Glossary

3-Way Match

A control that checks a Purchase Order, its Goods Receipt, and the vendor’s Bill agree on quantity and price before the bill can be issued - catching over-billing or receiving errors before they post to the ledger.

Accounts Payable (AP)

Money a business owes to its suppliers or vendors for goods or services already received but not yet paid for - the mirror image of Accounts Receivable, on the liabilities side.

Accounts Receivable (AR)

Money owed to a business by its customers for goods or services already delivered but not yet paid for. It sits on the balance sheet as an asset - a promise of future cash, not cash itself.

You invoice a customer ₹50,000 for completed work. Until they pay, that ₹50,000 is Accounts Receivable.

Accrual Accounting

An accounting method that records revenue when it is earned and expenses when they are incurred - regardless of when cash actually changes hands. The default method for any business beyond the smallest scale, and required for most audits.

Cash Basis Accounting

An accounting method that records revenue and expenses only when cash actually moves - simple and matches the bank balance, but blind to money owed or money you owe. Common for very small service businesses; many tax authorities restrict it above a revenue threshold.

Chart of Accounts (COA)

The complete list of every account a business uses to categorize its financial transactions, organized into five groups: Assets, Liabilities, Equity, Income, and Expenses. It is the filing system every transaction lands in.

Customer Credit

Money a customer has overpaid or paid in advance that stays with the business as a liability, available to apply against that customer's future invoices - a wallet, not a refund. Distinct from a refund (money that actually leaves the business).

Days Payable Outstanding (DPO)

The average number of days a business takes to pay its vendors, calculated from total outstanding payables against recent purchase volume. The Accounts Payable mirror of Days Sales Outstanding - a rising DPO can mean either useful cash-flow management or a fraying vendor relationship, depending on why it moved.

Days Sales Outstanding (DSO)

The average number of days it takes a business to collect payment after a sale - calculated as (accounts receivable ÷ monthly revenue) × 30. A rising DSO is an early warning that collections discipline is slipping.

Double-Entry Bookkeeping

The accounting principle that every transaction affects at least two accounts - a debit in one, a matching credit in another - so the books always stay in balance. It is the mechanical foundation nearly all business accounting is built on.

Goods Received Not Invoiced (GRNI)

A short-lived liability recognized the moment stock is physically received but before the vendor’s bill has arrived - "we have the goods but haven’t been billed for them yet." When the bill arrives, it relieves this balance and books the real Accounts Payable in its place.

You receive ₹10,000 of inventory against a Purchase Order. AccountDesq posts Dr Inventory / Cr GRNI immediately - the bill hasn’t even arrived yet.

GSTIN

A business's unique GST registration number in India (Goods and Services Tax Identification Number) - required on every compliant tax invoice once a business crosses its state's registration threshold.

Input Tax Credit (ITC)

Under GST/VAT systems, the mechanism that lets a business offset the tax it paid on business purchases against the tax it collected on sales, remitting only the difference. Claiming it requires a valid, compliant purchase invoice - lose the paperwork, lose the credit.

Maker-Checker

A control where the person who creates or requests an action can never be the one who approves it - true segregation of duties. In AccountDesq this shows up as spending limits: an amount above what a person is allowed to approve routes to a different, permitted approver instead of being rejected outright.

Positive Pay

A fraud-control practice of registering every cheque you issue so that when one is presented for payment, it can be checked against what you actually wrote - catching cheques cleared for the wrong amount, or through the wrong account entirely.

Purchase Price Variance (PPV)

The difference between what a Purchase Order said you’d pay for goods and what the vendor’s Bill actually charged, posted as its own line rather than silently absorbed into inventory cost. A higher bill price than the PO is unfavorable (Dr PPV); a lower one is favorable (Cr PPV).

Reconciliation

The process of comparing two sets of records - most commonly your books against a bank statement - to confirm they agree, and investigating and correcting anything that does not. The regular proof that your records match reality.

Bank reconciliation matches every bank statement line to a recorded transaction in your books.

Trial Balance

A report listing every account in the general ledger with its debit or credit balance, used to verify that total debits equal total credits before preparing financial statements. If it does not balance, an entry somewhere is wrong.