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Plain-English Accounting Glossary
The terms our clients actually look up — explained plainly.
A working glossary of accounting, tax, QuickBooks, and insurance-agency terms. Written by our CPAs, in language a business owner can actually use.
01 · Tax
S Corporation
A tax election that lets a corporation or LLC pass income through to its owners' personal tax returns, avoiding double taxation.
Pass-Through Entity
A business whose income passes through to its owners and is taxed on their personal returns rather than at the entity level.
Qualified Business Income (QBI) Deduction
A federal deduction of up to 20% of qualified business income for owners of pass-through entities.
Estimated Tax Payments
Quarterly payments business owners and self-employed individuals make toward their annual tax bill.
R&D Tax Credit
A federal (and Wisconsin) credit for businesses spending on qualified research activities — broader than most owners assume.
Multi-State Filing
Filing income or franchise tax returns in more than one state because the business has nexus or earns income there.
Wisconsin Pass-Through Entity Tax
An elective state-level tax that pass-through businesses can pay on behalf of their owners, working around the federal $10,000 SALT cap.
Section 179 Deduction
A federal tax election that lets businesses immediately expense the cost of qualifying property — equipment, vehicles, software — rather than depreciate it.
1099 vs. W-2
The two main classifications of workers — independent contractors (1099) vs. employees (W-2) — with very different tax, legal, and operational implications.
02 · Accounting
Accrual vs. Cash Accounting
Two ways to recognize income and expenses — when money moves (cash) vs. when it's earned or owed (accrual).
Accounts Payable (AP)
Money your business owes to vendors and suppliers for goods or services already received.
Accounts Receivable (AR)
Money owed to your business by customers for goods or services already delivered.
Advisory Services
Forward-looking financial guidance — strategy, planning, decision support — beyond the historical work of bookkeeping and tax preparation.
Balance Sheet
A snapshot at a single point in time of what a business owns (assets), owes (liabilities), and the owners' equity in it.
Depreciation
Spreading the cost of a long-lived asset over its useful life rather than expensing it all in year one.
EBITDA
Earnings before interest, taxes, depreciation, and amortization — a common proxy for operating cash generation.
Fixed Asset
A long-lived physical asset used in the operation of the business — equipment, vehicles, buildings, computers.
Reconciliation
Comparing your accounting records against an outside source — usually a bank or credit-card statement — to confirm they agree.
03 · Insurance Agencies
Agency Multiple
The valuation multiple — usually expressed as a multiple of EBITDA — used to price the sale of an insurance agency.
Carrier Override
Additional commission paid above the base rate, usually for hitting volume or growth targets with a specific carrier.
Contingency Income
Performance-based bonus compensation paid by a carrier to an independent agency, tied to volume, growth, and loss-ratio metrics.
Multi-State Filing
Filing income or franchise tax returns in more than one state because the business has nexus or earns income there.
Perpetuation Planning
The long-term plan for transferring agency ownership to the next generation — internal employees, family, or outside buyers.
04 · QuickBooks
Chart of Accounts
The structured list of every account in your accounting system, organized by type — assets, liabilities, equity, income, expenses.
Class Tracking
A QuickBooks feature that lets you tag transactions with a 'class' to track performance by department, location, or business line.
QuickBooks ProAdvisor
An accountant or bookkeeper certified by Intuit in QuickBooks setup, training, and troubleshooting.
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