Financial Software Key Terms

Learn about key elements of financial software for businesses

Most businesses use financial software to keep track of expenses, income and other financial information. Financial software can also be used as a way to keep track of financial information needed when filing taxes. Financial software creators also take into consideration the size of the business and create software titles that work best for small businesses or large businesses. The size of the business will determine what tools are included in the software.

Tax exchange format (TFX)

The tax exchange format is a file extension that gives financial software users the ability to convert financial information into a format readable by tax software, such as Turbo Tax or Tax Cut.

Comma separated values (CSV)

Comma separated values is a specific file type that can be used to import financial data from a spreadsheet table to financial software.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)

EBITDA is an equation that approximates the amount of cash flow for a company. This approximation is calculated through information obtained from the company's income statement. Financial software for larger businesses can often run this calculation.

Locked transaction

A locked transaction is a financial software tool that allows information for payees to be memorized.

Open Financial Exchange (OFX)

The open financial exchange file extension is important for financial software users that want to connect with bank accounts through the software. Many banks use OFX to give account holders access to their account information and transactions.

Encryption

Encryption is the process of making data unreadable to anyone but those that have access to the password to open the file. Encryption protects sensitive information from hackers and identity thieves.
National Institute of Standards and Technology publishes a variety of standards for data encryption including the data encryption standard adopted by the financial industry for sensitive transactions.

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