36 terms explained
GST, billing and inventory terms, explained simply
Short, practical meanings of the words that come up when you bill customers, buy from suppliers, keep stock and make products, each with a worked example from an Indian business.
36 terms
- Buying and sellingAgeing reportAn ageing report groups unpaid invoices by how long they are overdue, such as 1 to 30, 31 to 60 and over 90 days, to show who to chase first.
- Inventory and stockBatch numberA batch number, also called a lot number, identifies one group of a product made or received together, so its expiry date, cost and buyers can be traced.
- ManufacturingBill of materialsA bill of materials (BOM) lists the raw materials, packing and quantities needed to make a set amount of a finished product, like a recipe for production.
- GST and invoicingCGST, SGST and IGSTCGST and SGST are the central and state halves of GST on a sale within one state; IGST is the single tax charged on a sale between states.
- GST and invoicingCredit noteA credit note is a document a seller issues to reduce the value or tax of an earlier invoice, for example when goods are returned or were overcharged.
- GST and invoicingDelivery challanA delivery challan is a document that travels with goods to record what was sent, used under GST when goods move without a tax invoice, such as for job work.
- GST and invoicingE-invoiceAn e-invoice is a B2B tax invoice reported to the government's Invoice Registration Portal, which returns a unique IRN and a signed QR code to print on it.
- GST and invoicingE-way billAn e-way bill is an electronic document generated on the GST e-way bill portal before goods worth more than ₹50,000 are moved, recording the goods and the vehicle.
- Inventory and stockEAN-13 barcodeAn EAN-13 barcode is the 13-digit barcode printed on most retail packs; it encodes a GTIN-13, a number that identifies one product from one brand owner.
- Business and financeERPERP (enterprise resource planning) software keeps a business's buying, selling, stock, production and money in one system, so each entry updates everything it affects.
- Inventory and stockFEFOFEFO (first expired, first out) means always selling, dispatching or using the batch with the earliest expiry date first, whatever order the batches arrived in.
- Inventory and stockFIFOFIFO (first in, first out) assumes the stock bought or made first is sold or used first, on the shelf and when working out the cost of goods sold.
- Buying and sellingGoods received noteA goods received note (GRN) records what actually arrived from a supplier, checked against the purchase order, before stock is added and the bill is paid.
- GST and invoicingGSTINGSTIN is the 15-character Goods and Services Tax Identification Number that a GST-registered business gets for each state it is registered in.
- GST and invoicingHSN codeAn HSN code is the number that classifies a product for GST under the international Harmonised System; services use a similar SAC code.
- Inventory and stockLanded costLanded cost is the full cost of getting goods to your godown: the purchase price after discount, plus freight, loading, insurance, duties and other charges.
- Business and financeMargin and markupMargin is profit as a share of the selling price; markup is profit as a share of the cost. The same rupee profit always gives a smaller margin than markup.
- Inventory and stockMoving average costMoving average cost values stock at the average cost of all units on hand, recalculated every time new stock arrives at a different price.
- Buying and sellingPayment termsPayment terms are the agreed rules for when and how a customer pays, such as due on receipt or within 30 days of the invoice date.
- GST and invoicingPlace of supplyPlace of supply is the state where GST law treats a sale as made; compared with the seller's location, it decides whether to charge CGST and SGST or IGST.
- Buying and sellingPoint of sale (POS)Point of sale (POS) is where a customer pays, and the software and hardware a shop uses there to bill items, take payment and print a receipt.
- Inventory and stockProduct variantsProduct variants are versions of one product that differ in an option such as size, colour or flavour, each with its own SKU, barcode, price and stock.
- ManufacturingProduction yieldProduction yield is the share of planned or input quantity that ends up as good, sellable finished product, usually shown as a percentage.
- Buying and sellingPurchase orderA purchase order is the document a buyer sends a supplier to order goods, stating what to supply, how much, at what price and by when.
- Buying and sellingQuotationA quotation is a seller's written offer to supply goods or services at stated prices and terms, which the customer can accept, negotiate or decline.
- Inventory and stockReorder levelA reorder level is the stock quantity at which you place a new purchase order, set high enough that the goods arrive before you run out.
- Inventory and stockSafety stockSafety stock, or buffer stock, is extra stock kept to cover sales spikes and late deliveries, so you do not run out while a new order is on its way.
- Buying and sellingSales orderA sales order is the seller's record of a confirmed customer order, listing what will be delivered, at what price and when, before the invoice is made.
- Inventory and stockSKUAn SKU (stock keeping unit) is a short code a business gives each item it stocks, so every size, colour or pack can be counted and found separately.
- Inventory and stockStock ledgerA stock ledger, or stock register, is a running record of every movement of each product into and out of stock, with the balance after each entry.
- Inventory and stockStock takeA stock take is a physical count of the goods you hold, compared with your records so that missing, damaged or extra stock is found and corrected.
- Inventory and stockStock transferA stock transfer moves goods from one of your own locations to another, such as a godown to a shop, without selling them, so each location's stock stays correct.
- Inventory and stockStock write-offA stock write-off removes goods that can no longer be sold or used, such as expired, damaged, lost or stolen stock, from your records at what they cost.
- GST and invoicingTax invoiceA tax invoice is the bill a GST-registered business issues for a taxable sale, showing the buyer, items, values and GST in the form Rule 46 sets out.
- GST and invoicingTax-inclusive priceA tax-inclusive price already contains GST, so the customer pays exactly that amount; a tax-exclusive price has GST added on top.
- Inventory and stockUnit of measureA unit of measure (UOM) is the unit a quantity is counted in, such as kg, litre, piece or carton; conversions link the units you buy, stock and sell in.
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