Glossary
Manufacturing, GST and accounting terms, explained
96 terms in plain English, with Hindi meanings on every term page — and a link to the free tool or guide that puts each one to work.
Running a factory means speaking four languages at once: the accountant's (journal entries, trial balance, depreciation), the tax department's (place of supply, GSTR-1, reverse charge), the purchase and stores team's (RFQ, GRN, lead time, safety stock) and the shop floor's (job card, NCR, kaizen, takt time). This glossary puts all of them in one place, each explained in a sentence or two you can act on.
Every term page starts with a short definition, gives the same meaning in Hindi, works through an example and answers the questions people ask most. Where a free calculator or format does the job — a GST calculator, a safety stock calculator, a GRN format — the term links straight to it.
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- 5 Whys (root cause analysis)Production & qualityThe 5 Whys is a root cause analysis technique in which a team asks 'why?' repeatedly — typically about five times — starting from a problem, until it reaches a cause that, if fixed, stops the problem coming back.
- 5SProduction & quality5S is a workplace organisation method with five steps: Sort (Seiri), Set in order (Seiton), Shine (Seiso), Standardise (Seiketsu) and Sustain (Shitsuke).
A
- Accounts receivableAccountingAccounts receivable is the money customers owe a business for goods or services already supplied on credit. It is shown as trade receivables (debtors) under current assets.
- Accrual vs cash basis of accountingAccountingUnder the accrual (mercantile) basis, income and expenses are recorded when they are earned or incurred, whatever the payment date. Under the cash basis, they are recorded only when cash is actually received or paid.
B
- Balance sheetAccountingA balance sheet is a statement of what a business owns (assets) and what it owes (liabilities and owners' equity) on a particular date. Total assets always equal total equity plus liabilities.
- Bill of supplyGST & taxA bill of supply is the GST document issued instead of a tax invoice when no tax can be charged — by a composition taxpayer, or by a registered person supplying exempt goods or services. It shows no GST amount.
- Bin cardPurchase & storesA bin card is a record kept at each storage bin or rack by the storekeeper, showing the quantity of an item received, issued and in balance after every transaction. It records quantities only, not values.
- Blocked credit under GST (Section 17(5))GST & taxBlocked credit is GST paid on purchases that cannot be claimed as input tax credit even when used in business, because section 17(5) of the CGST Act specifically disallows it — such as food, most passenger cars and construction of buildings.
- BOM (Bill of Materials)Production & qualityThe list of materials, parts and quantities needed to make one unit of a product.
- Break-even pointBusinessThe sales volume at which revenue equals total cost.
C
- CAPA (Corrective and Preventive Action)Production & qualityCAPA stands for Corrective and Preventive Action — a structured process to find the root cause of a quality problem, fix it so it does not recur (corrective), and stop similar problems before they occur (preventive).
- Capex vs opexBusinessCapex (capital expenditure) is money spent on long-term assets such as machinery or buildings; it is capitalised and depreciated. Opex (operating expenditure) is the day-to-day cost of running the business — wages, power, rent — and is charged to profit in the year.
- Cash conversion cycleAccountingThe cash conversion cycle (CCC) is the number of days between paying for raw material and collecting cash from the customer for the finished goods: days inventory outstanding plus days sales outstanding minus days payables outstanding.
- Composition scheme (GST)GST & taxThe composition scheme is an optional, simpler GST scheme for small taxpayers: they pay tax at a low fixed percentage of turnover, file quarterly, but cannot charge GST on their invoices or claim input tax credit.
- Contra entryAccountingA contra entry is a transaction between cash and bank accounts of the same business — such as cash deposited into the bank or cash withdrawn for office use — where both the debit and the credit side are cash or bank.
- Contribution marginAccountingContribution margin is selling price minus variable cost. It is the amount each sale contributes first towards fixed costs and then to profit; as a percentage of sales it is called the contribution margin ratio or P/V ratio.
- Cost of goods sold (COGS)AccountingCost of goods sold (COGS) is the direct cost of the goods a business sold in a period: Opening stock + Purchases + Direct expenses − Closing stock.
- Credit note / Debit noteGST & taxDocuments that reduce or increase the value of an invoice already issued.
- CTC (Cost to Company)BusinessThe total yearly cost of an employee to the employer, including employer PF and gratuity.
D
- Delivery challanGST & taxThe document that accompanies goods moved without a sale, such as job work or approval.
- DepreciationAccountingDepreciation is the reduction in the value of a fixed asset — machinery, vehicles, buildings — because of use, wear and passage of time, charged as an expense over the asset's useful life.
- DMAIC (Six Sigma)Production & qualityDMAIC — Define, Measure, Analyse, Improve, Control — is the five-step, data-driven problem-solving method used in Six Sigma to improve an existing process by finding and removing the root causes of defects and variation.
- Double entry systemAccountingThe double entry system records every transaction in at least two accounts — one debited and one credited for the same amount — so the books always balance.
E
- E-invoiceGST & taxA B2B invoice reported to the GST portal for an IRN and QR code.
- E-way billGST & taxThe electronic permit for moving goods above ₹50,000 under GST.
- EOQ (Economic Order Quantity)Purchase & storesThe order size at which ordering and carrying costs together are lowest.
- ERP (Enterprise Resource Planning)BusinessOne system and database for sales, purchase, stores, production, accounts and HR.
- ESI (Employees' State Insurance)BusinessMedical and cash-benefit insurance for employees earning up to ₹21,000 a month.
F
- FIFO / LIFOAccountingFirst In First Out / Last In First Out — methods of costing stock issues.
- First pass yield (FPY)Production & qualityFirst pass yield (FPY) is the percentage of units that pass a process step correctly the first time, without rework, repair or scrap. FPY = units passed first time ÷ units entering the step × 100.
- Fishbone diagram (Ishikawa)Production & qualityA fishbone diagram, also called an Ishikawa or cause-and-effect diagram, lays out all the possible causes of a problem in categories along the 'bones' of a fish whose head is the problem, so that a team can brainstorm and then test the likely ones.
- FSN analysisPurchase & storesFSN analysis classifies inventory items as Fast-moving, Slow-moving or Non-moving according to how often and how much they are issued over a period, so that stores can focus replenishment on fast items and clear the rest.
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- Golden rules of accountingAccountingThe three golden rules of accounting decide which account is debited and which is credited: Personal account — debit the receiver, credit the giver. Real account — debit what comes in, credit what goes out. Nominal account — debit all expenses and losses, credit all incomes and gains.
- GratuityBusinessA lump sum paid to an employee on leaving after qualifying service.
- GRN (Goods Receipt Note)Purchase & storesThe record of goods received from a supplier against a purchase order.
- GST registration limitGST & taxA business must register under GST once its aggregate turnover in a financial year crosses ₹40 lakh if it supplies only goods, or ₹20 lakh if it supplies services — with lower limits in some special-category states — or earlier if it falls in a compulsory registration category.
- GSTINGST & taxThe 15-character GST identification number of a registered business.
- GSTR-1 vs GSTR-3BGST & taxGSTR-1 is the return of outward supplies — invoice-wise details of sales. GSTR-3B is the summary return in which tax is actually paid and input tax credit claimed. Both are filed by regular GST taxpayers.
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I
- Incoterms (EXW, FOB, CIF, DDP)BusinessIncoterms are standard trade terms published by the International Chamber of Commerce that set out, for a sale of goods, who arranges and pays for transport, insurance and customs, and the point at which risk passes from seller to buyer.
- Input tax credit (ITC)GST & taxGST paid on purchases that can be set off against GST payable on sales.
- InventoryPurchase & storesInventory is the stock of goods a business holds to make or sell — raw material, work in progress, finished goods and consumables. In Hindi it is माल सूची or भंडार.
- Inventory turnover ratioPurchase & storesCost of goods sold divided by average inventory.
- ITC reversal under GSTGST & taxITC reversal means paying back input tax credit already claimed, or not claiming it, when the conditions for credit are not met — for example the supplier is not paid within 180 days, or inputs are used for exempt supplies.
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- Job cardProduction & qualityThe shop-floor record of an operation on a work order — who, what, how long.
- Job workProduction & qualityJob work means processing of goods belonging to another registered person (the principal) — such as machining, plating, painting or heat treatment. Under GST, the principal can send goods to a job worker on a challan without paying tax, if they come back in time.
- Journal entriesAccountingA journal entry is the first record of a business transaction in the books, showing the date, the account debited, the account credited, the amount and a short narration. Every entry has equal debits and credits.
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L
- Landed costPurchase & storesPurchase price plus freight, duty and other costs to bring goods to your store.
- Lead timePurchase & storesLead time is the time from starting a process to finishing it — for purchase, from placing an order to receiving the goods; for a customer, from their order to delivery.
- Lean manufacturingProduction & qualityLean manufacturing is a way of running production that maximises value to the customer by systematically removing waste — anything that uses time or resources without adding value.
- Letter of credit (LC)BusinessA letter of credit (LC) is a bank's written undertaking, issued on behalf of a buyer, to pay the seller a stated amount once the seller presents documents that comply exactly with the LC's terms within the time allowed.
M
- Machine hour rateProduction & qualityThe cost of running a machine for one hour.
- Margin vs markupAccountingMarkup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A product costing ₹800 sold at ₹1,000 has a 25% markup but a 20% margin.
- Master production schedule (MPS)Production & qualityA master production schedule (MPS) is the plan of which finished products will be made, in what quantity, in each period — usually week by week. It is the input that MRP explodes into material requirements.
- MOQ (Minimum Order Quantity)Purchase & storesMOQ stands for Minimum Order Quantity — the smallest quantity a supplier will accept in one order for an item, set so that its own setup, packing and freight costs are covered.
- MRP (Material Requirement Planning)Production & qualityWorking out what material is needed, how much and when, from demand, BOMs and stock.
- MSME (Micro, Small and Medium Enterprises)BusinessMSME stands for Micro, Small and Medium Enterprises. From 1 April 2025 an enterprise is micro up to ₹2.5 crore investment and ₹10 crore turnover, small up to ₹25 crore and ₹100 crore, and medium up to ₹125 crore and ₹500 crore.
N
- NCR (Non-Conformance Report)Production & qualityNCR stands for Non-Conformance Report — the record raised when a product, material or process does not meet its specification, describing the defect, quantity and what will be done with it.
- Nil-rated, exempt, zero-rated and non-GST supplyGST & taxNil-rated supplies carry a 0% GST rate; exempt supplies are wholly exempted from GST; zero-rated supplies are exports and supplies to SEZs, where ITC is still allowed; non-GST supplies are items outside GST altogether, such as petrol and alcohol for human consumption.
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- OEE (Overall Equipment Effectiveness)Production & qualityAvailability × Performance × Quality of a machine.
- Outstanding expensesAccountingOutstanding expenses are expenses that belong to the current accounting period but have not been paid by its end — such as March salary paid in April. They are added to the expense and shown as a current liability.
P
- P2P (Procure to Pay)Purchase & storesThe cycle from requisition to paying the supplier.
- Pareto analysis (80/20 rule)Production & qualityPareto analysis ranks causes or categories from largest to smallest to show the 'vital few' that account for most of the effect — based on the 80/20 principle that roughly 80% of problems come from 20% of causes.
- PF (Provident Fund)BusinessRetirement savings with 12% from employee and employer on basic + DA.
- Place of supply (GST)GST & taxPlace of supply is the state where a supply is treated as made under GST. If it is in the supplier's state, CGST + SGST apply; if it is in another state, IGST applies.
- Poka-yokeProduction & qualityPoka-yoke is a Japanese term meaning 'mistake-proofing' — designing a process or fixture so an error cannot happen, or is detected immediately.
- PPAP (Production Part Approval Process)Production & qualityPPAP stands for Production Part Approval Process — the set of documents and samples a supplier submits to an automotive customer to prove that its production process can consistently make parts that meet every requirement, at the quoted rate.
- Prepaid expensesAccountingPrepaid expenses are payments made in advance for a benefit that falls partly in the next accounting period — such as a yearly insurance premium paid in January. The unexpired part is shown as a current asset, not an expense.
- ProcurementPurchase & storesProcurement means obtaining the goods and services a business needs — from identifying the need and choosing a supplier to ordering, receiving and paying. In Hindi, procurement means खरीद or प्रापण.
- Profit and loss accountAccountingA profit and loss (P&L) account shows a business's income and expenses for a period and the resulting net profit or loss. For companies it is called the Statement of Profit and Loss.
- Proforma invoiceGST & taxA preliminary bill sent before supply; not a tax invoice.
- Provision vs reserveAccountingA provision is a charge against profit for a known liability or loss whose amount is uncertain, such as doubtful debts or warranty claims. A reserve is a part of profit set aside after it is earned, to strengthen the business — it is an appropriation, not an expense.
- Purchase order (PO)Purchase & storesThe buyer's formal order to a supplier.
- Purchase requisitionPurchase & storesAn internal request to buy material, raised before a purchase order.
R
- Reorder levelPurchase & storesThe stock level at which a fresh order must be placed.
- Reverse charge mechanism (RCM)GST & taxGST paid by the buyer instead of the supplier for notified supplies.
- RFQ (Request for Quotation)Purchase & storesRFQ stands for Request for Quotation — a document a buyer sends to several suppliers asking for their price and terms for specified items and quantities.
- RoutingProduction & qualityThe sequence of operations and work centres a product goes through.
S
- Safety stockPurchase & storesExtra stock held to cover demand and lead-time variation.
- SKU (Stock Keeping Unit)Purchase & storesSKU stands for Stock Keeping Unit — a unique code for each distinct item a business stocks, so that every variant (size, grade, finish) is counted separately.
- SMED (Single-Minute Exchange of Die)Production & qualitySMED stands for Single-Minute Exchange of Die — a lean method, developed by Shigeo Shingo, for reducing machine changeover time to under ten minutes (a single-digit number of minutes) by doing as much setup work as possible while the machine is still running.
- SOP (Standard Operating Procedure)Production & qualitySOP stands for Standard Operating Procedure — a written, approved set of step-by-step instructions for doing a routine task the same correct way every time, whoever does it.
- Sundry debtors and sundry creditorsAccountingSundry debtors are customers who owe the business for goods or services sold on credit; sundry creditors are suppliers the business owes for credit purchases. In Schedule III they are called trade receivables and trade payables.
- Suspense accountAccountingA suspense account is a temporary account used to park an amount whose correct account is not yet known, or the difference in a trial balance that does not tally, until the error is found and corrected.
T
- Takt timeProduction & qualityTakt time is the pace at which products must be finished to meet customer demand: Takt time = Available production time ÷ Customer demand.
- TDS / TCSGST & taxTax deducted or collected at source on specified payments and sales.
- Three-way matchPurchase & storesThree-way match is the check before paying a supplier that the purchase order, the goods receipt note (GRN) and the supplier's invoice agree on item, quantity and rate. Only the quantity actually received and accepted is paid.
- TPM (Total Productive Maintenance)Production & qualityTPM stands for Total Productive Maintenance — a plant-wide approach in which operators, maintenance and management together aim for zero breakdowns, zero defects and zero accidents, with operators taking care of routine upkeep of their own machines.
- Trial balanceAccountingA trial balance is a list of every ledger account with its debit or credit balance on a date. If the books follow double entry, total debits equal total credits.
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- VED analysisPurchase & storesVED analysis classifies inventory — especially spare parts — as Vital, Essential or Desirable based on how critical the item is to keeping production running, rather than on its cost or how often it moves.
- VendorPurchase & storesA vendor is a person or business that sells goods or services to another business. In Hindi, vendor means विक्रेता.
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About this glossary
Why are some terms linked to tools or articles instead of a glossary page?
Where the site already explains a term in depth — GRN on the GRN format page, CTC on the salary calculator, EOQ on the EOQ calculator — the glossary links there rather than repeating a thinner version of the same answer.
Are the Hindi meanings translations of the English definitions?
They give the same idea in plain Hindi, written for people who search in Hindi, such as 'procurement meaning in hindi'. Technical words that are used as they are on the shop floor, like GST or BOM, are kept in English.
Are the GST and payroll figures current?
Yes, as of the date shown on each tool. GST slabs follow the rates in force from 22 September 2025, and payroll limits follow the latest EPFO, ESIC and income-tax notifications. They are reviewed every year and whenever a notification changes them.