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Inventory and accounting glossary

An inventory management glossary of 130 terms across stock, planning, warehousing, purchasing, production, selling, accounting, tax and e-commerce, each defined in a few plain sentences with the standard formula where there is one. Where we have written a longer guide, or where Cash Flow Inventory has the feature, the entry says so and links to it.

Stock and inventory

What you hold, how it is identified and how the records are kept true to the shelf.

Inventory
Goods a business holds to sell or to use in making what it sells: raw materials, work in progress, finished goods and goods for resale. Inventory is a current asset on the balance sheet until it is sold.
In depth: Inventory management — definition and best practices
SKU (stock keeping unit)
A code a business gives to each distinct item it stocks, so that every size, colour or pack of a product is counted separately. Unlike a barcode number such as a UPC or EAN, a SKU is internal and chosen by the business.
In Cash Flow Inventory: Products can have variants such as size and colour, each with its own stock and prices.
In depth: SKU or stock keeping unit: meaning and best practices · Products and inventory guide
Perpetual inventory system
A method in which stock records are updated with every receipt, sale and adjustment, so the system always shows the current quantity and value. It is the opposite of a periodic system.
In Cash Flow Inventory: Every stock change is a movement in one log per location, so stock is kept perpetually.
In depth: Periodic vs perpetual inventory system · Inventory transaction log
Periodic inventory system
A method in which stock is counted at set intervals, such as month-end, and cost of goods sold is worked out from the count rather than recorded with each sale. It is simpler but shows nothing reliable between counts.
Stock on hand
The quantity of an item physically held at a location right now, before deducting what is already promised to customers.
In depth: Inventory level management
Available stock (available to promise)
Stock on hand less what is already reserved for open orders, sometimes plus what is due in. It is the quantity you can safely promise to a new customer.
In Cash Flow Inventory: Replenishment works from a forecast of on hand, less what is promised, plus what is on its way.
Stockout
The situation where an item has no stock available when a customer wants it, causing lost sales, backorders or substitutions.
In Cash Flow Inventory: A Stockouts list shows products out of stock or below their reorder level.
In depth: Stockouts: causes, impacts and how to avoid them
Overstock (excess inventory)
Stock held beyond what demand over a reasonable period needs. It ties up cash, adds carrying cost and raises the risk of obsolescence.
In depth: Excess inventory: eliminate excess stock
Deadstock
Items that have not sold or been used for a long period and are unlikely to sell at their normal price. They still carry storage and capital cost.
In Cash Flow Inventory: Inventory intelligence lists dead stock over the period you choose, per location.
In depth: Deadstock: meaning, causes and prevention
Obsolete inventory
Stock that can no longer be sold or used for its purpose, for example because it has expired, been superseded or gone out of fashion. It is usually written down or written off.
In depth: Obsolete inventory: everything you need to know
Inventory shrinkage
The difference between the stock recorded and the stock actually present, caused by theft, damage, spoilage or recording errors. Shrinkage rate = (recorded − counted) ÷ recorded.
In depth: Inventory shrinkage: understanding and preventing loss
Negative inventory
A stock record below zero, which happens when a system lets you sell or issue more than it shows on hand. It always means the records are wrong somewhere.
In Cash Flow Inventory: Stock never goes below zero unless the business allows it in Settings.
In depth: Negative inventory: causes, effects and prevention · Stock never below zero
Cycle counting
Counting a small part of the stock on a rolling schedule, rather than everything at once, so that every item is checked several times a year without closing the business. High-value or fast-moving items are usually counted more often.
In Cash Flow Inventory: A stock count can be a full count of a location, a cycle count of some categories or a spot check of chosen items, with stock frozen while counting if you wish.
In depth: Cycle counting methods and best practices · Stock counts and reconciliation
Physical inventory (stock take)
A full count of every item at a location, compared with the records. It is often done at the financial year-end to confirm the stock value in the accounts.
In depth: Stock taking: beyond just counting inventory
Stock adjustment
An entry that corrects the recorded quantity of an item to what is really there, for example after a count, damage or loss. A good adjustment records a reason and who made it.
In Cash Flow Inventory: Every adjustment carries a reason, can route to an approver and sits in the audit trail.
In depth: Inventory adjustment: keeping stock and records in sync · Stock adjustments guide
Inventory reconciliation
Comparing counted stock with recorded stock, and the stock value in the inventory records with the inventory account in the general ledger, then explaining and correcting the differences.
In Cash Flow Inventory: Stock at a date is valued by your method and reconciled to the Inventory account.
In depth: Inventory and stock reconciliation
Lot tracking (batch tracking)
Recording which production or supplier batch each unit belongs to, usually with its expiry date, so you can trace where a batch came from and where it went.
In Cash Flow Inventory: Lots with expiry dates are recorded when goods arrive, once lot tracking is switched on in Settings.
In depth: Lot tracking · Batch, lot and quality control
Serial number tracking
Giving each individual unit its own unique number and recording it at every movement, so a single item can be traced for warranty, service or theft.
In Cash Flow Inventory: Serial numbers are supported alongside lots and bins.
In depth: Serial number tracking for small businesses
Unit of measure (UoM)
The unit in which an item is counted, bought or sold — each, box, kilogram, metre. Many items are bought in one unit and sold in another, so a conversion factor links them.
In Cash Flow Inventory: Units with conversions are part of every product’s set-up.
In depth: Multiple units of measure in inventory management
Consignment inventory
Goods held by a retailer or distributor that still belong to the supplier until they are sold. The holder pays only for what sells and returns or keeps the rest.
In depth: Consignment inventory management
Phantom inventory
Stock the system says is present but that cannot be found, so it is never reordered and the shelf stays empty. Regular counts are the usual cure.
In depth: What is phantom inventory and how to avoid it
Inventory ageing
Grouping stock by how long it has been held, for example 0–30, 31–90 and over 90 days, to spot slow-moving and at-risk items early.
In depth: Inventory ageing: strategies for your stock levels

Planning and replenishment

When to reorder, how much, and how much buffer to keep.

Reorder point (ROP)
The stock level at which a new order should be placed so it arrives before stock runs out. Reorder point = lead-time demand + safety stock, where lead-time demand = average daily demand × lead time in days.
In Cash Flow Inventory: Each item’s reorder point is worked out from its demand, lead time and service level, and refreshed every night.
In depth: Reorder point: definition, formula and implementation · Reorder point calculator
Safety stock
Extra stock held to cover demand that is higher than forecast or deliveries that are late. A common formula is Z × σ(d) × √L: the service-level factor times the standard deviation of daily demand times the square root of the lead time in days.
In Cash Flow Inventory: Safety stock is calculated per item from demand, lead time and the service level you choose.
In depth: Safety stock: definition, formulas and implementation · Safety stock calculator
Economic order quantity (EOQ)
The order size that minimises the total of ordering and holding costs. EOQ = √(2DS ÷ H), where D is annual demand in units, S the cost of placing one order and H the cost of holding one unit for a year.
In depth: Understanding the economic order quantity model · EOQ calculator
Lead time
The time between deciding to order and having the goods ready to use or sell: supplier processing, transit and receiving. Longer or less reliable lead times need more safety stock.
In Cash Flow Inventory: A supplier item can record both its usual and its longest lead time in days.
In depth: Lead times: meaning and impact on your business
Demand forecasting
Estimating future sales of each item from past demand, seasonality, trends and known events, as the basis for purchasing and production plans.
In Cash Flow Inventory: The restock plan works from demand over a history window you set, from 30 to 365 days, and supplier lead times.
In depth: Demand forecasting: importance, methods and best practices · Planning suite
Service level
The probability of not running out of stock during a replenishment cycle, such as 95%. A higher service level needs more safety stock, and the cost rises steeply as it approaches 100%.
In Cash Flow Inventory: A Service level achieved report compares days out of stock in the last 90 days with the level each item aims for.
In depth: Meeting the desired service level
Min–max stock levels
A simple replenishment rule: when stock falls to the minimum, order enough to bring it back up to the maximum (the order-up-to level).
In Cash Flow Inventory: Items below their minimum are ordered up to the maximum in one click, as purchase orders, transfers or work orders.
In depth: Mastering min and max stock levels
Replenishment
Restocking items to the levels a plan calls for, by buying, transferring from another location or producing. It can be triggered by a reorder point, a schedule or a forecast.
In Cash Flow Inventory: The restocking policy can be Standard, Reorder point or Backordering.
In depth: Inventory replenishment: the complete guide
Backorder
An order accepted for an item that is not in stock, to be shipped when new stock arrives. Backorders keep the sale but delay the customer.
In depth: Backordering: definition, process and tips
ABC analysis
Ranking items by their share of annual consumption value so control effort goes where the money is. A items are typically about 80% of value from a small share of items, B the next 15% and C the remaining 5%.
In Cash Flow Inventory: ABC analysis groups products into A (top 80% of consumption), B (next 15%) and C, per location and period.
In depth: What is ABC analysis? Inventory classification
XYZ analysis
Classifying items by how variable their demand is: X steady, Y fluctuating, Z irregular. Combined with ABC it shows which items can be forecast closely and which need more buffer.
In depth: XYZ analysis in inventory management
Just in time (JIT)
Receiving materials and goods only as they are needed, to keep stock and carrying cost low. It depends on reliable suppliers and short, predictable lead times.
In depth: Just-in-time inventory management
Material requirements planning (MRP)
Working out what materials are needed, how many and when, by exploding planned production through each bill of materials and netting off stock on hand and on order.
In depth: Material requirements planning (MRP) · Production demand planning
Two-bin system
A visual reorder method: stock is kept in two bins, and when the first is empty a reorder is placed while the second bin covers the lead time.
In depth: Two-bin inventory control
Minimum order quantity (MOQ)
The smallest quantity a supplier will accept on one order. It can force you to buy more than your reorder calculation suggests.
In depth: Minimum order quantity: a guide for small businesses
Sales and operations planning (S&OP)
A regular, usually monthly, process in which sales, operations and finance agree one plan for demand, supply and stock for the coming months.
In depth: Sales and operations planning (S&OP)

Warehouse and fulfilment

Where stock sits, how it moves between places and how orders leave the building.

Bin location
A named, addressable storage place inside a warehouse — aisle, rack, shelf, bin — so that each item can be put away and found again without searching.
In Cash Flow Inventory: Bins have paths, barcodes and capacity, and you can scan to put away, find an item or count by bin.
In depth: Warehouse setup: efficiency and productivity · Labels, barcodes and scanning
Put-away
Moving received goods from the receiving area to their storage location and recording where they went.
In depth: Inventory put-away
Pick and pack
Collecting the items for an order from their storage locations (picking) and packing them for shipment, usually from a pick list.
In Cash Flow Inventory: Pick and pack are optional steps in the sales process you choose.
In depth: Pick and pack process · Delivery and fulfilment guide
Order fulfilment
Everything between accepting an order and the customer receiving it: picking, packing, shipping, delivery confirmation and, where needed, returns.
In depth: Order fulfilment: steps and challenges
FEFO (first expired, first out)
A picking rule that issues the units expiring soonest first, whatever order they arrived in. It is standard for food, medicines and other dated goods.
In Cash Flow Inventory: Sales draw the lot that expires soonest first, and an expiry watch lists what expires in the next days you choose, with its value.
In depth: Inventory management for perishable goods
Product recall
Withdrawing a product, usually a specific batch, from customers and the supply chain because it is unsafe or defective. Lot tracking makes it possible to recall only the affected batch.
In Cash Flow Inventory: A lot recall lists every customer who received a lot, and where the lot came from.
In depth: Inventory management for pharmacies · Batch, lot and quality control
Multi-location inventory
Keeping separate stock figures for each warehouse, shop or van, so you know not only how much you have but where it is.
In Cash Flow Inventory: Stock is held per location, and replenishment can suggest transfers between them as well as purchases.
In depth: Managing inventory across multiple locations · Multi-location transfers
Transfer order
A document that moves stock from one of your locations to another. The source location issues the goods and the destination receives them; in between they are in transit.
In Cash Flow Inventory: A transfer order goes pending → approved → closed; after approval the source sends the stock and the destination receives it, with what is on its way shown as in transit.
Warehouse and multi-location software
In-transit inventory
Stock that has left one place and not yet arrived at the next — between supplier and warehouse, or between two of your own locations. It is still yours (depending on the delivery terms) and must be counted.
In depth: Transit inventory: a comprehensive guide
Cross-docking
Moving incoming goods straight from the receiving dock to outbound shipments with little or no storage in between.
In depth: Understanding cross-docking
Third-party logistics (3PL)
An outside company that stores, picks, packs and ships goods on your behalf, often for several clients from the same warehouse.
In depth: Third-party logistics for SMEs
Warehouse management system (WMS)
Software that directs and records work inside a warehouse: receiving, put-away, bin locations, picking, packing and counting.
In depth: Warehouse management systems: the ultimate guide · Warehouse management software
Returns management (RMA)
Handling goods customers send back: authorising the return, receiving and inspecting it, restocking or scrapping it, and refunding or crediting the customer.
In Cash Flow Inventory: Returns lead to credit notes and refunds.
In depth: Returns management · Sales returns and credit notes

Purchasing

From the first request to the supplier’s bill.

Purchase requisition
An internal request asking the purchasing team to buy something. Once approved it becomes the basis for a request for quotation or a purchase order.
In Cash Flow Inventory: Purchase requisitions can be switched on, and approved automatically or by hand.
In depth: Purchase requisitions: best practices · Requisitions, RFQs and quotes
Request for quotation (RFQ)
An invitation to one or more suppliers to quote a price and terms for stated items and quantities, so offers can be compared before ordering.
In Cash Flow Inventory: Suppliers can answer through a quote link that lasts from 24 hours to 7 days.
In depth: Comparative evaluation before purchasing
Purchase order (PO)
A buyer’s formal order to a supplier stating items, quantities, prices and delivery terms. Once the supplier accepts it, it is a commitment on both sides.
In Cash Flow Inventory: Purchase orders can route to an approver and are received against as goods arrive.
In depth: Purchasing management strategies · Purchase order software
Goods received note (GRN)
The record that goods have arrived, listing what was received against the purchase order, including shortages and damage. It is the evidence used to approve the supplier’s bill.
In Cash Flow Inventory: Goods received is a step of its own in the buying flow, and stock moves when it is recorded.
In depth: Inventory receiving · Receiving guide
Three-way match
Checking that the purchase order, the goods received note and the supplier’s invoice agree on items, quantities and prices before the invoice is paid.
In Cash Flow Inventory: Bills are made from what was received against the order, so nothing is paid that was not ordered and received.
Bills and accounts payable
Landed cost
The full cost of getting goods to your premises: purchase price plus freight, insurance, duties, customs fees and handling. It is the right basis for valuing stock and setting prices.
In Cash Flow Inventory: The buying flow includes landed costs, and supplier items can carry a unit landed cost.
In depth: Landed cost
Procurement
The whole process of acquiring goods and services: identifying the need, choosing suppliers, negotiating, ordering, receiving and paying.
In depth: Procurement process: a step-by-step guide
Supplier (vendor) management
Choosing suppliers, agreeing terms and tracking their price, quality and delivery performance over time.
In depth: Effective vendor management · Supplier management guide
Vendor-managed inventory (VMI)
An arrangement in which the supplier monitors your stock and decides when and how much to replenish, within agreed limits.
In depth: Vendor managed inventory
Purchase return and supplier credit
Sending goods back to a supplier, for example because they are damaged or wrong, and receiving a credit note (sometimes called a debit note from the buyer’s side) that reduces what you owe.
Purchase returns and supplier credits

Production

Turning materials into finished goods and knowing what each one cost.

Bill of materials (BOM)
The list of materials, components and quantities needed to make one unit of a product, often with the operations and their costs. It is the recipe production and costing work from.
In Cash Flow Inventory: Bills of materials carry operation names and costs, and a report lists every bill of materials.
In depth: Bill of materials (BOM) · Bills of materials and recipes
Work order (production order)
An instruction to make a stated quantity of a product by a date. It reserves and issues the materials, records the work done and receives the finished goods.
In Cash Flow Inventory: A work order can run in one step or be routed step by step, and can record a batch number and expiry for the output.
In depth: Production planning · Production work orders
Backflush
Deducting the materials used in production automatically when the finished goods are reported, based on the bill of materials, instead of issuing each material by hand beforehand.
In Cash Flow Inventory: A work order can take the materials out when the finished goods are received.
Manufacturing software
Raw materials
Materials and components bought to be used in production that have not yet been worked on.
In depth: Four types of inventory in manufacturing · Material and ingredient issues
Work in progress (WIP)
Goods that have started production but are not yet finished, valued at the materials, labour and overhead put into them so far.
In depth: Manufacturing inventory management
Finished goods
Products that have completed production and are ready to sell.
Finished goods receipts
Manufacturing overhead
Production costs that cannot be traced to a single product, such as factory rent, power and supervision. They are spread over products using an allocation rate.
In depth: Manufacturing overhead
Kitting
Assembling separate items into a ready-to-sell or ready-to-use kit under a new SKU, before the order arrives.
In depth: Kitting: everything you need to know
Make to order
Producing only once a customer order is received, rather than building stock in advance (make to stock). It lowers finished-goods stock but lengthens delivery times.
In Cash Flow Inventory: Dropship and make to order is a feature you switch on in business set-up.
Production scheduling
Deciding which work order runs on which machine or work centre and when, given capacity, material availability and due dates.
Production scheduling and shop floor
Lean manufacturing
A way of running production that removes waste — overproduction, waiting, excess stock, defects and needless movement — so that work flows to the customer’s pull.
In depth: Lean manufacturing: a comprehensive guide

Sales and selling

Orders, prices, credit and the till.

Quotation
A priced offer to a customer for stated goods or services, valid for a period. Once accepted it is converted into a sales order or a job.
Leads, quotations and conversions
Sales order
The seller’s record of a confirmed customer order. It reserves stock and drives picking, delivery and invoicing.
In Cash Flow Inventory: A sales order is saved, approved, picked and packed, delivered, invoiced and paid, with the steps set by the sales process you choose.
In depth: Order management · Sales orders guide
Delivery note
The document that travels with goods to the customer, listing what was delivered. The customer’s signature on it is proof of delivery.
Delivery and fulfilment
Credit note
A document that reduces what a customer owes, issued for returns, price corrections or cancelled items. It references the original invoice rather than editing it.
Sales returns and credit notes
Credit limit
The most a customer may owe you at one time on credit terms. Orders that would take the balance past the limit are held or refused.
In Cash Flow Inventory: Credit control can be off, warn (the order saves with a notice) or block (the order is refused), and a customer on credit hold is refused at approval.
Sales payments and receivables
Cash on delivery (COD)
A payment method in which the customer pays the courier on delivery, and the courier later passes the money to the seller, less its charges.
In Cash Flow Inventory: Cash on delivery runs with courier settlement.
COD settlement guide
Point of sale (POS)
Where a retail sale is completed and paid for, and the till software or hardware used to do it — scanning items, taking payment and printing the receipt.
In Cash Flow Inventory: The till has shifts opened with a float and closed against the cash counted, part payments, returns from an earlier receipt, promotions, loyalty and gift cards.
POS software
Markup
Profit expressed as a percentage of cost. Markup = (selling price − cost) ÷ cost. A 50% markup on a cost of 10 gives a price of 15.
In depth: Profit margin vs markup
Gross margin
Gross profit as a percentage of the selling price. Gross margin = (revenue − cost of goods sold) ÷ revenue. A price of 15 on a cost of 10 is a 33.3% margin but a 50% markup.
In Cash Flow Inventory: A Gross profit report sets each sales order’s sales against its cost of goods.
In depth: Achieving a good profit margin · Gross margin calculator
Sell-through rate
The share of stock received that was sold in a period. Sell-through = units sold ÷ units received × 100.
In depth: Sell-through rate
Price list (price tiers)
A set of prices for a group of customers or a channel, such as retail, wholesale or a key account, so the same item can sell at different agreed prices.
In Cash Flow Inventory: Wholesale prices and price lists are features you switch on.
In depth: Pricing strategies for small businesses
Product bundling
Selling several products together as one offer, usually at a lower combined price, to raise order value or move slower items.
In depth: Smart product bundling strategies
Markdown
A permanent reduction of a selling price, typically to clear seasonal, slow-moving or ageing stock.
In depth: Retail markdown strategies

Accounting and finance

How stock and trading reach the books, and the ratios read from them.

Double-entry bookkeeping
The system in which every transaction is recorded as equal debits and credits in at least two accounts, so total debits always equal total credits and the books can be checked.
In Cash Flow Inventory: Every document posts its own journal automatically, on one live ledger.
In depth: Accounting basics · Inventory accounting software
General ledger
The complete record of every account and every posting to it, from which the trial balance and financial statements are produced.
In depth: Accounting 101: key terminology · Chart of accounts and general ledger
Chart of accounts
The structured list of all accounts a business uses — assets, liabilities, equity, income and expenses — each with a code and name.
In Cash Flow Inventory: The chart of accounts underlies the automatic journals posted from every document.
In depth: Demystifying the chart of accounts · Chart of accounts guide
Journal entry
A dated record of one transaction’s debits and credits, with a description, before it is posted to the ledger accounts.
In depth: Inventory journal entries
Cost of goods sold (COGS)
The cost of the stock sold in a period. Under a periodic system COGS = opening inventory + purchases − closing inventory; under a perpetual system it is recorded with each sale.
In Cash Flow Inventory: Cost of goods is posted as each sale happens, by your valuation method.
In depth: Cost of goods sold (COGS)
FIFO (first in, first out)
A valuation method that assumes the oldest stock is sold first, so cost of goods sold uses the earliest costs and closing stock the most recent ones.
In Cash Flow Inventory: FIFO or weighted average is chosen per business.
In depth: Inventory valuation methods
LIFO (last in, first out)
A valuation method that assumes the newest stock is sold first. It is not permitted under IFRS, though US GAAP allows it.
Weighted average cost
A valuation method that gives every unit the average cost of the stock held: total cost of units available ÷ total units available, recalculated as new stock arrives.
In Cash Flow Inventory: Weighted average or FIFO is chosen per business, and stock at a date is valued by it.
In depth: Inventory accounting: practical strategies
Inventory turnover
How many times stock is sold and replaced in a period. Inventory turnover = cost of goods sold ÷ average inventory at cost.
In Cash Flow Inventory: An Inventory turnover report shows how fast each item’s stock is used, with days on hand, slowest first.
In depth: Inventory turnover mastery · Inventory turnover calculator
Days of inventory (DIO)
How many days, on average, stock is held before it is sold. Days inventory outstanding = average inventory ÷ cost of goods sold × 365, or 365 ÷ inventory turnover.
In depth: Days inventory outstanding
Average inventory
The typical stock held over a period, most simply (opening inventory + closing inventory) ÷ 2. It is the denominator of turnover ratios.
In depth: Average inventory formula
Carrying cost (holding cost)
The yearly cost of holding stock: capital tied up, storage, insurance, shrinkage and obsolescence, usually expressed as a percentage of stock value — commonly 15–30% a year (an indicative industry range, Cleverence, 2024).
In depth: Understanding inventory carrying cost
Accounts receivable
Money customers owe for goods or services delivered on credit, shown as a current asset until it is collected.
In Cash Flow Inventory: Payment reminders, a receivables work queue and write-off or provision for uncollectable dues are built in.
In depth: Automating accounts receivable · Sales payments and receivables
Accounts payable
Money the business owes suppliers for goods or services received on credit, shown as a current liability until it is paid.
In Cash Flow Inventory: Bills can be held, approved and paid in bulk.
Bills and accounts payable
Bank reconciliation
Matching the transactions in the books with the bank statement and explaining any differences, such as uncleared cheques or bank charges, so the cash balance can be trusted.
In Cash Flow Inventory: Banks and reconciliation are part of the accounting.
Cash and bank management
Balance sheet
A statement of what a business owns (assets), owes (liabilities) and the owners’ equity at one date. Assets = liabilities + equity.
In depth: What is a balance sheet · Financial statements guide
Income statement (profit and loss)
A statement of revenue, cost of sales, expenses and profit over a period.
In depth: Key components of an income statement
Cash flow statement
A statement of cash coming in and going out over a period, split into operating, investing and financing activities. Profit and cash differ largely because of stock, receivables and payables.
In depth: Cash flow statement: a comprehensive guide
Working capital
Current assets less current liabilities: the money available to run day-to-day trading. Stock is often the largest part of it.
In depth: Inventory to working capital ratio
Inventory write-off
Removing stock with no remaining value from the books and recording the loss as an expense. A write-down instead reduces the value of stock that still has some worth.
In depth: Inventory write-offs
Net realisable value
The estimated selling price of stock less the costs to complete and sell it. Under IAS 2, stock is carried at the lower of cost and net realisable value.
In depth: Inventory write-down
Period close (period lock)
Finalising the books for a month or year and locking the period so posted entries can no longer be changed; corrections are then made in an open period.
In Cash Flow Inventory: Period locks stop postings into a closed period.
Period close and lock
Audit trail
A chronological record of who created, changed or deleted each record, when, and what it was before and after.
In Cash Flow Inventory: There is an audit trail on every change.
Security

Tax and e-invoicing

Sales taxes and the structured invoices more and more countries require.

VAT (value added tax)
A consumption tax charged at each stage of the supply chain. A registered business charges output VAT on its sales, reclaims input VAT on its purchases and pays the difference to the tax authority.
In Cash Flow Inventory: Packs cover VAT in Bangladesh (NBR) and the United Kingdom (Making Tax Digital), among others.
Sales tax management
GST (goods and services tax)
A value-added tax used under that name in countries such as India, Australia, Canada, New Zealand and Singapore. In India it is split into central, state and integrated GST.
In Cash Flow Inventory: A pack covers the India GST e-invoice.
Tax packs and e-invoicing
E-invoicing
Issuing invoices as structured data in a standard format that the buyer’s and the tax authority’s systems can read automatically — not a PDF sent by e-mail. Many countries now require it for some or all business sales.
In Cash Flow Inventory: Localisation packs cover e-invoicing formats such as EU Peppol / EN 16931, ZATCA, CFDI 4.0, MyInvois, KSeF and XRechnung; the national profiles are not certified.
E-invoicing software
Peppol
An international network and set of specifications for exchanging e-invoices and other business documents through certified access points, used across Europe and in countries such as Singapore and Australia.
In Cash Flow Inventory: An approved invoice can be produced as Peppol BIS 3.0 UBL, checked against EN 16931; sending runs through an Access Point once one is connected.
Tax packs and e-invoicing
EN 16931
The European standard that defines the core content of an electronic invoice, so e-invoices can be read consistently across EU countries.
Making Tax Digital (MTD)
The UK programme requiring businesses to keep digital records and file VAT returns to HMRC through compatible software.
In Cash Flow Inventory: A United Kingdom pack covers VAT under Making Tax Digital.

E-commerce and channels

Selling the same stock in more than one place.

Omnichannel
Selling through several channels — shop, website, marketplaces, phone — that share one stock and customer record, so a customer can buy in one and collect or return in another.
In depth: Omnichannel inventory management · Retail and e-commerce inventory
Multichannel selling
Selling the same products through more than one channel. Unlike omnichannel, each channel may run separately, which makes keeping stock in step the main difficulty.
In depth: Multichannel inventory management
Dropshipping
A model in which the seller takes the order but the supplier ships the goods directly to the customer, so the seller never holds the stock.
In Cash Flow Inventory: Dropship and make to order is a feature you switch on in business set-up.
In depth: Dropshipping: a comprehensive guide
Online marketplace
A third-party website where many sellers list products, such as Amazon or eBay. The marketplace handles the shop front and payment and takes a fee.
In Cash Flow Inventory: Marketplace connections, including Amazon, eBay, Etsy and Walmart, are tested against each provider’s sandbox.
Marketplaces guide
Stock synchronisation
Keeping the stock shown on each sales channel in step with the stock system as orders, receipts and adjustments happen, to avoid overselling.
In Cash Flow Inventory: Stock syncs live with WooCommerce today; other stores are tested against each provider’s sandbox.
In depth: Real-time inventory tracking · Store sync health
WooCommerce
A widely used open-source e-commerce plug-in for WordPress websites.
In Cash Flow Inventory: WooCommerce is connected and proven live.
In depth: How to manage inventory in WooCommerce · WooCommerce guide
Order management system (OMS)
Software that collects orders from every channel in one place and tracks each through allocation, fulfilment, invoicing and returns.
In depth: Order management system: benefits and features · Order management software
E-commerce fulfilment
Picking, packing and shipping online orders to individual consumers, usually many small parcels with tracking and a returns route.
In depth: E-commerce order fulfilment · Couriers and shipping

Technology

The systems and standards behind the terms above.

Inventory management system
Software that records stock quantities, locations and values, and supports receiving, selling, counting and reordering.
In depth: Inventory management system: benefits and challenges · Inventory management software
ERP (enterprise resource planning)
Integrated software that runs several business functions — finance, inventory, purchasing, sales, production — on one database.
In depth: ERPs and inventory management · Choosing inventory software
Cloud software (SaaS)
Software run by the provider and used through a web browser on a subscription, with nothing to install or maintain on your own servers.
In Cash Flow Inventory: It is a cloud product in which each business works in its own isolated database.
In depth: Cloud-based inventory management
Barcode
A machine-readable code of bars or squares that identifies an item, location or document, so it can be scanned instead of typed. Common symbologies include EAN/UPC, Code 128 and QR.
In Cash Flow Inventory: Barcode and QR labels print on A4 or Letter sheets or label-printer rolls, as PDF or ZPL.
In depth: How to implement a barcode inventory system · Labels, barcodes and scanning
GS1-128
A barcode standard that encodes product data such as GTIN, lot number and expiry date in one label, using application identifiers. It is widely used on cartons and pallets.
In Cash Flow Inventory: Scanning with a camera or a scanner gun understands GS1-128.
RFID (radio-frequency identification)
Tags read by radio rather than line of sight, so many items can be counted at once without scanning each one.
In depth: Radio-frequency identification (RFID)
AI agent
Software built on a large language model that can plan and carry out multi-step tasks using tools, rather than only answering questions.
In Cash Flow Inventory: The assistant can work the real screens step by step while you watch, and every change is yours to approve.
In depth: AI agents in inventory management · AI inventory assistant
Model Context Protocol (MCP)
An open protocol that lets AI applications connect to outside systems through a standard interface, reading data and taking actions as defined tools and resources.
In Cash Flow Inventory: Any AI app can connect over MCP to 424 resources, working with the person’s own rights.
Connect your AI over MCP

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