---
title: "Glossary"
description: "Glossary of finance, accounting, and billing terms commonly used in SaaS, cloud, subscription, and other recurring revenue business models"
url: "https://ordwaylabs.com/resources/glossary/"
type: "Page"
publisher: "Ordway"
language: "en-US"
published: "2024-07-23T18:48:19+00:00"
updated: "2025-11-20T12:47:29+00:00"
---

# Glossary

### Subscription Billing, Revenue Recognition, SaaS Metrics

A B C D E F G H I J K L M O N P Q R S T U V W X Y Z

### A

* [Account Hierarchy](/resources/glossary/account-hierarchy/): What is Account Hierarchy? Learn how SaaS companies bill & report across parent-child accounts for enterprises. Simple definition + example.
* [Accounts Receivable](/resources/glossary/accounts-receivable/): Learn how accounts receivable works in SaaS. Discover its impact on cash flow, DSO, revenue audits, and billing-to-cash sync.
* [Accounts Receivable Collections](/resources/glossary/accounts-receivable-collections/): Learn how collections work in SaaS finance, how automation reduces DSO, and why disciplined AR workflows strengthen cash flow and audit control.
* [ACH Payment](/resources/glossary/whats-an-ach-payment/): What’s an ACH Payment? How SaaS companies use bank transfers to reduce fees & failed payments. Setup guide + benefits for finance.
* [Advance Billing](/resources/glossary/advance-billing/): What is Advance Billing? How SaaS companies invoice upfront & recognize revenue over time. ASC 606 compliant guide with examples.
* [Annual Recurring Revenue (ARR)](/resources/glossary/annual-recurring-revenue-arr/): What is ARR in SaaS? Simple definition, calculation formula & real examples. Learn what counts (and what doesn’t) in ARR reporting.
* [ARR Movements](/resources/glossary/arr-movements-saas/): Learn how SaaS finance teams track ARR movements—new, churn, contraction, and expansion—to explain growth and improve forecasting accuracy.

### B

* [What Is a Billing Address and How Is It Used?](/blog/billing-address/): A billing address is the address linked to your credit card, debit card, or bank account that banks and merchants use to verify your identity when you make a payment.
* [Billing Waterfall](/resources/glossary/billing-waterfall/): What is a Billing Waterfall? Learn how it automates invoice timing, payment allocation & ensures ASC 606 compliance. Simple guide.
* [Batch Invoice Generation](/resources/glossary/what-is-batch-invoice-generation/): What is Batch Invoice Generation? How SaaS companies automate monthly billing runs for 1000s of customers. Reduce errors & save time.

### C

* [Credit Memo vs Debit Memo](/resources/glossary/credit-memo-vs-debit-memo/): Credit Memo vs Debit Memo: Clear definitions, when to issue each, & how to automate without errors. Essential for SaaS finance teams.
* [Churn Rate](/resources/glossary/churn-rate/): Learn what churn rate means in subscriptions and SaaS. Understand types of churn, how to calculate it, and benchmarks for customer and revenue retention. Improve churn with data-driven strategies.
* [Chart of Accounts (CoA)](/resources/glossary/chart-of-accounts-coa/): What a Chart of Accounts (CoA) is, how it structures financial reporting, and why a clean CoA is vital for SaaS revenue accuracy and audit readiness.
* [Chargebacks](/resources/glossary/chargebacks/): Learn what a chargeback is, how it works in SaaS billing, and how it affects revenue recognition, reconciliation, and audit readiness.

### D

* [Disputes](/resources/glossary/what-is-a-dispute-in-saas-finance/): Understand what a dispute means in SaaS billing, how it affects AR and revenue recognition, and why automated dispute management reduces financial risk and customer churn.
* [Deferred Revenue Waterfall](/resources/glossary/deferred-revenue-waterfall/): What is a Deferred Revenue Waterfall? Step-by-step visual guide for recognizing revenue monthly under ASC 606. Download template.
* [Deferred Revenue](/resources/glossary/deferred-revenue/): What It Means (Simple Explanation) Deferred revenue is money you’ve been paid—but haven’t earned yet. If a customer pays upfront for a year, you can’t call it revenue right away. It sits as a liability…
* [Deferred Billing](/resources/glossary/what-is-deferred-billing/): What is Deferred Billing? How it differs from deferred revenue. Use cases in SaaS & impact on cash flow & financial reporting.

### F

* [Financial Statements](/resources/glossary/what-are-financial-statements/): What are Financial Statements? Simple breakdown of P&L, Balance Sheet & Cash Flow for SaaS startups. Why investors care. Read guide.

### G

* [General Ledger (GL)](/resources/glossary/general-ledger-gl/): Learn what a general ledger (GL) is, how it works in SaaS finance, and why it’s the foundation for accurate financial reporting and audit readiness.

### I

* [Invoice Number](/resources/glossary/invoice-number/): What is an Invoice Number? Why unique, sequential IDs matter for SaaS billing, payments & audits. Best practices + examples.
* [Income Statement](/resources/glossary/whats-an-income-statement/): What’s an Income Statement (P&L)? Simple breakdown for SaaS founders. Learn how to read revenue, COGS, expenses & net profit.

### J

* [Journal Entry](/resources/glossary/journal-entry/): what a journal entry is, how it works in accounting, and why automated entries are essential for GAAP compliance and audit-ready SaaS financial reporting.

### M

* [Monthly Recurring Revenue (MRR)](/resources/glossary/monthly-recurring-revenue-mrr/): What is MRR in SaaS? Simple definition, calculation formula & how it differs from ARR. Track growth accurately with real examples.

### N

* [New ARR](/resources/glossary/what-is-new-arr/): What is New ARR? How it differs from Expansion ARR. Formula, examples & why it’s a key growth metric for SaaS companies.
* [Net Revenue Retention (NRR)](/resources/glossary/net-revenue-retention-nrr/): What is NRR? Step-by-step formula, benchmarks & 3 proven ways to improve it. Essential SaaS metric for investors & growth.

### P

* [Proration](/resources/glossary/what-is-proration/): What is Proration? How SaaS companies calculate partial charges for mid-cycle upgrades/downgrades. Formula + automation best practices.

### R

* [Renewal](/resources/glossary/what-is-a-renewal-in-saas-finance/): Learn how renewals work in SaaS finance, how automation supports ARR stability, and why renewal accuracy is critical for revenue recognition and forecasting.
* [Remittance Advice](/resources/glossary/remittance-advice/): Learn what remittance advice means, how it works in SaaS finance, and why it’s essential for accurate invoice matching and cash reconciliation.
* [Refund](/resources/glossary/refund/): Navigate refunds in recurring revenue businesses. Understand definitions, workflow, accounting impacts, and challenges. Discover how automation ensures accuracy & compliance.
* [Ramp Deal](/resources/glossary/ramp-deal/): What is a Ramp Deal? How SaaS companies structure gradual price increases. Automate billing & rev rec with ASC 606 compliance.

### S

* [Subscription Upgrade](/resources/glossary/subscription-upgrade/): When a customer moves to a higher-priced plan or adds more features, seats, or services to their existing subscription.
* [Subscription Plan](/resources/glossary/what-is-a-subscription-plan/): Defines the pricing, billing frequency, feature entitlements, and usage allowances a customer receives in exchange for a recurring fee.
* [Subscription Pause](/resources/glossary/subscription-pause/): What is a Subscription Pause? How to temporarily suspend billing & rev rec without churn. Use cases + automation tips for SaaS.
* [SOX Compliance](/resources/glossary/sox-compliance/): U.S. federal law that requires public companies to maintain strong internal controls over financial reporting (ICFR)

### U

* [User Based Pricing](/resources/glossary/user-based-pricing/): What is User-Based Pricing? How per-seat billing works, common pitfalls & how to scale revenue without leakage. Real SaaS examples.
* [Usage-Based Billing](/resources/glossary/what-is-usage-based-billing/): Usage-based billing charges customers based on actual consumption. Learn how to operationalize it for ASC 606 compliance and SaaS revenue accuracy.