ERP Glossary A–Z
The vocabulary. If you can use these terms correctly in a workshop, you sound like someone who has done this before.
A
ABC analysis — Classifying inventory by annual consumption value: A items ~20% of items / ~80% of value, C items the reverse. Drives how tightly each class is controlled.
Absorption costing — Fixed manufacturing overhead is included in inventory value. Required by IFRS and GAAP for external reporting.
Account determination — Configuration that derives which GL accounts a transaction posts to, from inputs like movement type, valuation class, and condition type. Where most “wrong account” issues are actually fixed.
Account group — Classification of a customer/vendor/GL account that controls the number range, which fields are mandatory, and which views exist.
Accrual — Recognising an expense or revenue before the cash moves. Usually reversed in the following period when the real document arrives.
Accrual accounting — Recognising revenue when earned and expenses when incurred, regardless of cash timing. The basis of all ERP accounting.
ACDOCA — SAP S/4HANA’s Universal Journal table, holding FI, CO, asset, and material ledger line items together.
Activity type — In cost accounting, a measurable output of a cost centre (machine hours, labour hours) with a rate, used to charge cost to orders.
Actual costing — Valuing inventory at the real cost incurred, with periodic settlement redistributing variances. Contrast with standard costing.
AFE (Authorisation for Expenditure) — A capital spending approval document with value thresholds.
Ageing — Grouping open items or inventory by how old they are, in buckets (0–30, 31–60, 61–90, 90+ days).
Allocation — Distributing collected costs from one cost object to others, by a driver or a fixed rule.
Amendment — Creating a corrected version of a cancelled document, linked to the original. The correction pattern in Frappe/ERPNext.
APC (Acquisition and Production Cost) — The gross original cost of a fixed asset, before depreciation.
APS (Advanced Planning and Scheduling) — Planning that considers material and finite capacity simultaneously, with optimisation.
AQL (Acceptable Quality Level) — Statistical sampling standard (ISO 2859 / ANSI Z1.4) defining sample sizes and accept/reject criteria.
AS2 — A secure internet transport protocol for EDI, using S/MIME signing and encryption with MDN receipts.
ASN (Advance Ship Notice) — An electronic notification of a shipment’s contents sent before arrival. EDI 856 / DESADV. Late or wrong ASNs cause retailer chargebacks.
Assessment — A cost allocation method that aggregates costs onto a secondary cost element before distributing them.
Asset under construction (AuC) — An asset accumulating costs during a build, which doesn’t depreciate until capitalised.
ATP (Available to Promise) — The quantity that can be committed to a new order, time-phased, accounting for existing commitments and expected supply.
Availability control — Blocking a spending document that would exceed the remaining budget.
B
Backflush — Automatically consuming components based on reported production output, rather than issuing them manually.
Backorder — An order or line that couldn’t be fulfilled and is awaiting supply.
BAdI (Business Add-In) — SAP’s object-oriented, upgrade-safe enhancement hook.
Balance carryforward — The year-end process that carries balance sheet balances into the new year and closes P&L accounts to retained earnings.
BAPI (Business Application Programming Interface) — A released, stable SAP function module for external access.
Batch (lot) — A quantity of material produced or received together, sharing characteristics and an expiry date. Essential for traceability.
Batch determination — Selecting which batch to issue based on rules: FEFO, characteristics, remaining shelf life.
Best-of-breed — Using specialist products per function rather than one integrated suite.
Bill of Materials (BOM) — The list of components and quantities needed to make a product.
Bill-to — The partner who receives the invoice. May differ from the sold-to and the payer.
Blocked stock — Inventory that exists and is owned but cannot be used or sold.
Blueprint — The design document produced in the explore/design phase, defining to-be processes.
BOM explosion — Recursively expanding a BOM to derive component requirements from a finished-goods demand.
Bonded warehouse — A customs-controlled facility where imported goods are stored with duty deferred. Central to Bangladesh’s RMG export industry.
Brownfield — Converting an existing system in place to a new version. Contrast with greenfield.
Business partner (BP) — A unified master record that can hold multiple roles (customer, vendor, employee) instead of separate masters.
C
CAPA (Corrective and Preventive Action) — The quality process of fixing a problem’s cause and preventing recurrence, with an effectiveness check.
Capitalisation — Recording a cost as an asset rather than an expense, to be depreciated over its useful life.
Catch weight — Selling in one unit (pieces) and pricing in another (kg), where actual weight is only known at picking. Common in meat, cheese, metals.
CDS view (Core Data Services) — SAP’s semantic database view definition, annotated for OData exposure and analytics.
Chargeback — (1) A retailer penalty for a supply chain compliance failure. (2) In distribution, a claim for the difference between contract price and acquisition cost.
Chart of accounts — The structured list of GL accounts a company posts to.
Clean core — The doctrine of not modifying vendor code, extending only via sanctioned mechanisms, so the system remains upgradeable.
Clearing — Matching an open item against its counterpart so both are marked settled.
Clearing account — A temporary account that should net to zero over time, e.g. GR/IR, bank clearing.
Client (mandant) — SAP’s tenant concept; the first field of nearly every table.
Closed loop — MRP II’s principle that shop-floor feedback adjusts the plan.
CO-PA (Profitability Analysis) — Multi-dimensional margin reporting by product, customer, region, channel.
Commitment — Money legally promised but not yet spent, e.g. an open purchase order. Essential for meaningful budget control.
Company code — SAP’s term for a legal entity — the level at which a balance sheet is produced.
Condition record — A dated pricing element (price, discount, freight, tax) found via an access sequence.
Condition technique — The universal ERP pattern for pricing: condition type → access sequence → condition table → pricing procedure.
Consignment — Goods held by one party but owned by another. Vendor consignment sits in your warehouse and isn’t yours; customer consignment sits at their site and is yours.
Consolidation — Combining group entities’ financials into one set of statements, eliminating intercompany transactions.
Contra account — An account with the opposite normal balance to the one it offsets, e.g. accumulated depreciation.
Contract asset — Revenue recognised but not yet invoiced. Also called unbilled receivable.
Contract liability — Invoiced but not yet earned. Also called deferred revenue.
Contribution margin — Revenue minus variable costs. What an incremental sale is actually worth.
Controlling area — The organisational scope within which cost allocations can flow.
Copy control — Configuration governing what data copies when creating one document with reference to another.
Cost centre — A department or unit that collects costs. Permanent, period-based, earns no revenue.
Cost element — Primary (mirrors a P&L account, cost from outside) or secondary (internal allocations only).
Costing sheet — Configuration defining how overhead is applied to cost objects.
CPQ (Configure, Price, Quote) — Tooling for complex configurable product quoting, sitting in front of the ERP.
Credit memo — A document reducing what a customer owes. Also called a credit note.
Critical path — The longest chain of dependent activities in a project; its length is the project duration.
CRP (Capacity Requirements Planning) — Comparing planned load against available capacity, after MRP.
Cross-docking — Moving goods from inbound dock directly to outbound without put-away.
Cumulation — In payroll, a base (taxable gross, pension base) that wage types contribute to, referenced by calculations.
Cutover — The window in which the old system stops and the new one starts.
Cycle counting — Continuous rolling inventory counts, by ABC frequency, instead of one annual count.
D
DAC (Data Access Class) — Acumatica’s entity definition.
Dead letter queue (DLQ) — Where messages go after exhausting retries. Requires an owner and an alert, or it becomes silent data loss.
Decoupling point — Where forecast-driven supply meets order-driven demand. Determines MTS/ATO/MTO/ETO.
Deferred revenue — See contract liability.
Delivery — The document representing goods leaving the warehouse, between the order and the invoice.
Denied party screening — Checking business partners against sanctions lists before transacting.
Depreciation area — A parallel valuation of the same asset under a different rulebook (IFRS, tax, group, insurance).
Derived role — A role that inherits activities from a master role but varies only the organisational values. Essential for multi-site rollouts.
Digital access — SAP’s licensing model charging per document created by non-human/indirect access.
Dimension — An attribute attached to a posting for analysis: cost centre, project, region. Also financial dimension, analytic axis, segment.
Distribution — A cost allocation that moves primary costs on their original GL accounts.
Document flow — The linked chain of documents from order to payment, and the table that records it.
Document type — The classification that controls a document’s number range, screen layout, allowed follow-ons, and posting behaviour.
DocType — Frappe/ERPNext’s metadata definition that generates table, form, API, and permissions.
Down payment — Money paid or received before delivery. Sits as an asset or liability until cleared.
Drum-Buffer-Rope — Theory of Constraints scheduling: the bottleneck sets the pace, a buffer protects it, material release is tied to its consumption.
DSO (Days Sales Outstanding) — Average days to collect receivables.
Dunning — Systematic escalating reminders for overdue receivables.
E
eBOM / mBOM — Engineering BOM (design structure, owned by PLM) vs Manufacturing BOM (what the factory consumes, owned by ERP).
ECO (Engineering Change Order) — A controlled change to a product’s BOM or routing, with effectivity dates.
EDI (Electronic Data Interchange) — Structured B2B document exchange, typically ANSI X12 or EDIFACT.
Effective dating — Attributes valid between a from-date and a to-date rather than a simple current value. Universal in HR and master data.
e-invoicing — Transmitting invoices to a government platform, often requiring clearance before the invoice is legally valid.
Encumbrance — Public sector term for a commitment.
EOQ (Economic Order Quantity) — The order size that minimises combined ordering and carrying cost.
ERP II — Gartner’s 2000 term for ERP extended to partners and the web.
Escalation — Automatic routing of an overdue approval to a higher authority.
ETO (Engineer to Order) — Designing and building to a specific customer order.
Exception message — MRP output telling a planner what needs attention: reschedule, expedite, cancel.
Exchange rate type — Which rate to use: spot, average, closing, historical, planning, customs.
F
Factory calendar — Defines working days per plant. Drives lead times and scheduling. Regional working weeks (Sun–Thu in Bangladesh and the Gulf) matter here.
FEFO (First Expired, First Out) — Picking by earliest expiry. Mandatory for food and pharma.
Field status group — Configuration controlling which fields are required, optional, or suppressed on a posting.
FIFO (First In, First Out) — Consuming the oldest cost layer first. The IFRS default for inventory.
Firecall / break-glass — Controlled emergency elevated access, time-limited and fully logged.
Fiscal year variant — Configuration defining the periods of a fiscal year and how dates map to them.
Fit-gap analysis — Comparing requirements against standard functionality to identify what must be built or changed.
Flexfield — Oracle EBS’s extension mechanism: key flexfields (the account structure) and descriptive flexfields (custom fields).
Four-eyes principle — Two people must be involved: the preparer cannot be the approver.
Free goods — Buy-N-get-one promotions. Inclusive (one of the N is free) or exclusive (an extra item added).
G
Gapless numbering — Legally required sequential document numbering with no missing numbers, per entity per year.
GL (General Ledger) — The book of record where all financial transactions ultimately post.
Golden record — The authoritative version of a master data entity across systems.
GR/IR (Goods Receipt / Invoice Receipt) — The clearing account bridging the gap between receiving goods and receiving the supplier’s invoice. Aged balances indicate process breakdowns.
Greenfield — A new implementation with data migration, rather than converting an existing system.
GS1 — The standards body behind GTIN, SSCC, GLN, and GS1-128 barcodes.
GTIN (Global Trade Item Number) — The GS1 product identifier; EAN/UPC are variants.
H
HANA — SAP’s in-memory columnar database, which collapsed the OLTP/OLAP split.
Handling unit (HU) — A physical package with its own identifier, containing materials and possibly nested HUs.
Header/item — The near-universal document structure: one header, many line items.
Hierarchy — Effective-dated tree structures for cost centres, profit centres, customers, and products, used for rollup reporting.
HS code (Harmonized System) — The international product classification determining customs duty.
Hypercare — The intensive support period immediately after go-live.
I
IDoc — SAP’s asynchronous document format for integration, with status tracking and reprocessing.
Idempotency — The property that repeating an operation produces the same result as performing it once. Essential for all integration.
IFRS / GAAP — International Financial Reporting Standards / Generally Accepted Accounting Principles. The rulebooks financial statements follow.
Impairment — Writing an asset down when its recoverable amount falls below book value.
Incoterms — Standard terms defining who bears cost and risk in shipment, and when title passes. Affects when inventory appears on your balance sheet.
Info record (purchasing) — The vendor-material relationship: price, lead time, minimum order, their part number.
Intercompany — Transactions between entities of the same group, requiring elimination at consolidation.
Internal order — A temporary cost collector for a discrete activity, which settles to a final receiver.
Intrastat — EU statistical declaration of intra-community goods movements.
ISA-95 — The standard model for the ERP↔MES↔control-system boundary, with levels 0–4.
ISO 20022 — The modern financial messaging standard: pain.001 (payment initiation), camt.053 (statement).
Item category — Configuration determining whether a document line is priced, delivered, billed, and planning-relevant.
J
Journal entry — A balanced set of debit and credit lines posted to the GL.
JIT (Just in Time) — Producing or delivering exactly when needed, minimising inventory.
K
Kanban — Pull-based replenishment signalled by container consumption, without formal orders.
Key user (super user) — A business employee who knows the real process, tests, and trains peers. The most valuable person on a project.
L
Landed cost — The total cost of imported goods including freight, duty, insurance, and handling — typically 15–25% above the invoice.
Lead time — Time from order to availability. Composed of queue, setup, run, wait, and move time. Queue usually dominates.
Ledger — A complete set of books under one accounting standard. Parallel ledgers support multi-GAAP reporting.
Letter of credit (LC) — A bank undertaking to pay on presentation of compliant documents. Central to export trade.
LIFO (Last In, First Out) — Consuming the newest cost first. Permitted under US GAAP, prohibited under IFRS.
Logical unit of work — A business transaction spanning several screens, committed atomically at save.
Lot sizing — The rule converting a net requirement into an order quantity: lot-for-lot, fixed, min/max, EOQ, period.
Low-level code — The deepest BOM level a material appears at. Determines MRP processing order.
M
Master data — Slowly-changing reference entities (customer, material, GL account) that transactions point at.
Material document — The record of a stock movement, separate from the accounting document.
Material ledger — SAP’s actual costing engine, valuing inventory at real cost with periodic settlement.
MDM (Master Data Management) — Governance of master data: ownership, quality, deduplication, workflow.
MES (Manufacturing Execution System) — Shop-floor execution at machine and second granularity, between ERP and the machines.
Milestone billing — Invoicing at defined project points rather than on delivery.
Modification — Changing vendor source code. Creates permanent upgrade debt.
Moving average price (MAP) — Inventory valuation recalculated on every receipt. Dangerous at low stock quantities.
Movement type — The code determining a stock movement’s direction, stock type, GL accounts, and required fields.
MRP (Material Requirements Planning) — Calculating what to buy and make, and when, from demand, BOMs, inventory, and lead times.
MRP II — MRP extended with capacity planning, shop floor control, and financial integration.
MTO / MTS / ATO — Make to Order / Make to Stock / Assemble to Order planning strategies.
N
Netting — (1) In MRP, subtracting available stock and receipts from gross requirements. (2) In treasury, offsetting intercompany payables and receivables.
Non-conformance (NC) — A quality deviation requiring investigation and disposition.
NRV (Net Realisable Value) — Estimated selling price less costs to complete and sell. Inventory is carried at the lower of cost and NRV.
Number range — The controlled definition of document numbering, with gapless requirements for legal documents.
O
OEE (Overall Equipment Effectiveness) — Availability × Performance × Quality. The universal manufacturing metric.
OData — A REST-based query protocol used heavily by SAP and Dynamics.
One-time account — A shared master record for walk-in customers, with details stored on the document instead.
Open item — An unmatched posting on an open-item-managed account, awaiting clearing.
Order to cash (O2C) — The end-to-end revenue process: order → delivery → invoice → payment.
OTIF (On Time In Full) — Deliveries meeting both the date and the quantity. The headline service metric.
Outbox pattern — Writing an event to the database in the same transaction as the business data, then relaying it. Guarantees no lost or phantom events.
Overlayering — Modifying vendor code in Dynamics. Removed in D365 in favour of extensions.
P
Parallel ledger — Multiple simultaneous sets of books under different accounting standards.
Parallel run — Running old and new systems simultaneously and reconciling. Non-negotiable for payroll.
Parked document — A saved but unposted document with no ledger effect. Supports the preparer/poster split.
Partner function — The role a party plays on a document: sold-to, ship-to, bill-to, payer, carrier.
Payer — The party who actually pays, and whose credit limit is checked.
Pegging — Tracing a requirement back to the demand that created it.
Percentage of completion (POC) — Recognising revenue on long contracts in proportion to work performed.
Period control — Which fiscal periods are open for posting, by account type and user group.
Phantom assembly — A BOM level that is never stocked or produced; MRP explodes straight through it.
Plant — A site where you make, store, or ship. Owns inventory and MRP parameters.
PPAP (Production Part Approval Process) — Automotive customer approval of a part and its process before shipping.
Price control (S/V) — Standard price (S) with variances, or moving average (V) absorbing differences.
Pricing procedure — The ordered calculation sheet determining how conditions combine into a final price.
Procure to pay (P2P) — The end-to-end purchasing process: requisition → PO → receipt → invoice → payment.
Production order — Simultaneously a work instruction, a material reservation, a capacity booking, and a cost object.
Production version — The link between a specific BOM alternative and routing, valid for a lot-size and date range.
Profit centre — An organisational unit with responsibility for margin, producing a partial P&L.
Pro-forma invoice — A printed invoice for customs or LC purposes that creates no accounting document.
Provision — A liability of uncertain timing or amount: bad debt, warranty, restructuring.
Purchase requisition (PR) — An internal request to buy, subject to approval and creating a budget commitment.
Q
QWeb — Odoo’s XML templating engine for reports and views.
Quant — The atomic stock unit in warehouse management: material + batch + stock type in one specific bin.
Quota arrangement — Splitting purchase volume across vendors by percentage.
R
RAP (ABAP RESTful Application Programming) — SAP’s current framework for building transactional apps and OData services.
Rebate — A retrospective volume discount, accrued during the period and settled later.
Reason code — A structured explanation attached to an adjustment, rejection, return, or override. Makes analysis possible.
Recertification — Periodic manager confirmation that their team’s system access is still appropriate.
Reconciliation account — A GL account whose balance is maintained automatically from a subledger. Cannot be posted to directly.
Record rule — Odoo’s row-level security mechanism, expressed as a domain filter.
Release — Approving a document or order for the next stage. Also the act of removing a block.
Reorder point — The stock level at which replenishment is triggered.
Residual item — A new open item created for the unpaid remainder when a payment is short.
Reversal — A mirror-image document that cancels a posting’s effect while leaving both visible. The correction mechanism in ERP.
RICEFW — Reports, Interfaces, Conversions, Enhancements, Forms, Workflows. The standard ERP custom-development taxonomy and estimating unit.
RMA (Return Material Authorisation) — The authorisation required before a customer return is accepted.
Routing — The sequence of operations, work centres, and times required to make a product.
Row-level security (RLS) — Restricting which rows a user can see, typically by organisational assignment.
S
SAF-T — Standard Audit File for Tax: a prescribed XML dump of the full ledger, required in several countries.
Sales area — The combination of sales organisation, distribution channel, and division that drives pricing and customer master extension.
Schedule line — A confirmed quantity and date on an order item. One item can have several.
Segregation of duties (SoD) — Preventing one person from completing a transaction end to end. The foundation of internal control.
Serial number — A unique identifier for one individual unit, enabling warranty and service history.
Settlement — Transferring accumulated costs from a temporary cost object to its final receiver.
Ship-to — The partner receiving the goods, which may differ from the sold-to.
Shop floor control — Tracking and managing work as it moves through operations.
Slow-moving and obsolete (SLOB) — Inventory with no recent movement, requiring provision or write-off.
Sold-to — The partner who placed the order; the commercial relationship.
SoD conflict — A user holding two authorisations whose combination enables fraud.
SSCC (Serial Shipping Container Code) — The GS1 identifier for a logistics unit, printed on the pallet label.
Standard cost — A planned unit cost, with actual differences recorded as analysable variances.
Standalone selling price (SSP) — What you’d charge for a good or service separately. Used to allocate a bundle’s transaction price under IFRS 15.
Statistical posting — An informational posting that cannot be settled further, allowing multiple cost objects on one line.
STO (Stock Transport Order) — Moving stock between your own plants, one-step or two-step with stock in transit.
Subcontracting — Sending components to a vendor who returns a finished part. Your components remain your inventory while at the vendor.
Subledger — Detailed records (AR, AP, assets, inventory) summarised into a GL reconciliation account.
Substitution — A configured rule that silently fills or replaces a field value at posting.
T
TECO (Technically Complete) — An order status where production stops and reservations are freed, but late costs can still post. Distinct from Closed.
Three-way match — Verifying that the purchase order, goods receipt, and invoice agree on quantity and price within tolerance.
Time-phasing — Distributing requirements across future periods and offsetting them by lead time.
Tolerance group — Configuration defining acceptable variance limits per user or transaction type.
Trading partner — The counterparty entity on an intercompany posting. Mandatory for elimination.
Transfer price — The price charged between group entities. Must be arm’s length for tax purposes.
Transport request — SAP’s packaged unit of change moved between environments.
Trial balance — All accounts with opening balance, movements, and closing balance. Total must be zero.
U
UAT (User Acceptance Testing) — Business users testing real scenarios. Sign-off is the gate to go-live.
Universal Journal — See ACDOCA.
Unrealised FX — Foreign exchange gain or loss on open items, recognised at period end and usually reversed the next period.
UoM (Unit of Measure) — How quantity is expressed. Base, order, sales, and issue UoMs may all differ, with material-specific conversions.
Usage decision — The formal quality outcome releasing or rejecting an inspection lot, triggering a stock movement.
V
Valuation class — The material master field determining which GL accounts inventory postings hit.
Valuation type — Split valuation category (domestic vs imported, grade A vs B) with its own price and stock.
Variance — The difference between standard and actual cost, categorised by cause: price, quantity, efficiency, volume.
VAT (Value Added Tax) — A consumption tax charged at each stage with input credit. Never revenue or expense for a registered business.
Vendor evaluation — Scoring suppliers on price, quality, delivery, and service from transaction history.
W
Wage type — The atomic pay element in payroll, with flags controlling taxability and cumulation membership.
WBS (Work Breakdown Structure) — The hierarchical decomposition of a project into elements that hold budget and collect cost.
Where-used — Finding every BOM that contains a given component. Essential before an engineering change.
WIP (Work in Process) — The value of started but unfinished production, calculated at period end and reversed on completion.
WMS (Warehouse Management System) — Bin-level warehouse execution: directed put-away, picking strategies, handling units, RF devices.
Withholding tax — Tax the payer deducts and remits on the payee’s behalf. TDS in India and Bangladesh.
Work centre — Where an operation is performed, with capacity, rates, and a linked cost centre.
Workflow — Configured routing of documents for approval, with thresholds, escalation, and an audit trail.
X, Y, Z
X12 — The ANSI EDI standard used in North America.
X++ — The programming language of Dynamics 365 Finance & Operations.
XPath inheritance — Odoo’s mechanism for modifying views without editing the original XML.
Yield — Usable output as a proportion of input. Yield variance measures the shortfall.
Zero-based budgeting — Justifying every line from zero each cycle rather than incrementing last year.
Zone picking — Warehouse picking where each picker owns a zone and orders pass between them.