ERP & accounting glossary
31 plain-English definitions of the ERP, accounting, inventory and Pakistan tax terms — from double-entry and landed cost to NTN, STRN and FBR digital invoicing.
Accounting basics
The core bookkeeping terms every business owner meets first.
ERP (Enterprise Resource Planning)
ERP is software that runs a business's core operations — accounting, inventory, sales, purchasing, manufacturing and reporting — in one system with one shared database. Instead of separate accounting software, Excel stock sheets and a standalone billing tool, every department works on the same live data, so a sale updates stock, accounts and reports at the same time. See how AmalERP connects the whole flow on the supply chain page.
Double-entry accounting
Double-entry accounting is a bookkeeping method where every transaction is recorded in at least two accounts — a debit in one and an equal credit in another — so the books always balance. For example, a cash sale debits Cash and credits Sales, keeping assets, liabilities, income and expenses in agreement automatically. Full explainer: what is double-entry accounting?
Chart of accounts
A chart of accounts is the organised list of all the accounts a business uses to classify its transactions — typically grouped into assets, liabilities, equity, income and expenses. Every journal entry posts to accounts from this list, so a clean chart of accounts is what makes reports like the profit & loss and balance sheet meaningful.
General ledger
The general ledger is the master record of every financial transaction a business has posted, organised account by account. Each account's ledger shows its debits, credits and running balance, and it is the single source from which the trial balance, profit & loss and balance sheet are built.
Trial balance
A trial balance is a report listing every ledger account with its debit or credit balance at a point in time, used to check that total debits equal total credits. In a double-entry system the two columns must match; if they don't, a posting error exists somewhere in the books.
Journal entry
A journal entry is the record of a single transaction in debit-and-credit form, showing which accounts are affected, by how much, on what date and why. In an ERP, most journal entries are created automatically — an invoice, payment or stock movement posts its own entry — with manual entries reserved for adjustments.
Accounts receivable (AR)
Accounts receivable is the money customers owe your business for goods or services sold on credit. It sits as an asset on the balance sheet, and managing it — through ageing reports, credit limits and payment reminders — is what keeps cash flowing in a credit-sales business.
Accounts payable (AP)
Accounts payable is the money your business owes suppliers for goods or services bought on credit. It sits as a liability on the balance sheet, and tracking it by supplier and due date helps you pay on time without paying early or twice.
Tax & compliance (Pakistan)
The FBR and provincial tax terms Pakistani businesses deal with every month. Rates and criteria change with budgets and notifications — always check FBR's latest notification for current rules.
GST (sales tax)
GST, or sales tax, is the tax charged on the supply of taxable goods in Pakistan under the Sales Tax Act, 1990, collected by registered businesses from customers and remitted to FBR. The rate is set by the federal budget and can vary by item, so check FBR's latest notification for the current rate on what you sell. See what a compliant invoice must show: sales tax invoice requirements in Pakistan.
Withholding tax (WHT)
Withholding tax is tax deducted at source: the payer deducts a percentage from certain payments — such as payments to suppliers or contractors — and deposits it with FBR on the payee's behalf. Rates depend on the nature of the payment and whether the payee is on FBR's Active Taxpayer List, so check the latest withholding rate card before deducting.
NTN (National Tax Number)
An NTN is the registration number FBR issues to a taxpayer — individual or business — for income tax purposes in Pakistan. It identifies the taxpayer on returns, invoices and official filings, and businesses commonly need it to open bank accounts, import goods or bid for contracts.
STRN (Sales Tax Registration Number)
An STRN is the registration number FBR issues to a business registered for sales tax in Pakistan. A sales-tax-registered seller must show its STRN on tax invoices, and buyers generally need the supplier's STRN to claim input tax. More in sales tax invoice requirements in Pakistan.
IRN (Invoice Reference Number)
An IRN is the unique number FBR's digital invoicing system assigns to each invoice reported to it electronically. Once an invoice is transmitted and accepted, FBR returns the IRN (with a QR code), which is printed on the invoice as proof it was reported in real time. How it works end to end: FBR digital invoicing guide and AmalERP's FBR digital invoicing integration.
FBR digital invoicing
FBR digital invoicing is Pakistan's system for reporting sales invoices to the Federal Board of Revenue electronically, in real time, at the moment of sale. Notified businesses must integrate their invoicing software with FBR so each invoice is transmitted, assigned an IRN and stamped with a QR code; which businesses are covered is set by FBR notifications, so check the latest one for your sector. Read the FBR digital invoicing guide or see how AmalERP handles it.
Tier-1 retailer
A Tier-1 retailer is a category of larger retailers defined in Pakistan's Sales Tax Act — based on criteria such as being part of a national or international chain, operating in an air-conditioned shopping mall, or crossing thresholds FBR specifies — that must integrate their point-of-sale systems with FBR for real-time sales reporting. The exact criteria are updated by law and notification, so check FBR's latest definition before classifying yourself. Details: FBR POS integration for Tier-1 retailers.
SRB (Sindh sales tax on services)
SRB is the Sindh Revenue Board, the provincial authority that collects sales tax on services provided in Sindh. In Pakistan, sales tax on goods is federal (FBR) while sales tax on services is provincial — so a Karachi service business registers with SRB, charges Sindh sales tax on services at the rate SRB notifies, and files its returns with SRB rather than FBR.
Input tax vs output tax
Output tax is the sales tax you charge customers on your sales; input tax is the sales tax you pay suppliers on your purchases. A registered business generally pays FBR the difference — output tax minus admissible input tax — in its monthly return, which is why keeping supplier tax invoices (with valid STRNs) matters: they are your input-tax claim.
Inventory & costing
How stock is tracked and valued — the terms behind accurate margins.
Landed cost
Landed cost is the full cost of getting a product into your warehouse — the purchase price plus freight, customs duty, insurance, clearing and handling charges. Importers who value stock at invoice price alone understate cost and overstate profit; spreading these extra charges across items gives the true per-unit cost. Full explainer: what is landed cost?
FIFO (First In, First Out)
FIFO is an inventory costing method that assumes the oldest stock is sold first, so cost of goods sold uses the earliest purchase prices and remaining stock is valued at the most recent ones. It mirrors how most physical goods actually move, especially perishables. Compare methods: FIFO vs weighted-average costing.
Weighted-average costing
Weighted-average costing values inventory at the average cost of all units on hand, recalculated each time new stock is purchased at a different price. It smooths out price fluctuations — useful when the same item is bought repeatedly at changing rates — and is the method AmalERP uses to keep stock value and cost of goods sold current automatically. See FIFO vs weighted-average costing and the overview of inventory costing methods.
Batch / lot tracking
Batch (or lot) tracking records which production or purchase batch each unit of stock belongs to, along with attributes like manufacturing and expiry dates. It lets pharmacies, food and FMCG businesses sell first-expiry-first-out, spot near-expiry stock early, and trace any batch through purchases and sales if a recall is needed. Guide: batch & expiry tracking — part of AmalERP inventory management.
Serial / IMEI tracking
Serial (or IMEI) tracking follows each individual unit of stock by its unique serial number — such as a mobile phone's IMEI — from purchase through sale and warranty. It is essential for high-value items like mobiles, laptops and batteries, where you need to know exactly which unit went to which customer. Guide: serial / IMEI tracking for mobile & electronics — see it in AmalERP inventory.
Sales & purchase cycle
The documents that move goods and money between you, your customers and your suppliers.
GRN (Goods Received Note)
A GRN is the document that records goods physically received from a supplier — what arrived, in what quantity and condition — usually checked against the purchase order. It updates stock on receipt and gives accounts a basis to verify the supplier's invoice before paying, closing the gap between what was ordered, received and billed.
Delivery challan
A delivery challan is the document that accompanies goods dispatched to a customer, listing what is being delivered and to whom — issued at delivery time, before or alongside the invoice. In Pakistan it is the standard proof-of-dispatch for credit sales and partial deliveries, and in an ERP it reduces stock at dispatch and later converts into the sale invoice.
Sale order
A sale order is a confirmed customer order recording what was agreed — items, quantities, prices and delivery terms — before goods are delivered or invoiced. It anchors the order-to-cash cycle: deliveries and invoices are created from it, so you can always see what is ordered versus delivered versus billed. See the full flow: the order-to-cash sales cycle in an ERP and AmalERP's supply chain module.
Purchase order (PO)
A purchase order is a formal document a buyer sends a supplier committing to buy specified items at agreed quantities and prices. It starts the procure-to-pay cycle — goods are received against it (via a GRN) and the supplier's invoice is matched to it — giving you control over what was ordered versus what you are being billed for. Part of the procure-to-pay flow in AmalERP supply chain.
Manufacturing
The terms behind turning raw material into finished goods.
BOM (Bill of Materials)
A BOM is the recipe for a manufactured product: the list of raw materials, components and quantities needed to make one unit of a finished item. Production orders consume materials according to the BOM, which is how an ERP calculates production cost and keeps raw-material stock accurate as you manufacture. See AmalERP manufacturing for BOMs and production orders.
Work in progress (WIP)
Work in progress is inventory that has entered production but is not yet a finished product — raw materials and labour already consumed by jobs still on the floor. WIP is tracked as its own stock value so the cost of unfinished goods isn't lost between raw-material stock and finished-goods stock. Tracked in AmalERP manufacturing.
Software terms
The software vocabulary you'll meet when choosing a system.
POS (Point of Sale)
A POS is the system a retail business uses to ring up sales at the counter — scanning items, taking payment and printing receipts. A POS connected to an ERP also updates stock and posts to accounts with every sale, and in Pakistan can transmit invoices to FBR in real time where integration is required. See AmalERP POS, including offline mode and FBR integration.
Cloud ERP
Cloud ERP is ERP software delivered over the internet and used in a web browser or mobile app, with data hosted on the provider's servers instead of a computer in your office. There is no server to buy or maintain, updates arrive automatically, and the same live data is available from any device and any branch.
SaaS (Software as a Service)
SaaS is a way of buying software as an ongoing subscription to an online service rather than a one-time licence installed on your own machines. The provider hosts, maintains and updates the software; you pay per month or year and access it over the internet — the model cloud ERP systems like AmalERP use.
See these terms working in one system
Double-entry accounting, inventory, POS and FBR digital invoicing — connected in AmalERP.
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