Backorder

Backorder: An order that cannot be fulfilled immediately because the product is out of stock, but will be fulfilled when the product is available.

Carrying Cost

Carrying Cost: The cost of holding inventory, including storage, insurance, and interest on capital invested in inventory.

Cycle Counting

Cycle Counting: A process of regularly counting a portion of inventory to ensure accuracy and detect discrepancies.

Deadstock

Deadstock: Inventory that is no longer in demand or usable and must be disposed of.

Economic Order Quantity (EOQ)

Economic Order Quantity (EOQ): The optimal order quantity that minimizes inventory holding costs and ordering costs.

FIFO (First-In-First-Out)

FIFO (First-In-First-Out): An inventory management method that assumes the first items received are the first items sold.

Gross Margin Return on Investment (GMROI)

Gross Margin Return on Investment (GMROI): A measure of the profitability of inventory investment, calculated by dividing gross profit by average inventory investment.

Inventory

Inventory: The stock of goods or materials that a business holds for sale or use in production.

Just-In-Time (JIT)

Just-In-Time (JIT): An inventory management approach that seeks to minimize inventory levels by receiving goods only when needed for production or sale.

LIFO (Last-In-First-Out)

LIFO (Last-In-First-Out): An inventory management method that assumes the last items received are the first items sold.

Lead Time

Lead Time: The time it takes for a supplier to deliver goods after an order is placed.

Obsolete Inventory

Obsolete Inventory: Inventory that is no longer in demand or usable but still has value and may be sold at a discount.

Perpetual Inventory System

Perpetual Inventory System: An inventory management method that maintains a continuous record of inventory levels and transactions.

Reorder Point

Reorder Point: The minimum level of inventory at which a company must reorder a product to avoid stockouts.

SKU Rationalization

SKU Rationalization: The process of evaluating and reducing the number of SKUs a business carries to optimize inventory management.

SKU Velocity

SKU Velocity: The rate at which a particular SKU is sold over a given period of time.

Safety Stock

Safety Stock: The additional inventory held to mitigate the risk of stockouts due to unexpected demand or delays in replenishment.

Stock Keeping Unit (SKU)

Stock Keeping Unit (SKU): A unique identifier assigned to a product to track its inventory.

Stock Turnover Ratio

Stock Turnover Ratio: A measure of how many times a company's inventory is sold and replaced over a given period of time.

Stockout

Stockout: A situation where a company runs out of a product and is unable to fulfill customer orders.

Deductions

Direct Deposit

Employee Benefits

FICA Tax

Form 941

Form W-2

Garnishment

Gross Pay

Medicare Tax

Minimum Wage

Net Pay

Overtime Pay

Paid Time Off (PTO)

Pay Period

Payroll System

Payroll Tax

Sick Leave

Social Security Tax

Vacation Time

W-4 Form

Withholding

Accounts Receivable

The money owed to a company by its customers for goods or services delivered but not yet paid for.

Accounts Receivable Aging Report

A report that shows the outstanding accounts receivable balances, sorted by age.

Aging Schedule

A report that shows the age of each account receivable, usually broken down into categories such as 30 days, 60 days, and 90 days past due.

Bad Debt

An amount owed by a customer that is unlikely to be paid, resulting in a loss for the seller.

Cash Receipts Journal

A record of all cash receipts received by a company, including payments on accounts receivable.

Collection Agency

A third-party company that specializes in collecting overdue accounts receivable on behalf of a seller.

Collection Policy

A set of procedures and guidelines for collecting overdue accounts receivable.

Credit Memo

A document issued by a seller that reduces the amount owed by a buyer, usually due to a return or refund.

Credit Policy

A set of guidelines and procedures for extending credit to customers.

Customer

A person or entity that purchases goods or services from a seller.

Customer Statement

A document that summarizes a customer's account activity, including invoices, payments, and outstanding balances.

Days Sales Outstanding (DSO)

A measure of the average number of days it takes a company to collect its accounts receivable.

Discount

A reduction in the amount owed by a buyer, usually offered by a seller for early payment.

Due Date

The date on which payment is due for an invoice or account receivable.

Factoring

The process of selling accounts receivable to a third party, usually a financial institution, in exchange for immediate cash.

Factoring Fee

The fee charged by a factoring company for purchasing accounts receivable.

Invoice

A document that details the goods or services provided by a seller to a buyer, including the cost and terms of payment.

Invoice Date

The date on which an invoice is issued by a seller.

Invoice Number

A unique identifier assigned to an invoice for tracking and record-keeping purposes.

Late Payment Fee

A fee charged by a seller for payment received after the due date.

Open Invoice

An invoice that has been issued but not yet paid.

Payment Date

The date on which payment is made for an invoice or account receivable.

Payment Plan

An agreement between a seller and a customer to make payments on an account receivable over time.

Payment Terms

The agreed-upon terms of payment between a buyer and seller, including the due date, discount, and penalty for late payment.

Payment Terms Discount

A discount offered by a seller to a buyer for paying an account receivable within a specified period, such as 10 days.

Payment Voucher

A document that accompanies a payment and provides information about the invoice or account receivable being paid.

Pro Forma Invoice

An estimate of the cost of goods or services that a seller provides to a buyer, often used for international transactions.

Purchase Order

A document that specifies the goods or services that a buyer wants to purchase from a seller, including the quantity, price, and delivery date.

Purchase Requisition

A document that initiates the purchase of goods or services, usually submitted by a department or employee within a company.

Receiving Report

A document that confirms the receipt of goods by a buyer, typically used to match against invoices.

Remittance Advice

A document that accompanies a payment and provides information about the invoice or account receivable being paid.

Reserve for Bad Debts

An allowance set aside by a company to cover potential losses from bad debts.

Sales Order

A document that confirms a customer's request to purchase goods or services from a seller, including the quantity, price, and delivery date.

Three-way Matching

The process of comparing a purchase order, receiving report, and invoice to ensure that the goods or services were received and the invoice is accurate.

Vendor

A company or individual that supplies goods or services to a buyer.

Write-Off

Write-Off: The process of removing a bad debt from a company's accounts receivable balance.