ARR (Annual Recurring Revenue): the annualised value of all active subscription
contracts. Decrements on actual termination date. Independent of revenue recognition.
MRR (Monthly Recurring Revenue): ARR ÷ 12. The monthly equivalent.
NRR (Net Revenue Retention): (Opening ARR + Expansion − Contraction − Churn) ÷
Opening ARR, measured on the same customer cohort. New customers are excluded.
Above 100% = growing without new customers.
Deferred Revenue: cash received or invoiced for services not yet delivered.
Held on the balance sheet as a liability and released into revenue as the service
is delivered, typically straight-line over the service period for subscriptions.
ASC 606: US GAAP revenue recognition standard. 5-step model:
(1) Identify contract, (2) Identify performance obligations, (3) Determine
transaction price, (4) Allocate price, (5) Recognise when/as obligations satisfied.
IFRS 15: international equivalent of ASC 606. Same 5-step model.
Period close: the process of finalising accounting records for a month.
After close, entries require special approval to post. Fincelo’s 3-path resolution
handles this (Path A/B/C based on materiality).
Proforma invoice: a billing intent document. Not a Tax Invoice. Has no
invoice number, no GST liability, not entered in GSTR-1. Converts to Tax Invoice
when the billing trigger event occurs.
Place of supply (GST): determines whether a transaction is intra-state
(CGST+SGST) or inter-state (IGST). Determined by comparing your GSTIN state
against customer’s registered state.
TDS (Tax Deducted at Source): tax deducted by the customer before paying you.
Calculated on the base amount, excluding GST where GST is shown separately.
Example at 2%: ₹100 base + ₹18 GST = ₹118 invoice → TDS of ₹2 on the base →
customer pays ₹116 and deposits ₹2 with the government in your name.
You claim the ₹2 as a credit via Form 26AS.
194J(b): the clause of Section 194J covering fees for technical services,
deducted at 2% since the Finance Act 2020 rate change. Clause 194J(a) covers
professional services at 10%. Whether a SaaS subscription falls under 194J(b),
194J(a), or elsewhere depends on the contract. Confirm with your CA.
194JA / 194JB: the section codes used in TDS returns and Form 26AS.
194JA = 2% (technical services). 194JB = 10% (professional services, royalties).
Note the letters are the reverse of the clause letters above: technical services are
clause 194J(b) in the Act but code 194JA in your 26AS.
Dunning: systematic process of communicating with customers to collect overdue
payments. Fincelo supports 10 action types per step across Standard, Enterprise,
and Aggressive templates.
Payment score (0–100): AI-calculated creditworthiness score per customer.
Drives automatic dunning template assignment. Factors: payment history,
days overdue average, broken payment promises, recent trend, disputes.
Revenue Quality Score: single score (0–100) measuring the quality of the
ARR base. Factors: NRR, collection efficiency, customer concentration, renewal rate,
average payment score. Calculated by the CFO Co-pilot.
Renewal health composite score: score 1–100 per contract measuring renewal
probability. Factors: payment score, product usage, QBR engagement, support sentiment,
contract tenure. Calculated by the Renewal Agent.
Customer health score (0–100): composite score per customer calculated daily by
the Customer Intelligence Agent across five weighted dimensions: Payment Health 25%,
Churn Risk 25%, Contract Health 20%, Expansion Signal 15%, Engagement 15%.
Normalised to a cohort percentile rank.
Health tiers: Platinum (85+), Good (70–84), Average (50–69), Poor (30–49),
Critical (below 30). At Critical, the CFO is looped in at step 1 of the playbook.
Churn probability: output of the churn predictor, built from six signals: health
score, health trend, payment deterioration, support sentiment, engagement drop, and
renewal proximity. Returned with a predicted churn window, risk tier, recommended play,
and intervention owner.
CLV (Customer Lifetime Value): estimated total revenue from a customer over
their lifetime as your customer. Calculated by Customer Intelligence Agent from ARR × predicted tenure × NRR probability.
ICP (Ideal Customer Profile): the characteristics of the highest-value,
highest-retention customer cohort. Derived by Customer Intelligence Agent from
analysis of the full customer base.
Revenue leakage: the gap between what should have been billed and what was
actually billed. Detected by Customer Intelligence Agent: under-billed seats,
missed escalations, unapplied price reviews.
Agent outcome learning: the mechanism by which agents learn from their own
history. Actions that led to positive outcomes are weighted higher in future.
Compounds over 6+ months of operation.
Z-score baseline: statistical method for anomaly detection. Measures how many
standard deviations an observation is from a 12-period rolling mean. |Z| above 2.0
is flagged as an anomaly; above 3.0 as critical. Adapts automatically as the
business grows.
Domain event: a record written to the domain_events table when a significant
event occurs. All modules and agents subscribe to relevant events. No direct
module-to-module calls — everything routes through the event bus.
Orchestration engine: the coordination layer alongside Fincelo’s 8 agents. Routes
events, enforces cooldown locks, and prevents two agents acting on the same customer
at once. It is not an agent, is not governed, and carries no credit weight.
Governance state: the setting on every agent action. Auto (executes immediately),
Approval (waits in the approval queue for a human), or Disabled (switched off).
Material decisions always require CFO approval regardless of governance state.
View A: revenue recognition treatment for terminated contracts where no refund
is given. Revenue recognised through original contract end date.
View B: revenue recognition treatment for terminated contracts where a refund
is given. Revenue stops at termination. Credit note for unused period.
Ratchet clause: contract term that prevents billing from dropping below the
previous period’s level. Detected by AI scanning for: minimum guarantee users,
minimum agreed headcount, minimum agreed licenses, floor quantity, base commitment.
Magic link: secure, time-limited URL sent to the customer’s onboarding POC.
Valid for 24 hours. Used for KYC form access.
FX gain/loss: difference between INR value at invoice date FX rate and INR
value at payment date FX rate. Posted to Other Income / Finance Costs — NOT revenue.
SSP (Standalone Selling Price): the price at which a product or service would
be sold individually. Used for revenue allocation when a contract has multiple
performance obligations.
SEZ (Special Economic Zone): government-designated zone. Supplies to SEZ are
zero-rated under GST. LUT/Bond required. GSTIN mandatory.
ISD (Input Service Distributor): GST registration for companies that receive
services centrally and distribute ITC to their branches.
IRN (Invoice Reference Number): unique identifier generated by the IRP (Invoice
Registration Portal). Mandatory on B2B invoices for businesses above the e-invoicing
turnover threshold (currently ₹5 Cr). Can only be cancelled within 24 hours of
generation; after that, a credit note with its own IRN is required.
LUT (Letter of Undertaking): declaration filed with GST authorities allowing
export of services without paying IGST. Needed to invoice overseas and SEZ
customers on a zero-rated basis without paying IGST upfront.
Valid for one financial year.
Fincelo — Knowledge Base v3.1
Built in India · For the World
Covers: 8 agents · 34 enhancement capabilities · 13 TDS sections · 10 GST treatments
