Yes, you have the correct idea on how it works. It's an energy in versus energy out thing plain and simple. You don't have to have a net calorie deficit every single day, but over a period of a week or so you'll want the net calorie deficit to be marginally negative. A pound of fat is 3500 calories. So if you want to lose a pound of fat over a one week period you'll need to net 3500 calories of deficit over that week, which is 500 calories a day exactly. Do you have to hit that every day? No. Assuming you are not getting your calorie consumption level too low you could do something like have a deficit of 600 calories six days a week and a calorie surpluss of 100 calories on the other day (a so-called cheat day).
You can achieve the deficit in multiple ways. You can increase you metabolism by exercising more. You can decrease your caloric intake by changing diet. However it is very easy to miss the forest for the trees. If you eat the wrong kinds of food or do to steep of calorie restriction then you can easily throw your system into a mode where it starts reducing your metabolism and promotes storing of calories as fat. That is why pragmatic diets limit your calorie deficit to a certain degree to prevent that from happening. The cheat day can also be beneficial in preventing your body from lapsing into a starvation mode by keeping you calore levels fluctuating every several days.
The tools in FitDay help because it will guide you in determining you necessary deficit based on your goals. Just don't forget to put in the exercise along with the foods as you do them. Those exercise calories add up quick as well.