Glossary

Invoice & Accounting Glossary

Learn key terms in invoice processing, accounts payable, and accounting automation.

Accounts Payable

Money owed to vendors

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Invoice Processing

Handling vendor invoices

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Three-Way Matching

PO, receipt, invoice verification

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OCR (Optical Character Recognition)

Converting images to text

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AP Automation

Automating accounts payable

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Purchase Order

Document to authorize purchases

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Vendor Management

Managing supplier relationships

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Payment Terms

Net 30, 2/10 Net 30, etc.

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Invoice Matching

Verifying invoices against POs

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Early Payment Discount

Discounts for paying early

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Accounts Receivable

Money owed by customers

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General Ledger

Master accounting record

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Chart of Accounts

List of financial accounts

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Accrual Accounting

Recording when earned/incurred

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Cash Accounting

Recording when paid/received

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Double-Entry Bookkeeping

Debits and credits system

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Bank Reconciliation

Matching books to bank

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Trial Balance

Sum of all ledger balances

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Journal Entry

Recording a transaction

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Debit Memo

Document to increase amount owed

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Credit Memo

Document to reduce amount owed

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Invoice Factoring

Selling invoices for cash

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Aging Report

Report of outstanding invoices

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Days Payable Outstanding (DPO)

Average payment time metric

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Days Sales Outstanding (DSO)

Average collection time metric

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Cash Flow

Money moving in and out

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Working Capital

Current assets minus liabilities

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Cost Center

Department for expense tracking

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Profit Center

Department for revenue tracking

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Budget Variance

Difference from planned budget

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Spend Analysis

Analyzing spending patterns

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Vendor Invoice

Bill from a supplier

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Pro Forma Invoice

Preliminary bill of sale

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Commercial Invoice

Document for customs

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Recurring Invoice

Regular repeated billing

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Invoice Number

Unique identifier for invoice

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Remittance Advice

Payment notification

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Statement of Account

Summary of transactions

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Goods Receipt

Confirmation of delivery

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Service Receipt

Confirmation of service

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Blanket Purchase Order

Standing order for supplies

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Purchase Requisition

Internal purchase request

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RFQ (Request for Quote)

Asking vendors for pricing

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RFP (Request for Proposal)

Asking vendors for proposals

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Net Terms

Payment due period

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COD (Cash on Delivery)

Pay when goods arrive

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CIA (Cash in Advance)

Pay before shipping

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EFT (Electronic Funds Transfer)

Electronic payment

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ACH Payment

Automated Clearing House transfer

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Wire Transfer

Direct bank-to-bank payment

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Virtual Card Payment

Single-use card numbers

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Supplier Portal

Vendor self-service platform

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E-Invoicing

Electronic invoice exchange

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EDI (Electronic Data Interchange)

Automated document exchange

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XML Invoice

Structured data format invoice

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UBL (Universal Business Language)

XML-based business documents

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PEPPOL

European e-invoicing network

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ZATCA E-Invoicing

Saudi Arabia e-invoicing

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GST Invoice

Goods and Services Tax invoice

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VAT Invoice

Value Added Tax invoice

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Tax Invoice

Invoice with tax details

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Reverse Charge

Buyer pays tax to authority

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Withholding Tax

Tax deducted at source

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1099 Form

US vendor tax reporting

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W-9 Form

US vendor tax ID request

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TIN (Tax ID Number)

Tax identification number

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EIN (Employer ID Number)

US business tax ID

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DUNS Number

Business identification number

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Vendor Onboarding

Setting up new suppliers

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Vendor Master Data

Central vendor database

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Spend Under Management

Controlled procurement spend

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Maverick Spend

Unauthorized purchasing

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Tail Spend

Small, unmanaged purchases

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Strategic Sourcing

Optimizing vendor selection

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Category Management

Managing spend by category

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Contract Management

Managing vendor agreements

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SLA (Service Level Agreement)

Performance guarantees

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MSA (Master Service Agreement)

Framework contract

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SOW (Statement of Work)

Project scope document

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NDA (Non-Disclosure Agreement)

Confidentiality agreement

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Audit Trail

Record of all changes

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Segregation of Duties

Separating responsibilities

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SOX Compliance

Sarbanes-Oxley requirements

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GAAP

Generally Accepted Accounting Principles

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IFRS

International Financial Reporting Standards

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ASC 842

Lease accounting standard

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Month-End Close

Monthly financial closing

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Year-End Close

Annual financial closing

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Financial Statements

Income, balance, cash flow

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Balance Sheet

Assets, liabilities, equity

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Income Statement

Revenue and expenses

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Cash Flow Statement

Cash movements report

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AP Turnover Ratio

Payment efficiency metric

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Procure-to-Pay (P2P)

Full purchasing cycle

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Source-to-Pay (S2P)

Sourcing through payment

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Order-to-Cash (O2C)

Sales through collection

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Straight-Through Processing

Fully automated processing

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Touchless Processing

No manual intervention needed

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Exception Rate

Percentage needing manual review

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First-Pass Yield

Successful auto-processing rate

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