Bookkeeping terms in plain English

Use this reference when a label in Bokeping is unfamiliar. Follow the linked guides when you are ready to take action.

Customers and vendors

Accounts receivable (A/R): money customers still owe your business.

Accounts payable (A/P): money your business still owes vendors.

Invoice: a request for payment from a customer. See create an invoice.

Bill: a supplier’s invoice recorded as an amount your business owes. See enter a bill.

Credit memo: a document that reduces what a customer owes or gives them a credit to apply. It is not necessarily a cash refund.

Unapplied money and deposits

Unapplied Amount: money recorded on a customer payment but not yet used to settle an invoice. It can represent an advance or overpayment. See customer deposits.

Vendor prepayment: money paid before it is allocated to a vendor bill. Bokeping holds the unapplied amount in the Vendor Prepayments asset account; it is not an ordinary Vendor Credit document. See vendor prepayments.

Undeposited Funds: a holding account for money received but not yet grouped into a bank deposit. Moving it to the bank should not recognize the sale a second time. Compare receipts, deposits, and fees when a payout differs.

Banking

Bank feed: activity brought in through a bank connection for review.

Match: link imported bank activity to a record already in your books.

Categorize: assign the appropriate accounting treatment to activity that needs to be recorded.

Reconciliation: compare your books with a bank or credit card statement. See reconcile an account.

Accounting and reporting

Chart of accounts: the organized list of accounts used to classify transactions.

Opening balance: an account’s starting amount when you begin keeping books in Bokeping.

Debit and credit: the two sides of a double-entry accounting entry. They do not universally mean money out and money in; their effect depends on the account type.

General ledger: the detailed record of transactions organized by account.

Trial balance: a list of ledger account balances used to check that total debits and credits agree. Agreement alone does not prove that every transaction is correct.

Fiscal year: the annual period your business uses for its accounts; it may differ from the calendar year.

Aging report: outstanding customer or vendor balances grouped by how long they have been due.