ERP glossary for Indian manufacturing

Buying

Indent

A request for material, raised by the department that needs it. It is not an order and commits nobody — it is the paper that starts the buying process. In IndustryMax an indent line carries a per-unit rate and a quantity, the value is calculated rather than typed, and the form warns if the same item is already sitting on another open, unissued indent.

RFQ — request for quotation

An enquiry sent to several suppliers asking what they would charge. Still not an order. In IndustryMax it goes out by email and WhatsApp at once, each supplier answers through their own link without an account, and a supplier can decline the enquiry rather than just going quiet.

Quotation (supplier)

One supplier's answer: rate, taxes, delivery date, terms. In IndustryMax these land on a comparison grid priced landed rather than headline, so freight and packing cannot hide a difference, and the cheapest is ranked L1.

Reverse auction

An enquiry run as a live event, where invited suppliers see their rank and lower their price against a clock. It is called reverse because in an ordinary auction the price goes up. In IndustryMax the award, an override of the lowest bidder, a manual extension and a cancellation are five separately approvable decisions.

Purchase order (PO)

The commitment: we will buy this much, at this price, from this supplier. It creates a legal obligation but moves no stock and records no money owed. In IndustryMax a PO can require one signature or several by amount, and an amendment to an approved one goes back through the same rule because an amendment can move the order into a higher band.

Rate contract

A price agreed with a supplier for a period, rather than for one order. In IndustryMax it is shown against whatever rate a buyer types, so a departure from the agreed price is visible at the moment it is made.

Work order

An order for work rather than for material — fabrication, machining, a repair. It runs its own chain, ending in a work receipt note rather than a goods receipt, because what arrives is a completed job and not a quantity in a store.

Receiving

Gate entry

The security gate logging a vehicle and its material arriving, before anybody in the store has looked at it. It proves something turned up and when. It is not a receipt and moves no stock. In IndustryMax it is optional, switched on per customer.

Store receiving (SR)

The storekeeper counting what physically arrived against the order. Counting and judging are deliberately two jobs: the storekeeper counts, the inspector decides what is acceptable.

GRN — goods receipt note

The record of what was accepted after being checked. This is the document that adds stock, and it is the reality against which the purchase order was only a promise. Order 500 kg, 300 arrive, 290 pass and 10 are damaged: the GRN says 290. In IndustryMax rejected material never enters stock, and a receipt that accepted nothing is refused rather than recorded as a receipt of zero.

Gate entry vs GRN

The most commonly confused pair. Gate entry says a lorry arrived. The GRN says what was accepted off it. Between the two sit the count and the inspection, and quantities can differ at every stage.

Direct GRN

A goods receipt with no purchase order behind it, for material that simply arrives. In IndustryMax such a receipt can be billed once, in full.

Work receipt note (WRN)

The receiving document for a work order — confirmation that the work was done and accepted, rather than that a quantity was delivered.

Supplier bill / purchase invoice

The supplier's invoice. This is when money becomes owed and when the input GST on the purchase is recorded. It is a separate event from the goods arriving, in date and often in amount, which is why it is a separate document.

Purchase order vs supplier bill

The order says what we agreed to buy. The bill says what we are being charged. They disagree often and legitimately — part delivery, a rate correction, freight added — and a system that treats them as one document has no way to show the disagreement.

Debit note

A claim back against a supplier: short supply, rejected material, a wrong rate. It reduces what we owe them.

Stores and stock

Material issue

Stock going out of the store to a department, against an indent. It is the moment consumption starts being somebody's responsibility. In IndustryMax the department later records what it actually used and what is still with it, and anything unused comes back on a return to store.

Returnable gate pass (RGP)

Material leaving the site that is expected back — a tool sent for repair, a die going out to a job worker.

Non-returnable gate pass (NRGP)

Material leaving for good, including refused goods going back to a supplier.

Stock transfer

Moving stock from one location to another without buying or selling anything. In IndustryMax it can require approval, and where it does the stock moves on approval and not before — nothing is reserved while it is pending, and the slip prints only once the stock has actually been released.

Stock adjustment

A correction to the book figure, with a reason. It is the honest alternative to quietly editing a balance, and it is reversible.

Physical stock take

Counting what is really there and comparing it with what the book says. The difference is the variance. In IndustryMax it supports count sheets, cycle counting so the whole store does not stop, and posts the result as an adjustment with the count behind it as the reason.

Opening stock

What was on hand on the day the system started being used. In IndustryMax it is declared once on its own document with the rate, posts on approval, and is never editable afterwards — because an editable opening balance makes every later figure unprovable.

Inventory valuation

What the stock on hand is worth, which depends on which method you use to decide which units were consumed. FIFO says the oldest went first; weighted average smooths every receipt into one rate. The methods give different answers on the same stock, which is why changing one is a revaluation and not a setting.

Production

BOM — bill of material

The recipe: what an item is made of, in what quantities, for what output quantity. A BOM usually also carries an expected scrap percentage per component, because a process that wastes nothing does not exist.

Production order

A planned run of a quantity of one item. In IndustryMax releasing it snapshots what that run will need, recalculated from scratch each time so releasing twice cannot double a requirement.

Work centre

Where an operation happens — a machine, a bay, a bench.

Routing

The ordered list of operations an item passes through, and which work centre each belongs to.

Job card

The record of work actually done at one operation: how much was good, how much was rejected, how much was scrapped, and how long the centre stood idle.

WIP — work in progress

Material that has left the store into a run but has not yet come back as a finished item. It is neither raw material nor stock you can sell, which is exactly why it needs its own figure.

Yield

How much good output a run produced against what it should have. A low yield and a high scrap figure are the same fact seen from two sides.

Scrap

Material lost in the process. Some is expected and is built into the recipe; the rest is the number worth looking at.

Job work

Work done on somebody else's material. Sent out, it is our work order at a job worker. Received in, it is a customer's goods on our floor under their challan — and it is theirs throughout, which is why it is kept away from our own production orders.

Selling

Lead

An enquiry from somebody who might buy. In IndustryMax creating one finds or creates the customer behind it, matched on GSTIN, phone, email or company name, so the same buyer does not appear three times.

Quotation (to a customer)

What we offered, at what price, on what terms. It expires, it can be revised, and it commits nobody until it is accepted.

Sales order

The confirmed order. It commits us to supply but moves no stock and creates no receivable.

Quotation vs sales order

A quotation is an offer that the customer may or may not take. A sales order is the deal, after they took it. In IndustryMax a quotation converts to exactly one order and is then marked converted rather than left open forever.

Proforma invoice

An invoice-shaped document that is not a tax invoice — it demands nothing and reports no GST. It is what a buyer takes to their finance team to release payment. In IndustryMax a draft sales order prints as one.

Dispatch / delivery challan

Goods leaving, on a stated vehicle, to a stated address. This is the step that reduces stock. It is not a tax document.

Tax invoice

The GST document. It creates the receivable and reports the output GST on the supply. A dispatch and an invoice can be one-to-one, but often are not — three loads may be invoiced once, or one load invoiced in parts.

Dispatch vs tax invoice

The dispatch moves the goods; the invoice moves the money and the tax. Keeping them separate is what lets a factory deliver against a running order all month and invoice at the end of it.

Receipt

Money in, allocated against particular invoices. An unallocated receipt is money you have but cannot yet say what it settles.

Credit note

Value going back to a customer — a return, a rate correction, a discount agreed after the fact. It always reduces the receivable; where it is a goods return it also brings the stock back.

Debit note vs credit note

Direction, and who raises it. We raise a debit note against a supplier to reduce what we owe them. We raise a credit note to a customer to reduce what they owe us. The two are not the same document seen from two sides — each is raised by the party reducing what it will pay or be paid.

AR ageing

Outstanding customer money, sorted by how long it has been outstanding. It is the difference between knowing you are owed a crore and knowing half of it is over ninety days old.

GST and tax terms

GSTIN

The 15-character registration number a business holds in a state. A business registered in three states holds three, and each is a separate filing entity — which is why IndustryMax models a company as one GSTIN rather than one brand.

HSN and SAC

Standard classification codes — HSN for goods, SAC for services — that decide the tax rate and have to appear on the invoice. In IndustryMax they sit on the item master and are read onto documents, so one item cannot be taxed two ways on two invoices.

CGST, SGST and IGST

Tax within a state splits into a central half and a state half (CGST and SGST). Tax across a state line is one integrated tax (IGST). Which one applies is decided by the place of supply, not by a preference.

Place of supply

Where a supply is treated as having happened, which is what decides between CGST/SGST and IGST. It is a rule, not a choice, and getting it wrong is a filing problem rather than a display problem.

e-Invoice and IRN

For businesses above a turnover threshold, a tax invoice has to be registered with the government's Invoice Registration Portal before it is valid. The portal returns an Invoice Reference Number and a digitally signed QR code that must be printed on the invoice. It is the same invoice — registered, not replaced.

e-Way Bill, Part A and Part B

A movement permit for goods above a value threshold. Part A describes the consignment; Part B names the vehicle. It has a validity that depends on distance, and it can be extended.

ITC — input tax credit

The GST you paid on purchases, set against the GST you collected on sales. It is why a supplier's invoice matters to you beyond the amount: an unmatched or unpaid bill can cost you the credit on it.

RCM — reverse charge mechanism

Cases where the buyer, not the supplier, pays the GST to the government. In IndustryMax it is carried on the supplier bill.

TDS — tax deducted at source

Tax withheld from a payment and deposited on the payee's behalf. In IndustryMax it is carried on supplier bills.

GSTR-1, GSTR-3B and GSTR-2B

GSTR-1 reports what you sold; GSTR-3B is the monthly summary and payment; GSTR-2B is the statement of what your suppliers reported against you, which is what your input credit is checked against. IndustryMax builds the outward figures and reconciles GSTR-2B; it does not file returns.

UQC — unit quantity code

The standard unit abbreviation a GST return expects. It matters because your own unit names, your supplier's, and the return's need not agree, and a mismatch is only discovered at filing time.

Tally's words for the same things

TallyPrime uses different names for documents an operations team already has names for. This mapping is the whole of the integration in one table.

Godown

Tally's word for a warehouse or store location. Every inventory line in Tally sits in one.

Ledger

Tally's word for an account — a supplier, a customer, a bank, a tax head. Tally addresses parties by ledger name, which is why an integration has to map its own party records to Tally's ledger names before anything can be reconciled.

Voucher

Tally's word for any accounting document. A sales invoice is a voucher, so is a journal entry, so is a receipt note.

Tracking number

The reference that ties a Receipt Note to the Purchase that bills it. Without it Tally has no way to know the bill is for that delivery, and adds the goods to stock a second time.

Questions

Related

• Procure to PayHow procure-to-pay works in IndustryMax: indent, approval, RFQ, quotation comparison or reverse auction, purchase order, gate entry, store receiving, GRN, supplier bill and payment — and exactly which step moves stock and which creates money owed.
• Order to CashHow order-to-cash works in IndustryMax: lead, quotation, sales order, dispatch, GST tax invoice with e-invoice and e-way bill, receipt and credit note — and exactly which step moves stock, which creates the receivable and which reports the tax.
• TallyHow documents reach Tally, what was measured on a real customer book, and the connector's network posture.
• ProductionBills of material, production orders, work centres, routings and job cards in IndustryMax — with material issued against the order, output received into stock, and WIP, yield, scrap and variance reported from the same records.