Glossary
ERP, accounting and tax glossary
77 terms you will meet when you invoice, buy, count stock, close the books and pay people, each explained in a few lines with a worked example.
In short
This glossary defines 77 ERP, accounting, tax, inventory and payroll terms in plain words for small businesses. Each term has its own page with a worked example and how SimpleERP handles it.
A
- Accounts payable
- Accounts payable is the money a business owes its suppliers for goods and services it has received on credit. Each posted supplier bill adds to it and each payment reduces it. It is a current liability on the balance sheet, often called trade creditors, and a payables ageing report shows how long each amount has been outstanding so you can plan payments and keep supplier terms.
- In SimpleERP: Posting a purchase bill writes the payable, the stock and the input tax in one step, and payments allocated to bills settle them, with each bill's status set by the database rather than typed.
- See purchase
- Accounts receivable
- Accounts receivable is the money customers owe a business for goods or services it has already invoiced. Each posted sales invoice adds to it, and each receipt or credit note reduces it. It is a current asset on the balance sheet, often called trade debtors. Watching it closely is how a small business keeps cash flowing instead of quietly financing its customers.
- In SimpleERP: Posting an invoice writes the receivable, the sale, the tax, the stock issue and its cost in one step, and receipts and credit notes applied to it set its status to partially paid or paid.
- See payments & receivables
- Accrual accounting
- Accrual accounting records income when it is earned and expenses when they are incurred, regardless of when money changes hands. A credit sale counts in the month of the invoice, and a bill counts in the month the goods or service arrived. Company law and accounting standards in most countries expect companies to keep their books on this basis.
- In SimpleERP: SimpleERP books on the accrual basis: posting an invoice records the sale and the receivable, posting a bill records the cost and the payable, and approving a payroll run posts salaries before they are paid.
- See accounting
- Accrued expense
- An accrued expense, also called an outstanding expense, is a cost a business has already incurred but not yet been billed for or paid by the end of a period, such as electricity used in September but billed in October. It is recorded as an expense in the period it was used and as a current liability until the bill is paid.
- In SimpleERP: SimpleERP has no automatic accrual schedule. Post a month-end manual journal against a payable account you add, then use Reverse to undo it on the first of the next month; payroll and approved expense claims already accrue on approval.
- See accounting
- Ageing report
- An ageing report groups unpaid customer invoices or supplier bills by how long they are past their due date, usually in buckets such as not due, 1 to 30 days, 31 to 60 days, 61 to 90 days and over 90 days. It shows at a glance which customers are slow to pay and which supplier dues are pressing, and it is the starting list for every collection call.
- In SimpleERP: Receivables and payables ageing are built from posted invoices, bills, payments and notes for any date, by bucket and by party, and export to CSV.
- See payments & receivables
- Asset disposal
- Asset disposal is the removal of a fixed asset from the books when it is sold, scrapped, lost or given away. The asset's cost and its accumulated depreciation are both taken out, the money received is recorded, and the difference between that money and the book value is a gain or a loss on disposal, shown in the profit and loss statement.
- In SimpleERP: SimpleERP's Dispose action takes the date, amount received and the bank or cash account, shows the gain or loss before you confirm, and posts the journal. Sale on credit to a customer is not supported in the dialog; record the proceeds into bank or cash.
- See fixed assets
- Attendance register
- An attendance register is the record of each employee's attendance for every working day: present, absent, half day, on leave, holiday or weekly off. Many countries require employers to keep working-time and attendance records for a set number of years. At month end its totals give each employee's paid days and unpaid days for payroll.
- In SimpleERP: HR marks a whole day's attendance on one screen or staff check in from their phones; approved leave, holidays and weekly offs fill in automatically, and the attendance summary report totals each month per employee.
- See hr, attendance & leave
B
- Balance sheet
- A balance sheet is a statement of what a business owns, what it owes and what belongs to its owners on a given date. Assets always equal liabilities plus equity. It differs from a profit and loss statement, which covers a period, because it is a snapshot of position at one moment, such as the last day of the financial year. Banks and investors read it to judge stability.
- In SimpleERP: The balance sheet is read from posted journal lines for any date you pick, and prior years' profit is carried into retained earnings automatically, so it always agrees with the P&L.
- See accounting
- Bank reconciliation
- Bank reconciliation is the check that the bank account in your books agrees with the bank's statement on a date. Differences come from timing, such as cheques issued but not yet presented or deposits not yet credited, and from entries missing in the books, such as bank charges or interest. Every difference is explained, and missing entries are posted.
- In SimpleERP: SimpleERP has no bank feeds or statement import. Open the bank register, enter the statement's closing balance and date, and tick the lines that appear on the statement; the difference updates live and Finish is allowed at zero.
- See accounting
- Bill of materials (BOM)
- A bill of materials, or BOM, is the recipe for a manufactured product: the components and quantities needed to make a set output, the scrap you expect on each component, and any extra cost per batch such as labour or power. It decides how much raw material a work order consumes and what each finished unit costs, so a wrong BOM means wrong stock and wrong margins.
- In SimpleERP: SimpleERP keeps versioned BOMs per product with scrap percentages, a default version, and a live cost roll-up at current average costs. A work order copies the default BOM when it is planned, so later BOM edits do not change orders already planned.
- See manufacturing
- Bonus
- A bonus is a payment to an employee over and above regular salary. It can be discretionary, such as a year-end or performance bonus, promised in the employment contract, or required by law in some countries for covered employees. A bonus is normally taxable pay, subject to the same withholding as salary, and is added in the month it is paid.
- In SimpleERP: A Bonus line is not pro-rated for loss of pay. Add it to a month's payslips from the run review with Add line → Bonus.
- See payroll
C
- Capital account
- A capital account records the owner's stake in a business. For a proprietor or partner it starts with the money and assets brought in, rises with the profit for each year, and falls with drawings, which are amounts taken out for personal use. It sits under equity in the balance sheet. In a company the equivalent is share capital plus retained earnings.
- In SimpleERP: SimpleERP seeds an Owner's Capital equity account. A company posts its share capital there; a proprietor posts money brought in and drawings with manual journals, adding a Drawings sub-account to keep them apart. Profit is not posted to capital: the balance sheet computes it from the ledger.
- See accounting
- Cash basis accounting
- Cash basis accounting records income only when money is received and expenses only when money is paid. Unpaid invoices and unpaid bills are left out of the books until they are settled. It is simple and close to the bank balance, but a month's profit can swing with collection dates, and it shows nothing about who owes the business money.
- In SimpleERP: SimpleERP does not offer cash-basis books: every invoice and bill posts when it is issued. For the cash view, the cash flow report groups money in and out of cash and bank accounts by what it was for.
- See accounting
- Chart of accounts
- A chart of accounts is the organised list of every account a business records transactions in, grouped into five types: assets, liabilities, equity, income and expenses. Every journal line posts to one of these accounts, and every financial report is built by adding them up. A clear, short chart makes the books easier to read, easier to audit and harder to post to the wrong place.
- In SimpleERP: A complete chart, including the accounts invoices, bills and payroll post to, is seeded at sign-up and stays out of sight until you open it; you can add accounts and export the chart to CSV.
- See accounting
- Closing stock
- Closing stock is the value of raw materials, work in progress and finished goods still on hand at the end of an accounting period. It equals opening stock plus purchases less the cost of goods sold. It appears as a current asset in the balance sheet, becomes next period's opening stock, and is valued at cost or net realisable value, whichever is lower.
- In SimpleERP: SimpleERP keeps stock perpetually at weighted average cost, so the Inventory account holds closing stock at any moment and no year-end entry is needed. It does not offer FIFO; a physical count posts any difference through a stock adjustment.
- See accounting
- Consumption
- Consumption is the raw material and components used up in making products during a period. Accountants work it out as opening stock plus purchases less closing stock, and it appears in the profit and loss account as cost of materials consumed. A system that records consumption on each production run gives the same figure item by item, and the difference from the formula shows losses.
- In SimpleERP: SimpleERP records consumption when a work order completes: each component leaves the source warehouse at its current average cost. Consumed quantities start from the plan scaled to what was produced, and you change them to the actual figures before completing.
- See manufacturing
- Contra entry
- A contra entry records money moving between two of the business's own cash or bank accounts, such as cash deposited into the bank, cash withdrawn for the till, or a transfer between two bank accounts. Both sides are cash or bank, so no income, expense, customer or supplier is touched. Many packages record it with a contra voucher.
- In SimpleERP: SimpleERP has no contra voucher type. In Accounting, Cash and bank has a Quick transfer form (from account, to account, amount, date) that posts the journal with the memo Transfer.
- See accounting
- Cost centre
- A cost centre is a part of a business, such as a department, location, machine or project, whose costs are tracked separately so the owner can see what each part spends. It does not change the accounts an entry posts to; it adds a tag that splits the same expense across centres. In many accounting packages, cost centres are tagged on entry lines and reported on their own.
- In SimpleERP: SimpleERP does not have cost centres or budgets. Tag documents and journals with a branch and filter account ledgers by it, or split an expense into sub-accounts, such as Rent: factory and Rent: store, which the P&L lists separately.
- See multi-branch accounting
- Cost of goods sold (COGS)
- Cost of goods sold is the cost of the stock a business sold during a period, valued by its inventory method. It is subtracted from sales to give gross profit. The usual formula is opening stock plus purchases minus closing stock. A business that values its stock wrongly, or forgets to record cost when it sells, will report the wrong profit even if every sale is billed correctly.
- In SimpleERP: Every posted invoice records the cost of the goods it issued at their weighted average cost, together with the sale, the stock movement and the tax, so gross profit is right on any day.
- See weighted average cost
- Cost roll-up
- A cost roll-up calculates what one unit of a manufactured product should cost by adding up its bill of materials: each component's quantity, raised for scrap, times its current cost, plus labour and overhead per batch, divided by the batch size. The result is a standard cost used to set prices and to compare against the actual cost of each production run.
- In SimpleERP: The SimpleERP BOM editor shows a live roll-up at current average costs, using the purchase price where an item has no average yet, marked as an estimate. Actual cost is then worked out on each completed work order and shown beside the BOM standard.
- See manufacturing
- Credit limit
- A credit limit is the maximum amount a seller lets one customer owe at any time. When unpaid invoices plus a new sale would cross it, the seller holds the sale, asks for a payment first or raises the limit. It caps how much is owed, while the credit period caps how long; most businesses that sell on credit set both for each customer.
- In SimpleERP: SimpleERP stores a credit limit on each customer and shows a warning on the invoice when the amount owed plus the new invoice would cross it; the warning does not block posting, so the person who posts decides.
- See payments & receivables
- Credit note
- A credit note is a document a seller issues to reduce the value of an earlier invoice, for example when goods are returned or the price or tax charged was too high. In VAT and GST systems it refers to the original invoice and reduces the seller's output tax for the period it is reported in. It is the correct way to correct an invoice that has been issued, rather than editing or deleting it.
- In SimpleERP: A credit note is raised from the original invoice, is capped at what was invoiced, can bring the returned goods back into stock at cost, and is applied to open invoices or refunded.
- See tax invoice format
- Credit period
- A credit period is the number of days a seller allows a customer to pay after the invoice date, such as 30 days. The due date is the invoice date plus the credit period. It is also called credit days or payment terms, written as Net 30. An invoice unpaid after its due date is overdue, which is what an ageing report measures.
- In SimpleERP: SimpleERP stores credit days as payment terms (Due on receipt, Net 7 to Net 60, or your own) on each customer and supplier, fills the due date on every invoice and bill, and ageing counts days overdue from it.
- See payments & receivables
D
- Day book
- A day book is the list of every accounting entry posted on a given day or in a date range, in the order it was recorded: sales, purchases, receipts, payments and journals together. Accountants read it to check the day's work, spot a missing or duplicate entry, and confirm that each entry went to the right account. Many accounting packages have a Day Book report.
- In SimpleERP: SimpleERP's day book report lists every posted entry for the date range you pick, from invoices, bills, payments, payroll, expenses, stock and manual journals, and each row opens the document behind it.
- See accounting
- Dead stock
- Dead stock is goods that have not sold for a long period, often six months or more, and are unlikely to sell at full price. It ties up cash and warehouse space, and it may be overvalued in the books. Typical causes are a discontinued design, an over-sized order or a product that never caught on. Finding it early leaves room to discount, return or rework it.
- In SimpleERP: SimpleERP does not flag dead stock. Filter the stock movement ledger to sales in the last 180 days, export the stock on hand list to CSV, and any product with stock but no sale in that period is your dead stock.
- See inventory
- Debit note
- A debit note is a document that increases the value of an earlier invoice or, in purchasing, records goods returned to a supplier and the amount the supplier now owes back. In VAT and GST systems a supplier's debit note increases output tax, for example when it undercharged. In everyday practice, buyers also raise debit notes to record purchase returns and claims, while the supplier issues the matching credit note.
- In SimpleERP: A purchase debit note is raised against a supplier's bill, takes the returned goods out of stock at their cost, reverses the input tax and reduces what you owe that supplier.
- See purchase
- Depreciation
- Depreciation spreads the cost of a long-lived asset, such as a machine, vehicle or computer, over the years it is used, instead of charging it all as an expense when it is bought. The two common methods are straight line, an equal amount each period, and written-down value, a fixed percentage of the remaining book value. It lowers profit without any cash leaving the business.
- In SimpleERP: Each asset carries a schedule, straight line over months or declining balance at an annual rate, and the month's depreciation for every asset posts to the books in one click.
- See fixed assets
- Double-entry bookkeeping
- Double-entry bookkeeping records every transaction in at least two accounts, with total debits equal to total credits. A credit sale, for example, increases what the customer owes and increases sales. Because both sides must balance, many errors show up immediately, and the trial balance, profit and loss statement and balance sheet can all be built from the same set of entries.
- In SimpleERP: PostgreSQL refuses any journal whose debits and credits differ, and invoices, bills, payments, payroll and depreciation each post their own balanced entry, so nobody has to write debits and credits by hand for daily work.
- See accounting
E
- Employee advance
- An employee advance, or salary advance, is money an employer pays an employee ahead of their earned salary, to be recovered from later pay. In the books it is an asset, an amount the employee owes the business, not an expense. Each month a fixed instalment is deducted from the payslip until the balance is nil.
- In SimpleERP: Paying an advance posts it against the employee advances account; each payroll run deducts the monthly recovery, or the balance left if smaller, as its own payslip line until the advance is settled.
- See payroll
- ERP
- ERP, enterprise resource planning, is software that runs a business's sales, stock, purchases, accounts, people and reports on one shared set of records. Each job is entered once and every module and report reads the same data. For a small business it replaces separate billing, stock, accounting and payroll tools that each keep their own copy of the truth.
- In SimpleERP: SimpleERP runs sales, inventory, purchases, accounting, CRM, payroll, manufacturing, expenses and assets on one set of customers, suppliers, products and one ledger. Posting an invoice writes the journal, cost of goods sold, the stock issue, the receivable and the tax in one step.
- See what is erp software?
F
- Financial year
- A financial year, or fiscal year, is the 12-month period a business keeps its accounts and reports tax for. Many countries use the calendar year; others start in April or July. Statutory accounts, annual returns and most tax deadlines follow it, and many businesses restart invoice numbering each financial year so every number stays unique within its year.
- In SimpleERP: The financial year comes from your country and can be changed in Settings until the first posting. Document numbers carry the year, such as INV-2026-0001, and the P&L and balance sheet can be read for the year or any dates you choose.
- See accounting
- Finished goods
- Finished goods are products that have completed manufacturing and are ready to sell. Their cost is the raw material consumed plus labour and overheads of production. Until sold they are part of inventory on the balance sheet, next to raw materials, and when sold their cost becomes cost of goods sold. A product can be finished goods for one business and a raw material for another.
- In SimpleERP: SimpleERP has no separate finished goods type: any stocked product with a BOM can be made, and a completed work order adds it to the target warehouse at the run's actual cost per unit. Use a product category such as Finished goods to group them on the stock list.
- See manufacturing
- Fixed asset register
- A fixed asset register is the list of every long-term asset a business owns, such as machines, vehicles, computers and furniture, with each one's purchase date, cost, supplier, depreciation method, accumulated depreciation, book value and location or holder. Its totals must agree with the fixed asset and accumulated depreciation accounts in the ledger. Auditors use it to verify assets physically.
- In SimpleERP: SimpleERP's Assets module is the register: each asset has a number, category, holder, cost and book value, a monthly run posts depreciation journals, and the register prints on A4 with totals by category.
- See fixed assets
- Full and final settlement
- Full and final settlement, also called final pay, is the last payment an employer makes when an employee leaves. It covers salary up to the last working day, unused annual leave, any end-of-service benefit the law or contract requires, and bonus or expenses owed, less tax and contributions withheld, notice shortfall where allowed and unrecovered advances. Many countries set a deadline for final pay.
- In SimpleERP: A terminated employee is included once in the run for the month they leave, with the days after their termination date counted as unpaid. Add leave payouts and any end-of-service benefit as Other earning lines and recover any advance balance on that payslip.
- See payroll
G
- Gross vs net salary
- Gross salary is the total of an employee's earnings for the period, such as salary and allowances, before anything is deducted. Net salary, or take-home pay, is gross salary minus the employee's deductions: income tax withheld, social security, pension and any advance recovery. Employer contributions sit outside both and are added to gross to give the employer's total cost.
- In SimpleERP: Every payslip shows gross pay, each deduction and net pay in words, and the run review totals gross, deductions, employer contributions and net for the month.
- See payroll
I
- Input tax
- Input tax is the VAT or GST a business pays on the goods and services it buys. A registered business usually reclaims it by deducting it from its output tax, the tax it charges customers, and pays the tax authority only the difference. A valid tax invoice is normally needed, and some purchases are blocked from reclaim. Sales tax, as in the United States, generally works differently: tax paid on purchases is a cost.
- In SimpleERP: Every posted bill and expense records its input tax in the input tax account for your country, and the tax summary report shows output tax, input tax and the net to pay by rate. Where sales tax applies, tax on purchases is added to the cost instead.
- See tax invoice format
J
- Journal entry
- A journal entry is the basic record in double-entry accounting: a dated set of debit and credit lines to accounts, with total debits equal to total credits and a note of why. Most entries are created by business documents such as invoices, bills and payments. Manual journal entries cover the rest, such as loan instalments, bank charges, provisions or year-end adjustments.
- In SimpleERP: Every invoice, bill, payment, payslip and depreciation run posts its own journal linked to the document; manual journals show a running difference and cannot post until they balance, and once posted they are reversed, not edited.
- See accounting
L
- Leave encashment
- Leave encashment, or payment in lieu of leave, is a cash payment for annual leave an employee has not taken. Depending on the employer's policy and local law, it is paid when the employee leaves, at year end for leave above the carry-forward limit, or both. It is usually worked out as one day's salary multiplied by the number of unused days.
- In SimpleERP: SimpleERP keeps leave balances and carries leave forward up to the limit set on each leave type, but does not compute encashment. Work out the amount and add it to the payslip as an Other earning line.
- See hr, attendance & leave
- Ledger
- A ledger is the record of every debit and credit posted to one account, in date order, with a running balance. The general ledger is the set of all ledger accounts a business keeps, from cash and bank to sales, rent and each customer. In many accounting packages a ledger simply means an account. The trial balance is the list of each ledger's closing balance.
- In SimpleERP: Every account in SimpleERP's chart of accounts opens as a ledger with a running balance, filters for date, party and branch, and CSV export. A customer's or supplier's ledger is their statement of account, printable for any date range.
- See accounting
- Lock date
- A lock date is the date on or before which no transaction can be added, changed or cancelled in the books. Accountants set it after closing a month or filing a return, so figures already reported cannot shift because of a late correction. Anything that needs changing is then recorded in an open period instead, which keeps reported figures and the books in agreement.
- In SimpleERP: One lock date applies to the whole business, and PostgreSQL refuses any posting, cancellation or reversal dated on or before it; moving it back needs its own permission and is recorded in the audit log.
- See accounting
- Loss of pay (LOP)
- Loss of pay, or LOP, is the reduction in an employee's salary for working days they are not paid for: unauthorised absence, unpaid leave, or leave taken beyond the balance. It is usually applied by scaling each pro-rated earning by paid days over working days. Deductions worked out as a percentage of pay, such as a pension contribution, then follow the reduced amount.
- In SimpleERP: Payroll reads attendance and leave: an absent day counts as 1 unpaid day, a half day as 0.5 and unpaid leave as 1, and each pro-rated component is scaled by paid days over working days.
- See hr, attendance & leave
N
- Negative stock
- Negative stock is when the records show less than zero of a product in a warehouse, because more was sold, transferred or consumed than was recorded as coming in. It nearly always means a purchase bill or receipt was entered late or not at all, or goods went out from the wrong warehouse. Negative stock makes cost of goods sold unreliable until the missing receipt is entered.
- In SimpleERP: By default the SimpleERP database refuses any sale, transfer or work order that would take a warehouse below zero and names the product and warehouse. You can allow negative stock in settings; when stock is at or below zero, the next receipt sets the average cost at that receipt's rate.
- See inventory
O
- Opening balance
- An opening balance is the amount an account holds on the first day of a set of books, carried in from the closing balance of the old books or a year-end statement. Cash, bank, loans, customer dues, supplier dues, stock and fixed assets all need one when a business switches software. Together they must balance, with the difference going to capital or an opening balance equity account.
- In SimpleERP: SimpleERP's opening balances wizard takes account balances, then customer and supplier dues, then posts one journal with the balancing line to Opening Balance Equity. Opening stock goes in through a stock adjustment and older fixed assets through the asset form.
- See opening balances
- Overtime pay
- Overtime pay is the extra wage an employer pays for hours worked beyond the normal working day or week. Many countries set a minimum premium for covered workers, often one and a half times the ordinary rate, and limits on overtime hours; contracts may pay more. The ordinary hourly rate is usually monthly pay divided by working days and daily hours.
- In SimpleERP: SimpleERP records check-in and check-out times and worked hours, but does not calculate overtime pay. Work out the amount and add it to the payslip with Add line → Other earning.
- See hr, attendance & leave
P
- Payment receipt
- A payment receipt is the document a seller gives a customer to acknowledge money received: who paid, how much, on what date, by what method and against which invoices. For the customer it is proof of payment; for the seller it is the record behind the cash or bank entry. A receipt does not replace the tax invoice; it settles it.
- In SimpleERP: In SimpleERP a payment recorded against a customer prints as a receipt numbered like RCPT-2026-0041, listing the invoices it settled; auto-allocate fills the oldest open invoices first.
- See payments & receivables
- Payroll register
- A payroll register, also called a salary or wage register, is a report of one pay period with a row for each employee and a column for each earning and deduction, ending in net pay. Its totals give the month's gross pay, each statutory deduction to pay over and the net to transfer, and they must match the salary journal. Many countries require wage records to be kept.
- In SimpleERP: The payroll register report lists every payslip in a run with each component as a column and totals at the foot, and exports to CSV from the run.
- See payroll
- Payslip
- A payslip is the statement an employee receives for each pay period, showing paid days, each earning, each deduction and the net pay. It is the employee's proof of income for loans, rent and tax, and the employer's record of what was withheld for income tax, social security and pension on the employee's behalf.
- In SimpleERP: Payslips are generated from each employee's salary structure and the month's attendance, print on white A4 with net pay in words, and appear in the employee's self-service once the run is approved.
- See payroll
- Petty cash
- Petty cash is a small amount of cash kept at the office or factory for minor expenses such as tea, courier, taxi fares and stationery. Under the imprest system the float starts at a fixed amount, every spend is supported by a slip, and the float is topped up by exactly the amount spent, so cash in hand plus slips always equals the fixed float.
- In SimpleERP: SimpleERP has no separate petty cash module. Add a cash account named Petty cash, top it up with Quick transfer from the bank, and record each spend as an expense paid from it; its register shows a running balance.
- See accounting
- Prepaid expense
- A prepaid expense is an amount paid in advance for goods or services the business will use in later periods, such as a year's insurance premium or rent paid ahead. Because the benefit is still to come, it is held as a current asset and moved to expense month by month as it is used, so each month carries only its own share.
- In SimpleERP: SimpleERP does not spread prepaid costs automatically. Add a Prepaid expenses asset account, post the payment there, and each month post a manual journal moving that month's share to the expense.
- See accounting
- Profit and loss statement
- A profit and loss statement, or P&L, shows a business's income and expenses over a period, such as a month, a quarter or a financial year, and the profit or loss that results. It typically runs from sales, less cost of goods sold to gross profit, then less operating expenses to net profit. It is the first report most owners read, and the one a lender asks for alongside the balance sheet.
- In SimpleERP: The P&L is read from posted journal lines for any period you choose, with the previous period beside it, and because every invoice posts its cost of goods sold, gross profit is current on any day.
- See accounting
- Proforma invoice
- A proforma invoice is a preliminary bill a seller sends before the sale, showing the items, quantities, prices, tax and total the buyer will pay. It is not a tax invoice: it creates no tax liability, no sale in the books and no amount owed. Buyers use it to arrange payment, release an advance or get internal or bank approval before the goods are supplied.
- In SimpleERP: SimpleERP has no separate proforma invoice document. A quotation does the job: it prints the items, tax and total with an expiry date, and converts to a sales order or tax invoice once the buyer agrees.
- See invoicing & tax
- Provision
- A provision is an amount charged to profit for a liability or loss that is likely but not yet certain in amount or timing, such as customer dues that may not be paid, warranty repairs, or income tax for the year. It follows prudence: expected losses are recognised now. A provision is reviewed each period and increased, used against actual losses, or released.
- In SimpleERP: SimpleERP does not calculate provisions. Read the receivables ageing, add a provision account to the chart, and post a manual journal against the matching expense; reverse or adjust it at the next review.
- See accounting
- Purchase order
- A purchase order (PO) is the document a buyer sends a supplier to order goods or services, listing items, quantities, agreed rates, taxes, delivery date and terms. Once the supplier accepts it, both sides are committed to those terms. It records nothing in the books: the purchase is recorded when the supplier's bill arrives, which is checked against the order.
- In SimpleERP: In SimpleERP you draft a purchase order, send it and confirm it, then convert it to a purchase bill when the supplier's invoice arrives; posting the bill brings the stock in and records what you owe.
- See purchase
Q
- Quotation
- A quotation is a priced offer a seller gives a buyer before a sale: the items or services, quantities, rates, tax, total and how long the prices hold. If the buyer accepts before it expires, the sale goes ahead on those terms. It is not a bill and records nothing in the books. It is also called a quote or an estimate.
- In SimpleERP: SimpleERP quotations carry an expiry date, show as expired after it, and convert to a sales order or straight to a tax invoice once accepted, without retyping a line.
- See invoicing & tax
R
- Raw material
- Raw material is the material a manufacturer buys to turn into its products, such as steel sections, paint, fabric or packing. It is held as inventory until production uses it, then its cost moves into the finished goods. Bought-in parts that go into the product unchanged, such as nuts and bolts, are often called components but are treated the same way in stock and costing.
- In SimpleERP: In SimpleERP a raw material is an ordinary stocked product that appears as a component in a BOM; it is bought on supplier bills, valued at weighted average cost, and consumed by work orders. Group raw materials with a product category to see them together on the stock list.
- See manufacturing
- Reorder level
- A reorder level is the stock quantity at which a product should be bought or made again, set so that new stock arrives before the shelf runs empty. It is usually daily sales multiplied by the supplier's delivery time, plus a safety stock for slow deliveries or busy weeks. Products at or below their reorder level form the day's buying list.
- In SimpleERP: Each stocked product has a reorder level field; products at or below it appear on the low-stock list with the shortfall and the last supplier, and you raise the purchase order yourself from that list. SimpleERP does not work the level out for you, so review it every few months against sales.
- See inventory
- Reorder quantity
- Reorder quantity is the number of units you buy or make each time a product reaches its reorder level. Order too few and you place orders every week; order too many and cash sits on the shelf. It is set by sales rate, supplier pack sizes and minimum orders, or worked out with the economic order quantity formula that balances ordering cost against holding cost.
- In SimpleERP: The low-stock list shows each product's shortfall against its reorder level and its last supplier; you raise the purchase order yourself and type the quantity. There is no reorder quantity field, suggested quantity or EOQ calculation in the product.
- See inventory
- Retained earnings
- Retained earnings are the profits a business has kept since it started, less losses and less what was paid out to owners or shareholders as dividends or drawings. They sit under equity in the balance sheet. Each year's net profit is added at year end. Some company accounts show it as retained profits or the profit and loss reserve.
- In SimpleERP: SimpleERP never posts a closing entry: the balance sheet computes retained earnings for prior years and current year earnings from the ledger, so they always agree with the P&L. Closing a year means setting the lock date.
- See accounting
- Reverse charge
- A reverse charge is a rule under which the buyer, not the supplier, accounts for the VAT or GST on a purchase. It is used mainly for services bought from overseas suppliers, who are not registered in the buyer's country, and in some countries for certain domestic trades. The buyer records the tax as output tax and, where allowed, reclaims the same amount as input tax.
- In SimpleERP: Where your country's profile uses the reverse charge, as in the United Arab Emirates and the United Kingdom, a bill from an overseas supplier with lines carrying no tax self-assesses tax at your standard rate as both output and input tax, and the tax summary shows it.
- See purchase
- Row-level security (RLS)
- Row-level security is a database feature that decides, for every row of every table, which user or tenant may see or change it. In business software that serves many companies, it means one company's data cannot be read by another even if application code has a bug, because the database itself enforces the boundary on every query.
- In SimpleERP: Every SimpleERP table that holds a business's data has a PostgreSQL row-level security policy that admits only rows whose business id matches the signed-in session. The application sets that id per request, and the database applies the check to every read and write.
- See security
S
- Salary arrears
- Salary arrears are amounts owed to an employee for earlier pay periods that were not paid at the time. They most often arise when a raise is approved with an effective date in the past, and also from a pay error or a delayed revision. Arrears are worked out month by month as new pay minus old pay, then paid as a separate earning in the current month.
- In SimpleERP: Past payroll runs are frozen once approved, so a back-dated raise does not rewrite them. Add the difference with Add line → Arrears on this month's payslip; deductions set as a percentage of gross include it automatically.
- See payroll
- Sales order
- A sales order is the seller's record of a confirmed customer order: what was ordered, at what price and by when. It sits between the quotation and the tax invoice. It does not move stock or post to the books; it tracks what has been promised, so the seller can deliver and bill in parts and always see what is still to be invoiced.
- In SimpleERP: In SimpleERP a sales order comes from an accepted quotation or is entered directly, can be billed in parts and always shows what is left to invoice; stock and the books change only when each invoice posts.
- See invoicing & tax
- Scrap
- Scrap is material lost or left over during production: offcuts from cutting steel, paint that does not stick, or parts rejected at inspection. Expected scrap is planned as a percentage of each component in the bill of materials, so the work order issues enough material and the finished product carries the cost of what was wasted. Scrap that can be sold, such as steel offcuts, still has some value.
- In SimpleERP: SimpleERP BOM lines take a scrap percentage from 0 to 99.99 that raises planned quantities and the cost roll-up, and actual extra waste is entered as higher consumption when the work order completes. Scrap is not recorded as a by-product; to sell offcuts, add them as a product and bring them in with a stock adjustment.
- See manufacturing
- SKU
- An SKU, stock keeping unit, is a short code a business gives each distinct product it stocks, so that similar items are never confused on a bill, a shelf label or a count sheet. Two racks that differ only in shelf count get two SKUs. SKUs are your own codes, unlike HS codes, which are international customs codes shared by everyone.
- In SimpleERP: Every product in SimpleERP has an SKU, filled in automatically as P-00001 and onward or typed in by you, and a duplicate SKU is refused. Products can be searched by SKU, and SKUs appear on the stock list and job cards.
- See inventory
- Statement of account
- A statement of account is a dated list of every transaction with one customer or supplier over a period: opening balance, invoices, payments, credit and debit notes, and the running and closing balance. Sellers send it to show what is owed and to agree balances with the other side. It summarises documents already issued; it is not a new bill.
- In SimpleERP: SimpleERP builds a customer or supplier statement for any date range from posted documents, with opening balance, running balance, closing balance and an ageing summary, ready to print or share.
- See payments & receivables
- Statutory deductions
- Statutory deductions are amounts the law requires an employer to deduct from an employee's pay and pass to a government body or scheme, such as income tax withheld, social security or national insurance, and compulsory pension contributions. Until paid over they are the employer's liabilities. Voluntary deductions, such as an advance recovery or a canteen charge, are not statutory.
- In SimpleERP: Your country's statutory deductions are seeded as payroll components, such as PAYE and National Insurance in the UK or PAYG withholding in Australia. You set the amounts or rates, since SimpleERP does not compute tax tables, and approving a run credits them to Statutory Deductions Payable (2210).
- See payroll
- Stock adjustment
- A stock adjustment is a document that corrects the recorded quantity of a product to match the shelf, after a physical count or when goods are damaged, lost or found. It records the reason, changes quantity in a warehouse, and posts the value of the change to the books, so the gap between system and shelf has an explanation instead of an overwritten number.
- In SimpleERP: In SimpleERP you type the counted quantity, it works out the difference from the system figure, and posting moves stock and writes the journal; reasons are opening stock, physical count, damaged, expired, lost, found and other. Cancelling a posted adjustment reverses it rather than deleting it.
- See inventory
- Stock ageing
- Stock ageing is an analysis that groups the goods you hold by how long they have been in stock, in buckets such as 0 to 30, 31 to 90, 91 to 180 and over 180 days. Old buckets point to slow-moving and dead stock, cash tied up and goods that may need to be valued below cost. Auditors and lenders often ask for it at year end.
- In SimpleERP: SimpleERP does not have a stock ageing report. Filter the movement ledger by product to receipts and sales and export the stock on hand list to CSV, then bucket the quantities in a spreadsheet, as in the example.
- See inventory
- Stock transfer
- A stock transfer moves goods from one warehouse, shop or site to another within the same business. Quantity falls in the source and rises in the destination by the same amount, at the same cost, so total stock and its value stay unchanged. It is not a sale; within one tax registration no tax is charged, and a transfer note travels with the goods.
- In SimpleERP: SimpleERP transfers show what is available in the source as you type, move the quantity at average cost when posted, post no journal entry, and print a transfer note with prepared-by and received-by lines. Cancelling a transfer moves the goods back.
- See inventory
- Stock valuation
- Stock valuation is working out the money value of the goods a business holds, using a costing method such as weighted average or FIFO. The value appears as inventory on the balance sheet, and it decides cost of goods sold and therefore profit. Under IAS 2 and most national standards, stock is valued at cost or net realisable value, whichever is lower.
- In SimpleERP: SimpleERP values all stock at weighted average cost per product, and the stock on hand report shows total value beside the inventory account balance with the difference, which should be zero. It does not write stock down to net realisable value for you; post a stock adjustment or journal for that.
- See inventory
- Suspense account
- A suspense account is a temporary account that holds an amount until the bookkeeper knows where it belongs, such as a bank credit with no name, or a difference that stops the trial balance from agreeing. It is a parking place, not a home: every entry in it should be moved to the right account, and its balance should be zero before the books are closed.
- In SimpleERP: SimpleERP's database refuses any journal whose debits and credits differ, and opening balance differences go to Opening Balance Equity, so no suspense balance ever appears on its own. To park an unidentified receipt, add a Suspense account to the chart and post a manual journal.
- See accounting
T
- Trial balance
- A trial balance is a list of every account in the ledger with its closing debit or credit balance on a given date. Because each journal entry has equal debits and credits, the two column totals must be equal. Accountants use it to check the books before preparing the profit and loss statement and the balance sheet, which are both built from the same balances.
- In SimpleERP: The trial balance is read from posted journal lines for any date, and since the database refuses unbalanced journals, its totals always agree; it exports to CSV for your accountant.
- See accounting
U
- Unit of measure (UoM)
- A unit of measure, or UoM, is the unit a product is counted, bought, sold and stored in, such as pieces (Nos), kilograms, metres or litres. It also sets how many decimal places a quantity may have: racks are whole numbers, paint can be 20.50 kg. Some tax systems ask for a standard unit code on invoices, such as NOS or KGS.
- In SimpleERP: SimpleERP gives each product one unit, seeded at sign-up and editable, each with 0 to 4 decimal places. It does not convert between units, such as boxes bought and pieces sold, so keep such a product in its smallest unit and enter bills in that unit.
- See inventory
W
- Weighted average cost
- Weighted average cost is a stock valuation method that gives every unit of a product the same cost: total stock value divided by quantity on hand. Each receipt blends its cost into the average, and each sale or issue leaves at the current average. It smooths price changes and needs only quantity and value per product, which makes it practical for businesses that buy often.
- In SimpleERP: SimpleERP values every product at weighted average cost across the whole business, recalculated by the database on each receipt; sales, transfers and work orders all issue at the current average. It is the only method offered.
- See weighted average cost
- Work order
- A work order is an instruction to make a set quantity of a product from its bill of materials. It moves from planned to in progress to completed. On completion it records what was really consumed, takes those components out of stock, and adds the finished goods at their actual cost, so stock and the books show what production truly used.
- In SimpleERP: SimpleERP work orders plan materials from the default BOM, show what is available in the source warehouse, print a job card, and on completion post consumption, output and overhead in one step. A work order completes once, so split long runs into several orders.
- See manufacturing
- Write-off
- A write-off removes the value of an asset from the books once it has no realistic value left: a customer due that will not be paid, stock that is damaged or lost, or a machine scrapped with nothing received. The remaining book value is charged to profit as a loss, so the balance sheet stops showing something the business no longer has.
- In SimpleERP: Fixed assets have a Write off action that posts the loss, and damaged stock goes through a stock adjustment. There is no bad-debt button: post a journal from Bad debts to Accounts Receivable with the customer, and note that the invoice itself still shows as due.
- See fixed assets
Z
- Zero-rated and exempt sales
- A zero-rated sale is a taxable sale charged at 0%: the customer pays no tax, but the seller can still reclaim the input tax on costs used to make it. Exports are usually zero-rated. An exempt sale is outside the tax altogether, such as many financial or medical services in some countries, and the input tax on costs used to make it usually cannot be reclaimed.
- In SimpleERP: Where your country has them, SimpleERP seeds a 0% zero-rated rate and an exempt rate, as in the United Kingdom and the United Arab Emirates, and the tax summary lists zero-rated and exempt sales on their own rows, including no-tax sales to overseas customers.
- See tax invoice format
For businesses in India
- Advance receipt under GSTIndia
- An advance receipt is a payment received before goods or services are supplied. As notified since November 2017, a regular taxpayer pays no GST on advances for goods; tax is due when the invoice is raised. For services, GST is due when the advance is received. For goods or services, the supplier issues a receipt voucher for the advance. The tax paid on the advance is adjusted against the final invoice, or refunded if the supply never happens.
- In SimpleERP: Record the advance as a receipt from the customer with no invoice allocated, and SimpleERP holds it on the party until you apply it to the invoice. SimpleERP does not post GST on the advance; ask your accountant how to report it for services.
- See payments & receivables
- Aggregate turnoverIndia
- Aggregate turnover is the total value of all taxable supplies, exempt supplies, exports and inter-state supplies made by everyone with the same PAN across India, computed on an all-India basis. It excludes the GST itself and inward supplies taxed under reverse charge. It is the figure that decides the registration threshold, composition eligibility, e-invoicing and whether GSTR-9 is optional.
- In SimpleERP: SimpleERP shows the taxable value of every invoice and credit note in the sales register, across all branches, with CSV export. Add exempt and export sales, which carry no tax, to get your figure.
- See reports & dashboard
- B2B and B2C invoicesIndia
- A B2B invoice is issued to a buyer registered under GST and carries the buyer's GSTIN, so the buyer can claim input tax credit. A B2C invoice is issued to a consumer or an unregistered buyer. In GSTR-1, B2B invoices are reported one by one, large inter-state B2C invoices one by one, and other B2C sales as totals by state and rate.
- In SimpleERP: Each customer in SimpleERP has a GSTIN and a tax treatment such as registered, unregistered or consumer. The sales register shows the GSTIN against every invoice, so B2B and B2C rows sort apart for GSTR-1.
- See gst invoice format
- Bill of supplyIndia
- A bill of supply is the document a business issues instead of a tax invoice when it charges no GST: for exempt goods or services, or when it is a composition dealer, which pays tax on turnover and cannot collect it from buyers. It carries the same basic details as a tax invoice, the parties, a serial number, date, HSN or SAC and value, but no tax rate or amount. The buyer cannot claim input tax credit on it.
- In SimpleERP: SimpleERP prints an invoice as a bill of supply, with no tax rows, when the business has no GSTIN in its settings. It has no composition-scheme or exempt-goods mode for a registered business, so a composition dealer cannot yet issue bills of supply from it.
- See gst invoice format
- Casual taxable personIndia
- A casual taxable person is someone who occasionally makes taxable supplies in a state or union territory where they have no fixed place of business, such as a trader selling at an exhibition. They must register in that state whatever their turnover, at least five days before starting, and deposit an advance amount of the estimated tax. The registration is valid for a limited period, as notified.
- In SimpleERP: Add the fair as a branch with the temporary GSTIN and its state, and invoices raised from it charge GST by that state's place of supply. SimpleERP does not apply for the registration or file its returns.
- See team, roles & settings
- CessIndia
- Cess under GST is the compensation cess, a levy charged on top of GST on a short list of goods so that states could be compensated for lost revenue. It is shown as its own line on the invoice, and cess paid on purchases can be credited only against cess on sales. From 22 September 2025 it was removed from most goods and continues mainly on tobacco and related products.
- In SimpleERP: SimpleERP does not calculate or report cess. If you sell goods that attract cess, bill them in software that supports it and check the treatment with your CA; for goods without cess, such as most furniture and hardware, nothing changes.
- See gst rate changes 2025
- CGSTIndia
- CGST, Central Goods and Services Tax, is the central government's share of GST on a supply made within one state. It is charged alongside SGST, or UTGST in some union territories, each at half the total rate, so an 18% supply carries CGST 9% and SGST 9%. On a supply between two states, IGST is charged instead of CGST and SGST.
- In SimpleERP: SimpleERP applies CGST and SGST automatically when the place of supply is in the billing branch's state and posts each to its own output tax account. Each half is rounded to the paisa on its own, so CGST and SGST always match.
- See place of supply
- Composition schemeIndia
- The composition scheme is an optional GST scheme for small businesses with aggregate turnover up to ₹1.5 crore, or ₹75 lakh in some special category states. They pay tax at a flat rate on turnover, commonly 1% for traders and manufacturers, cannot charge GST to buyers or claim input tax credit, issue bills of supply, and cannot make inter-state sales. Service providers have a separate option up to ₹50 lakh.
- In SimpleERP: SimpleERP has no composition-scheme mode: it does not compute composition tax, and a business with a GSTIN prints tax invoices. It is built for regular GST registrations, so a composition dealer should talk to us before choosing it.
- See invoicing & tax
- CTC (cost to company)India
- CTC, cost to company, is the total amount an employer spends on an employee in a year. It adds the employer's contributions, such as provident fund and ESI, and any benefits the employer pays for, to the employee's gross pay. Offer letters usually quote CTC, so the employee's take-home pay is lower than CTC divided by twelve.
- In SimpleERP: The salary structure builder previews gross earnings, deductions, net pay, employer contributions and the monthly cost to company as you set each line.
- See salary structure in india
- Delivery challanIndia
- A delivery challan is a document that goes with goods when they move without a sale at that moment, such as goods sent for job work, on approval, or when the quantity is not known until delivery. Under GST it carries a serial number, date, consignor and consignee details, HSN, quantity and value. It is not a tax invoice and records no sale.
- In SimpleERP: SimpleERP has no delivery challan document yet: stock leaves the godown when the tax invoice is posted, so a business that dispatches before billing raises the invoice with the goods. Moves between your own warehouses use a stock transfer.
- See inventory
- E-invoice (IRN)India
- An e-invoice under GST is a B2B invoice reported to the government's Invoice Registration Portal, which validates it and returns an invoice reference number, the IRN, and a signed QR code to print on the invoice. It is mandatory for businesses whose aggregate turnover crossed ₹5 crore in any year since 2017-18. It does not change what the invoice says, only how it is validated and reported.
- In SimpleERP: SimpleERP does not generate IRNs or e-invoice QR codes. If you are above the threshold, create the invoice in SimpleERP, register it on the government's e-invoice portal to get the IRN and QR code, and give the buyer the registered copy.
- See e-invoicing threshold
- E-way billIndia
- An e-way bill is an electronic document generated on the government's e-way bill system before goods worth more than ₹50,000 in one consignment are moved, whether by road, rail, air or ship. Part A records the supplier, recipient, goods, HSN, value and invoice number; Part B records the vehicle. It is separate from the tax invoice but is built from the same details and travels with the goods.
- In SimpleERP: SimpleERP does not generate e-way bills. Post the invoice in SimpleERP, then create the e-way bill on the government portal from the invoice number, value and HSN codes printed on it.
- See tax compliance
- ESI (Employees' State Insurance)India
- ESI, Employees' State Insurance, is a social security scheme run by the ESIC that gives covered employees medical care and cash benefits during sickness, maternity and injury at work. It applies in covered establishments to employees whose gross pay is up to ₹21,000 a month, as notified. The employee contributes 0.75% of gross and the employer 3.25%.
- In SimpleERP: SimpleERP does not seed ESI. Add an ESI deduction at 0.75% of gross and an employer contribution at 3.25% of gross, and put them only in the salary structures of covered employees.
- See payroll
- Exempt supplyIndia
- An exempt supply under GST is a supply that attracts a nil rate of tax, is wholly exempted by notification, or is a non-taxable supply outside GST. No tax is charged on it, but input tax credit on the purchases used for it is not allowed, so a business making both taxable and exempt supplies must reverse a share of its credit. A bill of supply is issued instead of a tax invoice.
- In SimpleERP: Set a customer's tax treatment to exempt and SimpleERP prints the invoice with no tax and a note that it is exempt. It does not compute the ITC reversal for mixed supplies; your accountant works that out from the registers.
- See invoicing & tax
- Export invoiceIndia
- An export invoice is the tax invoice for goods or services supplied to a buyer outside India. Besides the usual fields, it carries the endorsement "supply meant for export" with either "on payment of IGST" or "under bond or letter of undertaking without payment of IGST", the buyer's name and delivery address, the country of destination and, for goods, the port code and shipping bill number and date.
- In SimpleERP: SimpleERP has no export-specific document and no multi-currency. Set the customer's tax treatment to overseas so the invoice carries no GST, bill in rupees, and add the endorsement, country and shipping bill details in the invoice notes.
- See gst invoice format
- Form 16India
- Form 16 is the certificate an employer gives each employee whose tax was deducted from salary, showing the salary paid and the income tax deducted and deposited for the financial year. Part A, downloaded from the TRACES portal, lists TDS deposited each quarter; Part B shows the salary break-up and tax working. It is generally issued by 15 June after the year ends, as notified.
- In SimpleERP: SimpleERP does not generate Form 16 or file TDS returns. The component summary report and the payroll register give the TDS deducted per month, which your CA uses to file returns and issue Form 16.
- See salary structure in india
- GodownIndia
- A godown is a warehouse or storeroom where a business keeps goods, the word used across India and in Tally for any stock location. A business with more than one godown needs stock counted per godown, so it knows not only how many it has but where they are, and moves goods between godowns with a transfer rather than a sale.
- In SimpleERP: SimpleERP calls godowns warehouses; every business starts with one default warehouse and the warehouse field stays hidden until a second is added. Quantities are kept per warehouse while the average cost is per product across the business.
- See inventory
- GratuityIndia
- Gratuity is a lump sum an employer pays an employee on leaving, retiring or death, for long service. Under the Code on Social Security 2020, formerly the Payment of Gratuity Act, it is 15 days' wages for each completed year, due after five years of continuous service, or one year for a fixed-term employee. Wages are last drawn Basic and dearness allowance, divided by 26. Check the current rules.
- In SimpleERP: SimpleERP does not compute or provide for gratuity. Work out the amount, add it as an Other earning line on the employee's final payslip, or pay it with a manual journal if you keep a gratuity provision.
- See payroll
- GSTIndia
- GST, the Goods and Services Tax, is India's tax on the supply of goods and services, charged at each stage of the chain with credit for tax already paid on inputs, so each business pays tax only on the value it adds. Within a state it is split into CGST and SGST; between states it is IGST. Rates are set per HSN or SAC code by the GST Council.
- In SimpleERP: SimpleERP seeds GST rates at setup and applies them on every invoice, bill and note from the product's rate and the place of supply. It records output and input tax in their own accounts and shows the net in the GST summary; it does not file returns.
- See invoicing & tax
- GST registration thresholdIndia
- The GST registration threshold is the aggregate turnover in a financial year above which a business must register for GST. As notified, it is ₹40 lakh for suppliers of only goods, or ₹20 lakh in special category states, and ₹20 lakh for suppliers of services, or ₹10 lakh in special category states. Some suppliers, such as inter-state sellers of goods and casual taxable persons, must register at any turnover.
- In SimpleERP: SimpleERP shows sales to date on the dashboard and every invoice's taxable value in the sales register, so you can watch turnover approach the limit. It does not apply for registration.
- See invoicing & tax
- GSTINIndia
- A GSTIN, GST Identification Number, is the 15-character number given to every GST-registered business. The first two digits are the state code, the next ten are the business's PAN, then comes an entity number for registrations under the same PAN in that state, the letter Z by default, and a check digit. A business registered in several states has a separate GSTIN in each, all sharing one PAN.
- In SimpleERP: SimpleERP checks a GSTIN's format and check digit as you type it on your business, a branch or a party, and reads the state from the first two digits. That state then drives CGST and SGST or IGST on every document.
- See gstin validator
- GSTR-1India
- GSTR-1 is the GST return in which a registered business reports its outward supplies: B2B invoices one by one, B2C sales in summary, credit and debit notes, an HSN-wise summary and a count of documents issued. It is filed monthly or quarterly. The B2B details flow to buyers' GSTR-2B statements, so a mistake in your GSTR-1 can cost your customers their input tax credit.
- In SimpleERP: SimpleERP does not file returns. Its sales register lists every posted invoice with GSTINs, place of supply and tax, and the HSN summary matches the GSTR-1 HSN table; both export to CSV for your accountant.
- See tax compliance
- GSTR-2A vs GSTR-2BIndia
- GSTR-2A and GSTR-2B both list the purchases your suppliers have reported in their returns. GSTR-2A is dynamic: it updates whenever a supplier files or amends, even months later. GSTR-2B is a static statement generated once a month for a fixed period, and it is the basis for the input tax credit you may claim in GSTR-3B. Both are read-only and come from the GST portal.
- In SimpleERP: SimpleERP does not download GSTR-2A or GSTR-2B. Its purchase register lists every posted bill with the supplier GSTIN, invoice number and tax by head, so you can export it and match it against GSTR-2B line by line.
- See gstr-2b reconciliation
- GSTR-2BIndia
- GSTR-2B is a monthly statement the GST portal generates for each business, listing the input tax credit available from invoices its suppliers have reported in their GSTR-1. It is generated on the 14th of the following month and is fixed for that period, though actions in the portal's Invoice Management System can recompute it before you file GSTR-3B. Businesses match it with their purchase register before claiming credit.
- In SimpleERP: SimpleERP's purchase register lists every posted bill with the supplier's GSTIN, bill number and tax, and exports to CSV so your accountant can match it line by line with GSTR-2B. SimpleERP does not download GSTR-2B from the portal.
- See gstr-2b reconciliation
- GSTR-3BIndia
- GSTR-3B is the summary GST return in which a registered business declares its total outward supplies, the input tax credit it claims and the net tax it pays, filed monthly or quarterly. It is where tax is actually paid, from the cash ledger or by setting off credit. Its sales figures should agree with GSTR-1 and its credit with GSTR-2B, or the portal raises questions.
- In SimpleERP: SimpleERP does not file GSTR-3B. Its GST summary shows output tax, input tax and the net payable by CGST, SGST and IGST for any period, from the same posted invoices and bills, and exports to CSV for your accountant.
- See tax compliance
- GSTR-9India
- GSTR-9 is the annual return a regular GST taxpayer files for each financial year. It consolidates the outward supplies, inward supplies, tax paid and input tax credit already reported month by month in GSTR-1 and GSTR-3B, and lets you report corrections. As of the last notification it is optional for businesses with aggregate turnover up to ₹2 crore; check the GST portal for the current limit and due date.
- In SimpleERP: SimpleERP does not file GSTR-9. Its sales and purchase registers, GST summary and HSN summary for April to March, each with CSV export, give your accountant the year's totals to fill the return.
- See reports & dashboard
- HSN codeIndia
- An HSN code, from the Harmonised System of Nomenclature, is the number that classifies goods for GST and customs, such as 9403 for many kinds of furniture. The code decides the GST rate and is printed on each tax invoice line. How many digits you must show depends on your annual turnover: currently four for turnover up to ₹5 crore and six above it.
- In SimpleERP: In SimpleERP the HSN code is set once on each product, prints on every invoice line and groups the HSN summary, which matches the HSN table of GSTR-1 and exports to CSV.
- See hsn codes and table 12
- IGSTIndia
- IGST, Integrated Goods and Services Tax, is charged on supplies between two states and on imports, at the full GST rate. The central government collects it and then settles the destination state's share. An 18% supply from Tamil Nadu to Kerala carries IGST 18% instead of CGST 9% and SGST 9%, so the buyer pays the same total either way.
- In SimpleERP: SimpleERP compares the customer's place of supply with the branch's state on every line and switches the rate to its IGST twin when they differ, with a notice in the editor. IGST is posted to its own output tax account and shown separately in the GST summary.
- See place of supply
- Input tax credit (ITC)India
- Input tax credit is the GST a business has paid on its purchases, which it can set off against the GST it collects on its sales, so tax is paid only on the value it adds. Credit is generally available only with a valid tax invoice, goods or services actually received, the supplier having reported the invoice so it shows in GSTR-2B, and the supplier having paid the tax.
- In SimpleERP: SimpleERP records input tax on every posted bill and expense in its own CGST, SGST and IGST input accounts and shows it in the GST summary. It does not decide eligibility, so blocked or reversed credits are for your accountant to adjust with a journal entry.
- See purchase
- Late fee and interest under GSTIndia
- Under GST, a late fee is charged for each day a return is filed after its due date, and interest is charged on tax paid late. As notified, the late fee for GSTR-3B and GSTR-1 is ₹50 a day, or ₹20 a day for a nil return, subject to caps that depend on turnover. Interest is 18 percent a year on the tax paid late in cash, counted from the day after the due date.
- In SimpleERP: SimpleERP does not compute late fees or interest and does not file returns. Its sales and purchase registers and GST summary are ready on the first of the month, which removes the usual reason for filing late.
- See reports & dashboard
- LUT (Letter of Undertaking)India
- An LUT, or Letter of Undertaking, is a declaration filed on the GST portal in Form GST RFD-11 that lets a registered exporter export goods or services, or supply to an SEZ, without paying IGST. The exporter undertakes to complete the export within the time allowed. It is valid for one financial year and is filed before the first export of the year. Without it, the exporter pays IGST and claims a refund.
- In SimpleERP: SimpleERP does not file the LUT or produce export documents. Set the customer's tax treatment to overseas and invoices carry no GST, then add the LUT declaration and number in the invoice notes.
- See invoicing & tax
- Nil-rated supplyIndia
- A nil-rated supply is a supply of goods or services that carries a GST rate of 0 percent in the rate schedule. No tax is charged, and it is treated as an exempt supply, so input tax credit on the purchases used for it is not allowed. It differs from a zero-rated supply such as an export, where the credit is kept. Nil-rated sales are reported in GSTR-1 table 8.
- In SimpleERP: SimpleERP seeds a GST 0% rate at setup; put it on a nil-rated product and its lines carry no tax. The sales register then shows those sales with zero tax for your table 8 totals.
- See invoicing & tax
- Place of supplyIndia
- Place of supply is the location GST law treats as where a supply happens, and it decides which tax applies. If it is in the supplier's own state, CGST and SGST apply; if it is in another state, IGST applies. For goods it is generally where the movement of goods ends; for most services it is the location of a registered buyer, or of the buyer's address on record otherwise.
- In SimpleERP: SimpleERP sets the place of supply from the customer's GSTIN or address, prints it on the invoice, and compares it with the branch's state on every line to pick CGST and SGST or IGST.
- See place of supply
- Professional tax (PT)India
- Professional tax is a tax on employment, trades and professions levied by some Indian states and, in some, by local bodies. Employers deduct it from salaries and pay it to the state or local body. Slabs, amounts and whether it is deducted monthly or half-yearly differ by state, some states levy none, and the Constitution caps it at ₹2,500 a year per person.
- In SimpleERP: PT is a fixed deduction you set per employee and can adjust on any payslip; it is posted to the Statutory Deductions Payable account on approval. SimpleERP does not look up state slabs or file PT returns.
- See salary structure in india
- Provident fund (PF)India
- Provident fund is a retirement savings scheme run by the Employees' Provident Fund Organisation, funded by monthly contributions from employee and employer. The commonly cited employee contribution is 12% of basic pay and dearness allowance, matched by the employer, part of which goes to the pension scheme. Coverage is mandatory up to a ₹15,000 monthly wage ceiling, as notified. Employers deduct the employee's share and deposit both every month.
- In SimpleERP: PF at 12% of Basic for the employee, and the employer's matching 12% as a contribution, are seeded components you can edit per employee. Depositing PF and filing returns happen outside SimpleERP.
- See salary structure in india
- Receipt voucherIndia
- A receipt voucher is the accounting record of money coming in: cash, cheque, UPI or bank transfer received, the account it landed in and who paid it. In Tally-style books it is the Receipt voucher type. Under GST, a receipt voucher is also the document a supplier issues when it receives an advance before supplying goods or services.
- In SimpleERP: SimpleERP has no separate receipt voucher screen: a recorded customer payment is the receipt voucher, posts the bank or cash entry and prints as a receipt. Money received before an invoice stays on account until you allocate it.
- See payments & receivables
- Reverse charge mechanism (RCM)India
- The reverse charge mechanism is a GST rule under which the buyer, not the supplier, pays the tax on certain notified supplies, such as legal services from an advocate, goods transport by a transport agency in some cases, security services and some rentals from unregistered landlords. The buyer pays this tax in cash through GSTR-3B and can then usually claim it back as input tax credit.
- In SimpleERP: SimpleERP has no reverse charge flag on bills. Record the supplier's bill without tax, and have your accountant post a journal entry for the RCM tax payable and the matching input credit, then pay it through GSTR-3B.
- See tax compliance
- SAC codeIndia
- A SAC code, Services Accounting Code, classifies services for GST in the way HSN codes classify goods. Every SAC code starts with 99, followed by digits for the service group and type, such as 9987 for maintenance, repair and installation services. The code links to the service's GST rate, prints on every service invoice line and is reported in the HSN summary of GSTR-1.
- In SimpleERP: In SimpleERP a service is a product with a SAC code and a rate, so it bills on the same invoice as goods. The code prints on the line and the service is grouped in the HSN summary.
- See professional services
- SGST and UTGSTIndia
- SGST, State Goods and Services Tax, is the state government's share of GST on a supply within that state, charged together with CGST at half the total rate each. In union territories without their own legislature, such as Chandigarh, UTGST is charged instead of SGST. SGST collected in one state goes to that state and cannot pay tax owed in another.
- In SimpleERP: SimpleERP applies SGST with CGST on every supply where the place of supply is the branch's own state. Tax rates and their component names can be edited in Settings, so a business billing from a union territory can name the state half UTGST.
- See gst invoice format
- Tax invoiceIndia
- A tax invoice is the document a GST-registered business issues for a taxable supply. It must show the supplier's and, if registered, the buyer's names, addresses and GSTINs, a unique serial number of up to 16 characters, the date, HSN or SAC codes, taxable value, the rate and amount of each tax and the place of supply. A buyer needs a valid tax invoice to claim input tax credit.
- In SimpleERP: Every SimpleERP invoice carries the mandatory GST fields, numbered by financial year such as INV-2026-27-0213, and prints as a clean A4 page. Posted invoices cannot be edited; a credit note corrects them.
- See gst invoice format
- Tax periodIndia
- A tax period under GST is the period for which a return is filed. For most taxpayers it is a calendar month: GSTR-1 and GSTR-3B are filed monthly. Small taxpayers with aggregate turnover up to ₹5 crore may opt for the QRMP scheme, filing quarterly returns while paying tax monthly. The annual return covers the financial year from April to March.
- In SimpleERP: Pick the month or quarter as the date range on the sales and purchase registers, GST summary or HSN summary in SimpleERP, and export the CSV for the period. Posted invoices are locked, so a filed period does not change underneath you.
- See reports & dashboard
- TDS on salaryIndia
- TDS, tax deducted at source, on salary is income tax an employer deducts from each month's pay based on the employee's estimated tax for the year under the regime they choose. The employer deposits it with the government, files quarterly returns and issues an annual certificate, Form 16. TDS also applies to many other payments, such as rent, professional fees and contract work.
- In SimpleERP: TDS is a fixed payslip deduction you set per employee, usually from your accountant's working, posted to the Statutory Deductions Payable account on approval. SimpleERP does not compute income tax, file TDS returns or issue Form 16.
- See salary structure in india
- Time of supplyIndia
- Time of supply is the point at which a supply is treated as made and GST on it becomes payable. For goods it is generally the date of the invoice, or the last date by which it should have been issued. For services it is generally the earlier of the invoice date and the payment date, if the invoice is issued on time. It decides the tax period and, when rates change, the rate.
- In SimpleERP: SimpleERP does not compute time of supply separately. Each posted invoice falls in the sales register by its invoice date, so raise the invoice when the goods leave and the month and rate come out right.
- See invoicing & tax
- UTGSTIndia
- UTGST, Union Territory Goods and Services Tax, is charged with CGST on supplies made within a union territory that has no legislature of its own, such as Chandigarh, Ladakh or Lakshadweep. It replaces SGST there at the same half rate. Supplies into or out of a union territory are inter-state and carry IGST, so UTGST only arises when supplier and place of supply are in the same territory.
- In SimpleERP: SimpleERP seeds CGST and SGST rates for every business. Tax rates and their component names are editable in Settings, so a branch in a union territory can carry a CGST plus UTGST rate; talk to us before you set one up and we will check it with you.
- See place of supply
- Voucher (Tally term)India
- A voucher is the document or entry that records one business transaction in the books, with its date, number, accounts and amounts. Tally sorts vouchers into types such as sales, purchase, payment, receipt, contra and journal. Each voucher posts an equal debit and credit, and its number is how an auditor traces an entry back to the paper or document behind it.
- In SimpleERP: SimpleERP has no separate voucher screen: the document is the voucher. Invoices, bills, payments, expenses and payroll each post their own numbered journal, and anything else goes in a manual journal, which prints on A4 as a journal voucher.
- See moving to simpleerp
- Zero-rated supplyIndia
- A zero-rated supply under GST is an export of goods or services, or a supply to a Special Economic Zone unit or developer. No tax is finally borne on it, yet the supplier may still claim input tax credit on the purchases used to make it. The supplier either exports under an LUT without paying IGST and claims a refund of unused credit, or pays IGST and claims that refund.
- In SimpleERP: Set an export customer's tax treatment to overseas and SimpleERP bills with no GST, while the GST on your purchase bills still posts as input credit. For an SEZ unit, pick the IGST rate by hand and SimpleERP keeps it.
- See invoicing & tax
Related
Go deeper
India
GST invoice format
The fields a GST tax invoice must carry, how place of supply picks CGST and SGST or IGST, HSN and SAC codes, and a worked invoice.
Read moreWeighted average cost
How weighted average cost values stock and cost of goods sold, with the formula, a worked example and how it compares with FIFO.
Read moreWhat is ERP software?
A plain explanation of ERP software for small businesses: the modules, how one invoice flows through them and when you need one.
Read moreFAQ
Twenty straight answers about getting started, tax in your country, the modules, team roles, and data and security.
Read more
Run your whole business from one simple place.
Seven days free. No card. Your first invoice in minutes.