Volume 10 · Article #33 (Appendix C) A–Z Accounting & ERP Dictionary Jargon-Free Definitions
The Complete A–Z Plain-English Accounting, SARS VAT & ERP Glossary
Bookmark this page! Whenever you encounter an accounting, tax, treasury, or supply-chain term in Keystone X—or in a meeting with your accountant or SARS auditor—look it up below for a crystal-clear, jargon-free explanation and where to find it in the app.
| Term / Acronym | Plain-English Explanation | Where It Lives in Keystone X |
|---|---|---|
| 2/10 Net 30 (Early-Settlement Discount) | A payment term meaning the invoice is due in 30 days, but the customer gets a 2% discount if they pay within 10 days. Used to accelerate cash inflow. | PaymentTerm/index |
| 3-Way Match (PO → GRN → Bill) | The golden rule of procurement fraud prevention: before paying a supplier's invoice, verify that (1) you ordered the items on an approved Purchase Order (PO), (2) your warehouse physically counted them on a Goods Received Note (GRN), and (3) the supplier's Expense Bill matches the PO price and GRN quantity. | PurchaseOrder/* & expense/* |
| ABC Pareto Classification | Grouping inventory items by revenue/value velocity: Class A (top ~80% of value, tightest stock control), Class B (next ~15%), and Class C (bottom ~5%, low-cost consumables). | inventory/index & report/stockValuation |
| Accounts Payable (AP / Creditors) | Money your business owes to suppliers and service providers for stock or operating expenses bought on credit (`GL 2000`). | vendor/*, PurchaseOrder/*, expense/* |
| Accounts Receivable (AR / Debtors) | Money your customers owe you for Tax Invoices you have issued that have not yet been paid (`GL 1100`). | customer/*, invoice/*, report/agedReceivables |
| Accrual (Invoice) Basis vs. Cash Basis | Under the Accrual / Invoice Basis (standard for companies and SARS VAT), revenue and VAT are recorded on the date the Invoice is issued, even if the customer pays next month. Under the Cash / Payments Basis, VAT is only accounted for when cash actually clears the bank. | TaxRate/settings & report/settings |
| Available Working Capital | Your real spending power across your bank vaults, calculated as: $\text{Book Balance} + \text{Approved Bank Overdraft Limits}$. | BankAccount/index |
| Chart of Accounts (COA) | The numbered directory of every financial bucket in your General Ledger: Assets (`1000`), Liabilities (`2000`), Equity (`3000`), Revenue (`4000`), Direct Cost of Sales (`5000`), and Operating Expenses (`6000`). | Cashbook/index?view_mode=coa |
| Contra Entry / Inter-Account Transfer | Moving cash between two of your own bank or petty cash accounts (`TRF-XXXX`), or reversing a posted journal entry (`JNL-XXXX`) with an equal-and-opposite entry so neither Revenue nor Expenses are distorted. | BankAccount/index?view_mode=transfers & Cashbook/reverseJournal |
| Cost of Goods Sold (COGS / COS) | The direct purchase cost of the physical inventory items you sold to customers during the period (`GL 5000`). Subtracted from Revenue to calculate Gross Profit. | report/sales & Cashbook/index |
| Credit Note (`CRN-XXXX`) | An official statutory document that reduces or cancels a previously issued Tax Invoice (for example, when a customer returns faulty goods). In accounting and SARS law, you never delete a finalized Tax Invoice—you issue a Credit Note so the Output VAT (`GL 2200`) and AR Debtor balance (`GL 1100`) are reversed with a full audit trail. | CreditNote/index |
| Customer Credit Wallet (Retainer / Unallocated Credit) | A ring-fenced credit balance held on a customer's profile created when they pay an upfront retainer, overpay an invoice, or choose to keep a Credit Note refund on account. Can be applied to pay future invoices in 1 click without touching bank cash twice. | payment/index?view_mode=wallets & customer/view/{id} |
| Debit (DR) & Credit (CR) | The two sides of every double-entry transaction: • A Debit (DR) increases Assets (`Bank`, `AR Debtors`, `Inventory`) and Expenses (`COGS`, `OPEX`), and decreases Liabilities, Equity, and Revenue. • A Credit (CR) increases Liabilities (`AP Creditors`, `VAT Payable`), Equity, and Revenue (`Sales`), and decreases Assets and Expenses. In every transaction, $\sum \text{Debits} = \sum \text{Credits}$. |
Cashbook/index & Cashbook/addJournal |
| EOM (End of Month Terms) | A trade credit formula (such as 30 Days EOM) where the countdown only starts at the end of the calendar month in which the invoice was issued (e.g., an invoice dated `12 Oct` moves to `31 Oct` + 30 days = due `30 Nov`). |
PaymentTerm/index |
| FIFO / FEFO / WAVCO | Methods for valuing and picking inventory batches: • FIFO (First-In, First-Out): Oldest purchased stock batch is sold/costed first. • FEFO (First-Expired, First-Out): Batch with the nearest expiry date is picked first (crucial for medical, food, or chemical stock). • WAVCO (Weighted Average Cost): Averages the cost of all units currently on hand. |
inventory/index & admin/settings#inventory-governance |
| Goods Received Note (`GRN-XXXX`) | The warehouse receiving voucher recorded when a supplier's delivery truck arrives. Increases on-hand warehouse stock, creates a FIFO/FEFO cost batch, and registers incoming unit serial numbers. | PurchaseOrder/receive/{id} |
| Input VAT vs. Output VAT | • Output VAT (`GL 2200`): The 15% VAT you charge customers on sales (you collect it on behalf of SARS). • Input VAT (`GL 2210`): The 15% VAT you pay to VAT-registered suppliers on business purchases and expenses. • Net SARS Position (`Box 20`): $\text{Output VAT} - \text{Input VAT}$. If positive, you pay SARS; if negative, SARS refunds you. |
TaxRate/index & report/sarsVat201 |
| Pro-Forma Invoice vs. Tax Invoice | • A Pro-Forma Invoice is a commercial commitment/deposit request sent before final billing. It does NOT trigger a SARS Output VAT liability or deduct physical stock yet. • A Tax Invoice is the final legal accounting document under Section 20 of the VAT Act that recognizes Revenue, deducts inventory, posts AR Debt, and declares Output VAT. |
quote/* & invoice/* |
| RMA (Return Merchandise Authorization) | The structured workflow for receiving a defective serialized unit back from a customer, inspecting whether it falls under warranty, repairing/replacing/crediting it, and returning it to the original supplier if under vendor warranty. | inventory/trackSerial & CreditNote/add |
| Section 17(2) Prohibited Input VAT | SARS rule stating that businesses generally cannot claim back Input VAT on client entertainment, staff meals/refreshments, club subscriptions, or passenger motor cars (`ENT-NON` tax code with `0% Claimable Input`). | TaxRate/index & expense/add |
| Section 20 Tax Invoice Rules | SARS VAT Act rule requiring an Abridged Tax Invoice for supplies between `R 50` and `R 5,000`, and a Full Tax Invoice (displaying both the seller's and buyer's legal names, physical addresses, and 10-digit SARS VAT numbers) for any supply exceeding `R 5,000`. | TaxRate/index?mode=compliance & invoice/* |
| Segregation of Duties (SoD) | Internal security principle ensuring no single staff role holds conflicting permissions that could conceal errors or fraud (e.g., creating a supplier, approving a PO, and signing off the payment). | admin/roles?mode=sod |
| Trial Balance | An accounting schedule listing the ending Debit or Credit balance of every account in your Chart of Accounts. Proves that total ledger Debits equal total ledger Credits ($\sum \text{DR} = \sum \text{CR}$). | Cashbook/index?view_mode=trial_balance |
| WIP (Unbilled Work-in-Progress) | Billable technician hours, project milestones, and job card spares that have been logged and performed for a client, but have not yet been converted onto a Customer Tax Invoice. | project/*, task/*, jobcard/* |