Glossary
Business terms, explained plainly
253 terms from the invoices, ledgers, menus and stock registers Indian business owners work with every day — each with a formula, an example and the free Setu tool that does the maths for you.
253 terms
A
- ABC AnalysisSorting stock into A, B and C classes by value contribution.
- Accounts PayableMoney you owe suppliers for goods or services already received.
- Accounts ReceivableMoney customers owe you for goods or services already delivered.
- Accrual AccountingRecording income and expenses when they occur, not when paid.
- Accrued ExpenseA cost incurred but not yet billed or paid.
- Advance PaymentMoney received before goods or services are delivered.
- Aggregator CommissionThe cut a delivery platform takes from each order.
- Aging ReportOutstanding balances grouped by how long they have been due.
- AmortisationSpreading the cost of an intangible asset over its useful life.
- Amortisation ScheduleA table showing how each EMI splits between interest and principal.
- API IntegrationTwo systems exchanging data automatically.
- AttritionThe rate at which employees leave and must be replaced.
- Audit TrailA tamper-evident record of who changed what, and when.
- Average CoverAverage spend per guest in a period.
- Average Order ValueAverage revenue per order in a period.
B
- Bad DebtA receivable you have accepted will not be collected.
- Balance SheetWhat a business owns and owes on one specific date.
- Bank ReconciliationMatching your cash book against the bank statement.
- BarcodeA scannable code that identifies a product at the till.
- Barcode ScannerA device that reads a barcode and enters the item instantly.
- Basic SalaryThe core fixed component that other pay elements are built on.
- Basket SizeHow many items an average customer buys in one visit.
- Batch NumberA code identifying goods produced or received together.
- Bill of SupplyThe document used when no GST can be charged on a supply.
- Billing SoftwareSoftware that produces compliant bills and keeps a record of them.
- Break-Even PointThe sales level where total revenue exactly covers total costs.
- Browser StorageData saved inside your own browser rather than on a server.
- Budget VarianceThe difference between what you budgeted and what actually happened.
- Bundle PricingSelling several items together at a single lower price.
C
- Capital ExpenditureMoney spent acquiring or improving long-lived assets.
- Cash Basis AccountingRecording income and expenses only when money moves.
- Cash Conversion CycleDays between paying for stock and collecting from customers.
- Cash DrawerThe lockable drawer holding counter cash, opened by the POS.
- Cash FlowThe actual movement of money in and out of the business.
- Cash Flow StatementWhere cash actually came from and went during a period.
- Cash on DeliveryPayment collected from the customer at the point of delivery.
- Central KitchenA shared production kitchen supplying several outlets.
- CessAn additional levy charged on top of tax for a specific purpose.
- CGSTThe central government's half of GST on a sale within one state.
- ChargebackA card payment reversed by the customer's bank after a dispute.
- Chart of AccountsThe master list of every account your books record against.
- Cheque BounceA cheque returned unpaid, usually for insufficient funds.
- Churn RateThe share of customers who stop buying from you.
- Closing StockThe value of stock on hand at the end of a period.
- Cloud BackupA copy of your business data kept somewhere else.
- Cloud KitchenA delivery-only kitchen with no dining area.
- Cohort AnalysisTracking groups of customers who started in the same period.
- CollateralAn asset pledged to a lender as security for a loan.
- Composition SchemeA simplified GST route where small businesses pay a flat rate on turnover.
- Comps and VoidsComplimentary items and cancelled bills, and the controls around them.
- Consignment StockSupplier-owned stock you only pay for once it sells.
- Contra EntryA transfer between your own cash and bank accounts.
- Contribution MarginWhat each sale contributes toward fixed costs after variable costs.
- Conversion RateThe share of visitors or enquiries that become sales.
- Cost of Goods SoldThe direct cost of the goods actually sold in a period.
- Cost PriceWhat an item cost you before any margin is added.
- Cost-Plus PricingSetting price by adding a fixed percentage to cost.
- Coupon CodeA code that unlocks a specific offer at checkout.
- CoversThe number of guests served in a period.
- Credit EntryThe right side of a journal entry, recorded as Cr.
- Credit LimitThe maximum outstanding you allow a customer to carry.
- Credit NoteA document that reduces the value of an invoice already issued.
- Cross-SellingOffering a complementary item alongside the purchase.
- CSV ExportDownloading your data as a spreadsheet-readable file.
- CTCThe employer's total annual cost of employing someone.
- Current RatioCurrent assets divided by current liabilities.
- Customer Acquisition CostWhat it costs, on average, to win one new customer.
- Customer Lifetime ValueThe total profit expected from a customer over the whole relationship.
- Cycle CountCounting a small slice of stock often instead of everything at once.
D
- Days Payable OutstandingThe average number of days you take to pay suppliers.
- Days Sales OutstandingThe average number of days customers take to pay you.
- Dead StockGoods that have not sold and probably will not.
- Dearness AllowanceA cost-of-living component that rises with inflation.
- Debit EntryThe left side of a journal entry, recorded as Dr.
- Debit NoteA document that increases the value of an invoice already issued.
- Debt-to-Equity RatioHow much of the business is funded by debt versus owners' money.
- DepreciationSpreading an asset's cost across the years it is used.
- Dine-InFood ordered and eaten on the premises.
- DiscountA reduction from the normal price of a product or service.
- Double-Entry BookkeepingRecording every transaction twice, as a debit and a matching credit.
- Dynamic QR CodeA payment QR that already carries the exact bill amount.
E
- E-InvoicingReporting invoices to the government portal to get them authenticated.
- E-Way BillThe electronic permit needed to move goods above a threshold value.
- EBITDAOperating earnings before interest, tax, depreciation and amortisation.
- Economic Order QuantityThe order size that minimises ordering plus holding costs.
- EMIA fixed monthly loan repayment covering interest and principal.
- EquityWhat the owners would be left with after all debts are paid.
- ESIStatutory health and disability insurance for lower-wage employees.
- Expiry TrackingMonitoring shelf life so stock is used before it expires.
F
- FIFOSelling and valuing the oldest stock first.
- Financial YearThe twelve-month period a business reports its accounts for.
- Fixed AssetA long-lived item bought to use rather than to sell.
- Fixed CostCosts that stay the same whether you sell anything or not.
- Flat Rate InterestInterest charged on the original amount for the whole tenure.
- Food Cost PercentageThe share of food sales consumed by the ingredients behind them.
- Food Cost VarianceThe gap between what stock should have been used and what was.
- FootfallThe number of people entering your premises.
- Form 16The annual TDS certificate an employer issues to an employee.
G
- General LedgerEvery transaction sorted into the account it belongs to.
- Goods Receipt NoteThe record confirming what was physically received.
- Google Business ProfileThe free listing that puts a business on Google Search and Maps.
- GratuityA lump sum paid to employees who complete long service.
- Gross ProfitSales minus the direct cost of what was sold.
- Gross SalaryTotal earnings before any deductions.
- Gross SalesTotal billed sales before returns and discounts.
- GSTIndia's single indirect tax on the supply of goods and services.
- GSTINThe 15-character registration number that identifies a GST-registered business.
- GSTR-1The monthly or quarterly return listing everything you sold.
- GSTR-2BThe auto-drafted statement of the input tax credit available to you.
- GSTR-3BThe summary return where GST liability is declared and paid.
H
I
- IGSTThe single GST charged on interstate supplies instead of a CGST plus SGST split.
- Income TaxTax on the income of a person or business for a financial year.
- Input Tax CreditThe GST you paid on purchases, set off against the GST you collected on sales.
- Interest RateThe percentage cost of borrowing money for a period.
- Inventory TurnoverHow many times you sell and replace your stock in a period.
- Invoice NumberingThe sequential series that identifies each invoice you issue.
- Invoice Reference NumberThe unique hash the invoice portal returns when an e-invoice is registered.
J
K
L
- Labour Cost PercentageTotal staff cost as a percentage of sales.
- Landed CostThe total cost of getting goods into your store, not just the invoice price.
- Lead TimeThe time between placing an order and receiving the goods.
- Leave EncashmentPaying an employee for unused leave.
- LIFOValuing sales at the most recent purchase cost first.
- Loyalty ProgramA structured reward for customers who keep coming back.
M
- MarkdownA permanent price cut used to clear stock that is not moving.
- MarkupThe amount added to cost, expressed as a percentage of cost.
- MDRThe percentage a merchant pays to accept a card or digital payment.
- Menu EngineeringRanking dishes by popularity and profit to redesign the menu.
- Menu MixThe share of total sales each dish accounts for.
- Menu Price PaddingRaising online menu prices to absorb commission and packaging.
- Minimum Order QuantityThe smallest quantity a supplier will accept in one order.
- Minimum WagesThe lowest wage legally payable for a category of work.
- ModifierA customisation attached to an ordered item.
- MRPThe highest price a packaged product may legally be sold for in India.
- Multi-Outlet ManagementRunning several locations with comparable data and control.
N
- Net 30Payment due in full thirty days from the invoice date.
- Net Present ValueFuture cash flows discounted back to what they are worth today.
- Net ProfitWhat remains after every cost, including tax and interest.
- Net SalesSales after returns, cancellations and discounts.
- Nil ReturnA return filed for a period with no transactions to report.
- No-ShowA booked party that never arrives.
O
- Offline ModeSoftware that keeps working when the internet does not.
- Online ReviewsPublic customer ratings that shape whether new customers try you.
- Opening StockThe value of stock on hand at the start of a period.
- Operating ExpenseThe day-to-day costs of running the business, below gross profit.
- Operating MarginOperating profit as a percentage of sales.
- OverdraftA credit limit on your current account you can dip into as needed.
- OverheadRunning costs not tied to any one product or sale.
- OvertimeExtra pay for hours worked beyond normal working hours.
P
- PANThe ten-character income tax identity of a person or business.
- Par LevelThe standard quantity of an item to keep on hand.
- Payback PeriodHow long an investment takes to return its own cost.
- Payment GatewayThe service that authorises and routes online card and wallet payments.
- Payment TermsThe agreed deadline and conditions for paying an invoice.
- PayrollThe process of paying staff and handling every statutory deduction.
- PayslipThe monthly statement of earnings and deductions given to an employee.
- Petty CashA small cash float for minor day-to-day payments.
- Place of SupplyThe location that decides whether a supply is intra-state or interstate.
- Plate CostThe total ingredient cost of one served portion.
- Point of SaleThe system where a sale is rung up, billed and recorded.
- Portion ControlServing a consistent, measured quantity every single time.
- Pour CostThe cost of liquor poured as a percentage of beverage sales.
- Prepaid ExpenseA cost paid in advance for a future period.
- Price ElasticityHow much demand changes when you change the price.
- Prime CostFood cost plus labour cost, the two biggest controllables.
- PrincipalThe borrowed amount itself, excluding interest.
- Professional TaxA small state-level tax deducted from salaries.
- Profit and Loss StatementIncome and expenses over a period, ending in profit or loss.
- Profit MarginProfit expressed as a percentage of the selling price.
- Provident FundA statutory retirement saving with employer and employee contributions.
- ProvisionAn estimated liability recognised before the exact amount is known.
- Psychological PricingSetting prices to read cheaper than they are.
- Purchase OrderA formal order to a supplier stating what you agreed to buy.
- Purchase Price VarianceThe gap between the price you expected to pay and what you paid.
- Purchase ReturnGoods sent back to a supplier after receipt.
Q
- QR MenuA menu customers open by scanning a code at the table.
- QSRA counter-service format built around speed and throughput.
- Queue ManagementOrganising who waits, for how long, and what they are told.
- Quick RatioLiquidity measured without counting inventory.
- QuotationA priced offer sent before the work or supply happens.
R
- ReceiptThe printed or digital proof of a completed sale.
- Recipe CostingWorking out exactly what one plate of a dish costs to make.
- Reducing Balance InterestInterest charged only on the outstanding loan balance.
- Referral ProgramRewarding existing customers for bringing new ones.
- RefundReturning money to a customer for a cancelled or returned sale.
- Reorder PointThe stock level at which you place the next order.
- Repeat RateThe share of customers who buy more than once.
- Retained EarningsProfits kept in the business rather than paid out.
- Retention RateThe share of customers who keep buying from you.
- Return on Ad SpendRevenue generated for every rupee of advertising spent.
- RevenueThe total value of what you sold before any costs.
- Reverse Charge MechanismRules where the buyer, not the seller, pays the GST on a purchase.
- RFM AnalysisScoring customers by recency, frequency and spend.
- ROIThe gain from an investment relative to what it cost.
- Role-Based AccessGiving each user only the access their job requires.
S
- SAC CodeThe service classification code that fixes the GST rate on a service.
- Safety StockExtra stock held to absorb demand spikes and late deliveries.
- Sales ReturnGoods a customer sends back after being billed.
- Sales TaxA tax added at the point of final sale to the consumer.
- Same-Store SalesSales growth measured only at outlets open in both periods.
- Self-OrderingCustomers placing their own orders without staff.
- Sell-Through RateThe share of received stock sold within a period.
- Selling PriceThe price a customer actually pays for one unit.
- Service ChargeAn optional charge a restaurant adds for service.
- SettlementThe transfer of collected money into the merchant's bank account.
- SGSTThe state government's half of GST on a sale within one state.
- Shift RosterThe planned schedule of who works which shift.
- ShrinkageStock that disappears between receiving and selling.
- SKUA unique code for one exact sellable variant.
- Special AllowanceThe balancing salary component after basic and named allowances.
- Static QR CodeA fixed payment QR where the customer enters the amount.
- Statutory BonusAn annual payment to eligible employees, minimum set by law.
- Stock TakePhysically counting everything you hold and comparing it with the books.
- Stock TransferMoving stock between outlets, stores or a central kitchen.
- StockoutHaving no stock of something a customer wants to buy.
- Straight-Line DepreciationCharging the same depreciation amount every year.
- SupplierA business you buy goods or services from.
- Suspense AccountA temporary holding account for entries you cannot yet classify.
T
- Table ManagementTracking table status so the floor is used efficiently.
- Table Turnover RateHow many times a table is used during a service period.
- Take-Home SalaryWhat actually reaches the employee's bank account.
- TakeawayFood packed for the customer to carry away.
- TANThe registration number required to deduct and deposit TDS.
- Tax Exclusive PricingQuoting a price to which tax is added at billing.
- Tax Inclusive PricingDisplaying one price that already contains the tax.
- Tax InvoiceThe GST document that lets your customer claim input tax credit.
- Taxable ValueThe value GST is charged on, after discounts and before tax.
- TCSTax the seller collects from the buyer on specified transactions.
- TDSIncome tax withheld by the payer before a payment is made.
- Thermal PrinterA printer that burns an image onto heat-sensitive paper.
- Ticket TimeHow long an order takes from acceptance to ready.
- Tip PoolingCollecting tips together and dividing them by an agreed rule.
- Token SystemNumbered tokens that tell customers when their order is ready.
- Trial BalanceA list of all ledger balances, checking debits equal credits.
U
V
W
- WastageStock that is paid for but never sold.
- Weighted Average CostValuing stock at the blended average of what you paid.
- WhatsApp MarketingReaching customers through WhatsApp messages and broadcasts.
- Working CapitalCurrent assets minus current liabilities — the cash cushion for operations.
- Working Capital LoanBorrowing to fund stock, receivables and day-to-day operations.
- Written-Down ValueDepreciating a fixed percentage of the reducing book value.