Accounting and ERP Glossary
This glossary explains common terms for a non-accountant ADMIN. Posting effects refer to this system’s implemented workflows. See Automatic Accounting Postings, Accounting Settings, and Financial Reports for procedures.
Accounting terms
Account
A named bucket used to classify accounting amounts, such as Bank, Inventory, Revenue, or Accounts Payable. A posting affects accounting only when it creates debit and credit lines against accounts.
Accounting period
One calendar-month segment of a fiscal year. An accounting entry can post only when its source business date belongs to an existing OPEN period.
Accounts Payable (AP)
Money owed to suppliers. Posting a supplier bill credits AP; creating its supplier payment debits AP for the outstanding balance.
Accounts Receivable (AR)
Money owed by customers. Posting a CI debits AR; a customer receipt, customer-advance application, or LC realization credits AR.
Accrual
Recognition of income or expense when earned or incurred rather than only when cash moves. GRNI is an example of an operational accrual. Other accruals require CA-approved journals and affect accounting only when posted.
Adjustment journal
A manual journal with evidence explaining an accounting correction or period-related adjustment. It affects accounting immediately when created because manual journals are immutable posted records. Use only with CA approval.
Asset
A resource controlled by the company, such as Bank, Accounts Receivable, Inventory, or Supplier Advances. Assets normally have debit balances.
Balance
The net amount in an account after debits and credits. Reports may show opening, movement, and closing balances.
BDT
Bangladeshi taka, the fixed base currency of the ledger and all financial reports. Foreign-currency conversion depends on the implemented workflow. Foreign- procurement booking is not fully modeled, and Purchase Order and Supplier Bill journal values currently retain a base-BDT assumption.
Chart of Accounts
The hierarchical list of accounts and their classifications. It controls report grouping and, for cash and bank accounts, Receipt & Payment treatment. Creating an account alone does not post accounting.
Credit
One side of double-entry accounting. Credits normally increase Liability, Equity, and Revenue accounts and normally decrease Asset and Expense accounts.
Cutover date
The agreed date on which approved opening balances enter this system. It affects accounting when an opening-balance import is posted. The date is frozen after an opening import has ever been posted.
Debit
One side of double-entry accounting. Debits normally increase Asset and Expense accounts and normally decrease Liability, Equity, and Revenue accounts.
Double entry
The rule that every accounting entry has equal total debits and credits. For example, receiving BDT 100,000 of goods debits Inventory and credits GRNI by BDT 100,000.
Equity
The residual interest after liabilities are deducted from assets. It includes retained earnings and current-year results. Equity normally has a credit balance.
Expense
A cost recognized in a period, such as Cost of Goods Sold, office expense, or bank charge. An expense affects accounting when its source event or journal is posted; merely planning or saving it outside a posting workflow does not.
Exchange rate
The rate used to translate a source-currency amount into BDT where the workflow records a rate. Foreign-currency sales and settlement postings affect reports in BDT, and differences between booking and settlement rates may create realized FX gain or loss. Purchase Orders and Supplier Bills do not currently carry a booking exchange rate, so non-BDT procurement requires an approved procedure and CA review.
Fiscal year
A twelve-month accounting year made of twelve contiguous monthly periods. Its start month is locked once any fiscal year exists.
Goods Received Not Invoiced (GRNI)
A temporary liability used after goods are received but before the supplier bill is posted. GRN receipt credits GRNI; supplier bill posting debits GRNI and credits AP.
Journal entry
A dated, balanced set of debit and credit lines. System journals are created automatically by business events; manual journals are created by authorized users. Journal entries affect financial reports.
Leaf account
An account with no child accounts. Posting and control accounts should be active leaves. The retained earnings setting must point to an eligible Equity leaf.
Liability
An obligation, such as Accounts Payable, GRNI, or Customer Advances Received. Liabilities normally have credit balances.
Opening balance
An approved starting account balance imported at cutover. It affects accounting only when the opening-balance import is posted.
Posting
The controlled creation of accounting entries. Depending on the document, posting occurs through Receive, Dispatch, or Post, or immediately when a settlement, expense, advance, LC realization, or manual journal is created.
Profit or loss
Revenue minus expenses for a period. Positive BDT 25,000 means revenue exceeded expenses by BDT 25,000. It appears in Profit & Loss and contributes to current-year earnings.
Realised FX gain or loss
The BDT difference caused when a foreign-currency receivable is settled at a different exchange rate from its booking rate. Customer receipts and LC realizations can post this difference.
Reconciliation
A comparison used to prove that two sets of amounts agree, such as Trial Balance debits versus credits or a ledger bank balance versus an external bank statement. The system’s reports support accounting reconciliation, but Receipt & Payment is not a bank reconciliation.
Retained earnings
Accumulated profit or loss transferred into Equity at year-end close. The selected account affects accounting when a fiscal year is closed; selecting it does not create an entry by itself.
Revenue
Income earned from sales. In this workflow, Revenue is recognized when a CI is posted, not when a PI or SO is created or when a DC is dispatched.
Reversal
A new journal that swaps the original debits and credits while preserving the original record. An allowed settlement cancellation creates a reversal; it does not erase history.
Source business date
The date on the business document. Automatic accounting uses this date to select the accounting period, even if the posting button is clicked later.
Trial balance
A report of account opening balances, period debits and credits, and closing balances. Equal totals show mathematical balance but do not prove completeness or correct classification.
Inventory and costing terms
Inventory on hand
Physical quantity currently recorded as available in stock. GRN receipt increases it; DC dispatch decreases it. Those actions also create accounting entries.
Quantity on order
Quantity expected from confirmed POs. PO confirmation increases it and GRN receipt decreases it. PO confirmation itself does not create accounting.
Quantity reserved
Quantity committed to confirmed SOs. SO confirmation increases it and DC dispatch decreases it. SO confirmation itself does not create accounting.
Stock ledger
The append-only operational record of inventory movements and before/after quantities. It is not the accounting General Ledger, although GRN and DC events also create accounting entries.
WAC (Weighted Average Cost)
The average inventory cost after combining existing stock value with newly received stock value.
If 50 units on hand cost BDT 500 each and 50 more are received at BDT 700 each, WAC becomes BDT 600 per unit:
(50 × 500 + 50 × 700) ÷ 100 = 600
GRN receipt recalculates WAC. DC dispatch uses the pre-dispatch WAC to debit Cost of Goods Sold and credit Inventory; dispatch does not change WAC itself.
Business documents and actions
PI (Proforma Invoice)
A quotation sent before a sale is finalized. Issuing or converting a PI does not affect inventory or accounting. Conversion can create an SO, which still requires confirmation.
SO (Sales Order)
A confirmed customer order. Saving a DRAFT SO has no effect. Confirming it increases quantity reserved but creates no accounting entry. Later DC dispatch and CI posting create the accounting effects.
DC (Delivery Challan)
The document recording goods delivered against an SO. Saving a DRAFT DC has no effect. Dispatch decreases on-hand and reserved quantities and posts Cost of Goods Sold against Inventory at WAC.
CI (Commercial Invoice)
The customer invoice created from dispatched DCs. Saving a DRAFT CI has no accounting effect. Posting it debits Accounts Receivable and credits Revenue in BDT. Customer advances may be applied automatically.
PO (Purchase Order)
An order placed with a supplier. Saving a DRAFT PO has no effect. Confirming it increases quantity on order but creates no accounting entry. GRN receipt begins the accounting effect.
GRN (Goods Receipt Note)
The document recording goods received against a PO. Saving a DRAFT GRN has no effect. Receiving it increases on-hand stock, reduces on-order quantity, recalculates WAC, debits Inventory, and credits GRNI.
Supplier bill
The supplier invoice created from received GRNs. Saving it as DRAFT has no accounting effect. Posting debits GRNI and credits Accounts Payable. Supplier advances may be applied automatically.
Supplier payment
A settlement document for the outstanding amount of POSTED supplier bills. Creation immediately debits Accounts Payable, credits the selected payment account, and marks the bills PAID. It has no inventory effect.
Customer receipt
A settlement document for the outstanding amount of POSTED CIs. Creation immediately debits the selected deposit account, credits Accounts Receivable, posts realized FX gain or loss if needed, and marks the CIs PAID. It has no inventory effect.
Customer advance
Money received before customer invoicing for an eligible confirmed CASH SO. Creation immediately debits the selected deposit account and credits Customer Advances Received. Application at CI posting reduces Accounts Receivable.
Supplier advance
Money paid before supplier billing for an eligible confirmed CASH PO. Creation immediately debits Supplier Advances and credits the selected payment account. Application at supplier bill posting reduces Accounts Payable.
Expense entry
A purpose-specific record of an expense paid from a selected cash or bank account. Creation posts immediately: debit the expense category account and credit the payment account.
LC (Letter of Credit)
A bank-supported payment instrument linked to sales or purchase orders. Creating, issuing, linking, submitting documents, or maturing an LC does not itself create an accounting journal in this workflow. LC realization is the settlement event that affects accounting.
LC realization
The record of funds received from the bank for a MATURED LC and linked POSTED CIs. Creation debits Bank, credits Accounts Receivable, records any realized FX gain or loss and bank charge, marks CIs PAID, and marks the LC REALIZED.
Confirm
An action that commits a DRAFT PO or SO operationally. It changes quantity on order or reserved, respectively, but does not create accounting.
Receive
The action that changes a DRAFT GRN to RECEIVED. It changes inventory and creates the Inventory/GRNI accounting entry using the GRN business date.
Dispatch
The action that changes a DRAFT DC to DISPATCHED. It changes inventory and creates the Cost of Goods Sold/Inventory accounting entry using the DC business date.
Post
The action that finalizes a DRAFT CI or supplier bill for accounting. CI posting recognizes AR and Revenue; supplier bill posting moves GRNI into AP.
Reports and controls
Abnormal balance
A balance opposite to the account’s normal presentation, such as a negative Asset. It remains visible in reports and requires investigation; it is not automatically an error.
Accounting Readiness
A diagnostic of setup, classification, calendar, opening-balance, and ledger-integrity conditions. It does not post accounting and does not replace CA review.
General Ledger
The report showing opening balance, individual system and manual postings, running balance, and closing balance for an account or account subtree. Do not confuse it with the inventory Stock Ledger.
Hierarchy level
The selected depth of account grouping in a report. Level changes alter presentation, not accounting entries or grand totals.
Profit & Loss
The period report of posted Revenue and Expense accounts and the resulting profit or loss. It is not an as-of report.
Receipt & Payment
A monthly report of posted activity involving accounts classified as Cash or Bank. It is neither a bank reconciliation nor a statutory cash flow statement.
Statement of Financial Position
The as-of report of posted Assets, Liabilities, and Equity, including current-year earnings and comparison balances. It is also commonly called a balance sheet.
Unresolved account
A posting whose account cannot be resolved in the current chart data. Reports keep the amount visible so reconciliation is not falsely improved. It requires administrator and CA investigation.
Bank reconciliation
A control comparing the accounting bank balance with an external bank statement and explaining differences. This system’s Receipt & Payment report does not perform that control.
Cash flow statement
A statutory statement classifying cash flows into operating, investing, and financing activities. Receipt & Payment is not a cash flow statement.
CA (Chartered Accountant)
The professional responsible for accounting judgments and review, including fiscal basis, cutover, chart classifications, retained earnings, tax and VAT, adjustments, provisions, disclosures, and filings. ADMIN access permits system actions but does not transfer those professional decisions to the ADMIN.
Related Guides
Return to the Accounting User Guides index.
Reviewed against the application on: 2026-08-21