Glossary

Financial terminology

Clear definitions for invoicing, accounting, taxation, and freelance business concepts.

A C D E F G H I M N P R S T

A

Accounts Receivable (AR)

Money owed to your business by clients for services or products already delivered.

Define

Accounts Payable (AP)

The total amount your business owes to vendors, suppliers, and service providers for goods or services received.

Define

C

Credit Note

A document issued to reduce the amount owed on a previously issued invoice, used for refunds, corrections, or discounts.

Define

D

Debit Note

A document issued to increase the amount owed on a previously issued invoice, used for undercharges or additional costs.

Define

E

Engagement Letter

A formal letter from a service provider to a client confirming the terms of an engagement before work begins.

Define

F

Fixed Price Contract

A project agreement where the total cost is agreed upfront and doesn't change regardless of time spent.

Define

G

GSTIN (GST Identification Number)

A unique 15-digit identification number assigned to every GST-registered business or individual in India.

Define

H

HSN Code (Harmonized System of Nomenclature)

A standardized numerical code used to classify goods for taxation and trade purposes under GST.

Define

I

IGST (Integrated Goods and Services Tax)

The GST charged on inter-state transactions and imports, collected by the central government and shared with the destination state.

Define

Invoice Discounting

A financing method where businesses borrow money against their unpaid invoices to improve short-term cash flow.

Define

M

Milestone Billing

A payment structure where invoices are issued at predefined project checkpoints rather than on completion.

Define

N

Net Terms (Net 15, Net 30, Net 60)

The number of days a client has to pay an invoice after it's issued.

Define

P

Proforma Invoice

A preliminary invoice sent before work begins, showing estimated costs and terms for client approval.

Define

Purchase Order (PO)

A formal document from a buyer authorizing a purchase, specifying items, quantities, prices, and delivery terms.

Define

R

Retainer Agreement

A recurring contract where a client pays a fixed monthly fee for ongoing access to professional services.

Define

Reverse Charge Mechanism (RCM)

A GST provision where the recipient of goods or services pays the tax instead of the supplier.

Define

T

Time and Materials (T&M)

A billing model where the client pays for actual hours worked plus any materials or expenses incurred.

Define

Financial terminology

A

Accounts Receivable (AR)

Accounts Payable (AP)

C

Credit Note

D

Debit Note

E

Engagement Letter

F

Fixed Price Contract

G

GSTIN (GST Identification Number)

H

HSN Code (Harmonized System of Nomenclature)

I

IGST (Integrated Goods and Services Tax)

Invoice Discounting

M

Milestone Billing

N

Net Terms (Net 15, Net 30, Net 60)

P

Proforma Invoice

Purchase Order (PO)

R

Retainer Agreement

Reverse Charge Mechanism (RCM)

S

Statement of Work (SOW)

Scope Creep

SAC Code (Services Accounting Code)

T

Time and Materials (T&M)