Revenue (ARR) Predictable subscription revenue and the primary growth metric for SaaS businesses

API An API allows software applications to communicate with each other.

APR (Annual Percentage Rate) The annualized cost of borrowing, expressed as a percentage, used to compare financing options

B

Bridge Financing Short-term financing to cover immediate expenses until long-term solutions are available.

Buy Now, Pay Later (BNPL) A financing model that lets customers pay over time while businesses get paid upfront

C

Cap Table (Capitalization Table) The record of company ownership showing who holds equity, at what percentage, and for how much

Cash Flow The net movement of money in and out of a business and the foundation of financial health

Collections The process of turning outstanding invoices into cash through payment follow-ups

Configure, Price, Quote (CPQ) Sales software that automates product configuration, pricing rules, and quote generation

Conversion Rate The percentage of prospects that complete a desired action, from trial signups to closed deals

Covenants (Restrictive Covenants in Financing) Rules and restrictions lenders impose on borrowers as part of financing agreements

Credit Risk The risk that a borrower or customer will fail to meet their payment obligations

Customer Acquisition Cost (CAC) The average cost of acquiring a new customer and a key metric for sustainable growth

Customer Churn (Churn Rate) The percentage of customers who cancel and a critical metric for recurring revenue growth

Customer Lifetime Value (CLTV or LTV) The total revenue a customer generates over their lifetime and a core profitability metric

Customer Relationship Management (CRM) Software and processes used to manage customer data, sales pipelines, and relationships

D

Debt Financing Raising capital by borrowing money that must be repaid with interest over time

Dilution (Equity Dilution) The reduction of ownership percentage caused by issuing new equity

Dunning The process of recovering failed or overdue payments through automated reminders

E

EBITDA A widely used proxy for operating profitability that strips out financing and accounting effects

Embedded Finance Financial services integrated directly into non-financial products and workflows

Embedded Financing (Embedded Lending) Offering financing directly inside the purchase flow instead of through external lenders

Equity Financing Raising capital by selling ownership shares to investors

ERP (Enterprise Resource Planning) Integrated software systems that manage core business processes across finance, operations, and HR

Expansion Revenue Revenue generated from existing customers through upsells, cross-sells, and usage growth

F

Factoring (Invoice Factoring / Receivables Financing) Selling unpaid invoices to get immediate cash instead of waiting for customers to pay

Fintech Technology-driven innovation in financial services, payments, lending, and banking

Flat-Rate Pricing A pricing model that charges a single, fixed price regardless of usage or the number of users

G

GDPR (General Data Protection Regulation) The EU's comprehensive data privacy law governing how companies collect, process, and store personal data

Go-to-Market (GTM) The strategy for bringing a product to market, acquiring customers, and driving revenue

Gross Margin Revenue minus the direct cost of delivering it, expressed as a percentage and a core SaaS efficiency metric

Growth Capital Financing designed to fund expansion for companies that have proven their model but need capital to scale

K

KYC (Know Your Customer) The process of verifying customer identity to meet regulatory and anti-fraud requirements

M

Market Penetration Market penetration measures a product's market share, crucial for growth.

Merchant Cash Advance (MCA) A form of short-term business financing based on future sales, repaid through a percentage of daily revenue

Milestone-Based Billing A billing model where payments are triggered by completing defined project milestones

Monthly Recurring Revenue (MRR) The predictable subscription revenue a business generates each month

N

Net Dollar Retention (NDR) / Net Revenue Retention (NRR) How existing customer revenue grows or shrinks after churn, downsells, and expansions

O

Operating Cash Flow Cash generated from normal business operations, essential for assessing financial health.

P

Payback Period (CAC Payback) The time it takes to recover customer acquisition cost through recurring revenue

Payment Terms (Net Terms) The conditions that define when and how customers must pay invoices

PCI-DSS The security standard that governs how companies handle and protect payment card data

Product-Led Growth (PLG) A go-to-market strategy where the product itself drives user acquisition, conversion, and expansion

Q

Quote-to-Cash (Q2C) The end-to-end process of turning quotes into signed contracts, billed revenue, and collected cash

R

Ratio Boost An embedded B2B BNPL and quote-to-cash platform that helps sellers close faster and get paid upfront

Ratio Trade Upfront capital for SaaS companies by turning recurring revenue contracts into immediate cash

Renewals When existing customers continue their subscription or contract for a new term

Revenue-Based Financing (RBF) A non-dilutive financing model repaid as a percentage of future revenue

Revenue Operations (RevOps) Aligning marketing, sales, and customer success to drive predictable revenue growth

Risk-Based Pricing Pricing model where costs adjust based on customer or contract risk

ROI (Return on Investment) A measure of the financial return generated relative to the cost of an investment

Rule of 40 A SaaS benchmark stating that revenue growth rate plus profit margin should equal or exceed 40%

Runway How long a company can continue operating at its current burn rate before running out of cash

S

Sales Cycle The end-to-end process from prospecting to closed deal and a key driver of revenue predictability

SMB (Small and Medium-Sized Business) The market segment of smaller businesses and a primary growth driver for scalable SaaS products

T

TCV (Total Contract Value) The full value of a customer contract over its entire term, including all fees and commitments

U

Underwriting Pricing model where costs adjust based on customer or contract risk

Upsell Pricing model where costs adjust based on customer or contract risk

V

Value-Added Reseller (VAR) A reseller that enhances a product with services, customization, or support

Value-Based Pricing A pricing strategy that sets prices based on the perceived value delivered to the customer, not cost

VAT (Value Added Tax) A consumption tax applied at each stage of production and a key compliance requirement for international businesses

Venture Debt A loan for venture-backed startups, often paired with warrants

W

Warrants Rights to purchase company shares at a fixed price in the future

Working Capital The short-term capital available to run day-to-day business operations