The Clockwork Glossary
Finance vocabulary is supposed to clarify decisions, not obscure them. These are the seven terms that come up most often when founders, operators, and accounting firms talk about FP&A, each defined the way a sharp CFO would explain it to a new team member, not the way a textbook would.
Every term links to the part of Clockwork that puts it to work.
The discipline of turning a company’s financial data into forward-looking decisions.
FP&A is the function that sits between accounting and strategy. Accounting records what happened; FP&A decides what to do about it: forecasting revenue and cash, building budgets, running scenarios, and surfacing variances so leadership can course-correct before quarters go sideways.
At small and mid-sized companies, FP&A often falls to a fractional CFO, controller, or accounting firm rather than a dedicated team. That’s why the tooling gap matters: legacy FP&A platforms are priced for enterprises. Clockwork is built for the operators actually doing the work.
A rolling, week-by-week projection of cash in and cash out over the next 52 weeks.
A 52-week cash flow forecast is a rolling, week-by-week projection of cash in and cash out for the next year. It extends the 13-week operating forecast that turnaround consultants and CFOs reach for first to a full year, so a payroll crunch, a slow-pay customer, or a seasonal dip shows up weeks ahead instead of becoming an emergency. Unlike an annual P&L forecast, it is built on actual cash movement: receipts from customers, disbursements to vendors, payroll, and tax payments, not accrual-based revenue.
Done manually in Excel, even a 13-week version takes four to eight hours a week to maintain. Clockwork builds the full 52 weeks automatically from QuickBooks or Xero and keeps it rolling every night.
An integrated projection of the income statement, balance sheet, and cash flow statement that flows end-to-end from a single set of assumptions.
A proper 3-statement model is the backbone of any serious forecast. Revenue and expenses drive the income statement; net income flows into retained earnings on the balance sheet; working capital movements and non-cash charges reconcile to the cash flow statement. Change one assumption, say pushing a capex deployment from Q2 to Q3, and all three statements update in lockstep.
Most SMB FP&A work stops at a P&L forecast because the balance sheet and cash flow are brutal to model in Excel. Clockwork’s 3-statement engine gives smaller companies the same integrated view that PE-backed portfolio companies run on.
Running multiple versions of a forecast with different assumption sets to see how the business performs under each one.
Scenario planning is the difference between a forecast that looks good and a forecast you can actually defend to a board. A base case, an upside, and a downside, each with its own assumptions about hiring pace, pricing, churn, and capex timing, let leadership see the range of outcomes instead of betting on a single point estimate.
The three scenarios worth modeling quarterly: a “plan case” that matches the current forecast, a “stress case” where revenue slips 15–20%, and a “growth case” where your top two deals close on time. If runway holds in the stress case, you’re fine. If it doesn’t, you have a decision to make.
The comparison of actual results against budgeted or forecasted results, broken out by line item, to explain what drove the gap.
Variance analysis is the close-out ritual that turns a forecast into a learning loop. Every month, you put actuals next to budget, flag the line items that missed by more than a threshold (typically 5% or $10K, whichever is larger), and write a one-sentence explanation for each: price variance, volume variance, timing variance, or forecast error.
Done well, variance analysis sharpens the next forecast. Done badly, or skipped because pulling the numbers takes two days, teams repeat the same assumption errors quarter after quarter. Mira drafts the variance commentary automatically in Clockwork, so the meeting focuses on decisions, not spreadsheet reconciliation.
The rate at which a company is spending cash, typically expressed as a monthly number. Net burn subtracts revenue; gross burn doesn’t.
Burn rate is the single most diagnostic number for an early-stage or cash-constrained company. Gross burn is total monthly operating outflow: payroll, rent, software, and services. Net burn is gross burn minus cash collected from customers. Most founders track net burn because it’s what actually shows up in the bank account, but gross burn is the lever: it’s what you can cut.
A healthy net burn is one that lets you hit a clear milestone (revenue target, next raise, cash-flow breakeven) with at least 6 to 12 months of margin. If the number doesn’t, the conversation isn’t “how do we grow faster”, it’s “how do we cut, raise, or reforecast.”
The number of months a company can keep operating at its current net burn rate before running out of cash.
Runway is cash on hand divided by net monthly burn. $3M in the bank and $250K of net burn a month gives you 12 months of runway. It’s the clock every founder and CFO watches, and the number investors ask about first.
The nuance worth knowing: a runway calculation that uses trailing burn overstates your cushion when burn is accelerating (new hires, infrastructure costs), and understates it when you’re about to close a big contract that drops net burn. The version that matters is forecasted runway: burn as it’s projected to change over the next 12 to 18 months, not what it averaged last quarter. Clockwork calculates forecasted runway continuously as assumptions change.
Clockwork turns every term on this page into a live number, connected to your accounting system, updated automatically, and explained by Mira. Connect in 5 minutes.