Accounting Automation & Ecommerce Glossary

Brick-and-mortar store: A physical store where customers can walk in and purchase a product.

E-tail: A trendy term for ecommerce retail and online retail.

Platform: A service that allows individual merchants to create hosted websites under their own business name and web address. Some examples are Magento, Shopify, X-Cart, and BigCommerce. Platforms include everything needed for an ecommerce website, including website hosting, payment processing, and a shopping cart.

Marketplace: A website on which multiple sellers offer their products under a single web address. Some examples are Amazon, eBay, and Etsy. The primary advantage of using marketplaces is that the store setup is very easy and they have a large, built-in customer base.

Merchant: The retailer or seller of a product.

Multichannel commerce: This is when a merchant utilizes more than one method for online selling. For example, selling on Amazon and having a Shopify store in addition to a brick-and-mortar location. This allows sellers to reach a much wider group of customers and allows for several marketing and outreach strategies.

Omnichannel commerce: Omnichannel commerce is a multichannel sales approach that provides the customer with an integrated and unified customer experience across each sales channel.

Retail: A store that sells products to the final user.

Scale: The process of adjusting the size and scope of a business. For example, adding sales channels or closing a physical location.

Shopping cart: A software component or extension that creates items and sells those items within its interface on any website. For example, Zencart, Ubercart, and osCommerce. Shopping carts are used when selling from one’s own website without using a platform or a marketplace. They are considered a cost-effective solution for new sellers.

Vendor: A supplier of inventory or products.

Wholesale: A company that sells products, often in larger quantities, to retailers or other wholesalers.

Alternative LookUp number (ALU): An additional descriptive item identifier. This is a rarely used identification. It is typically only necessary in situations in which the SKU, item name or number, and UPC are unavailable or inappropriate.

Assembly item: An assembly type item in QuickBooks is correct to use if you have a finished good that is made of raw materials that is stocked as a finished good and not easy to disassemble. A good example would be a manufacturer who sells bike parts and makes bikes from those parts that they keep in stock anticipating a sale. In order to convert raw materials into a finished good you must use Build Transaction in QuickBooks. This reduces your raw materials and increases your finished goods.

Group item: A group type item in QuickBooks is correct to use for items that are commonly sold together, but are still independent items and stay that way until an order is selected. A good example is a gift basket or a 10-pack. These items can be easily disassembled so it doesn’t make sense to make them in advance of a sale.

Parent item: The parent item is the base item to which variants, options, and attributes are applied to. For example, if you are selling a t-shirt, you would create a parent item, t-shirt. It is a further specification of the t-shirt category, which when specified with variants becomes an actual item.

Child item: The product that derives from the parent item after the attributes, variants, or options are applied, most commonly a size and/or color. This is the item that the customer actually buys. For example, if someone selects t-shirt, they are presented with color and size options. The item specified by the selection of those options is the child item. More information on variants.

Discount code: A code on certain shopping carts that initiates a designated decrease in price. For example, when the buyer enters a code like SPRING25 into the discount section during checkout to receive 25% off.

Discount item: A specific item used for discounts in certain shopping carts like Magento and BigCommerce, that initiates a designated decrease in price.

Inventory part: Items that hold quantity. There is a definite number of these items at any given time. Any physical object would be classified as an inventory part.

Manufacturer Part Number (MPN): The number that the manufacturer uses to denote their items. This is often stored in the item information in order to make reordering easy.

Non-inventory part: Items that hold no quantity and can be purchased infinitely For example, a service or a download.

Order status: The various tags a shopping cart assigns an order in response to the various events that occur during the processing of an order. For example, you might make an order pending when it is first ordered and then shipped when a shipping label is generated.

Other charge: A term used for miscellaneous charges. For example, shipping charges.

Stock Keeping Unit (SKU): The alphanumeric designation for a product or item. Most shopping carts use SKUs as the way it identifies an item.

Learn more about inventory terminology in Webgility.

Accrual: A system of accounting under which revenue is recorded when earned and expenses are recorded when incurred. At the end of the accounting period, total revenue and total expenses are reported. Essentially, it is tracking your cost and expenses at the time of their occurrence.

Cash: Money on hand. For example, a bank account balance, petty cash, and customer checks. This is how much money you can access right now from non-credit resources.

Compliance: Meeting the requirements of a governing body. For example, paying sales tax to the local government.

Gross: The amount preceding the subtraction of deductions or adjustments For example, your gross receipts are the total amount of money you received in a day. The gross expenses would be the amount of money spent, with no adjustments for any other consideration.

Inventory asset: An income account that reflects the total value of inventory purchased and held within a company. This would be the value of your inventory, usually expressed as how much you will charge for the product. For example, if you have ten $100 troll dolls in inventory, your inventory asset account has a value of $1,000.

Invoice: A paid or unpaid bill issued by a merchant to a buyer. Invoices tend to be issued when there is any delay in payment, or in business-to-business transactions where invoices are used in accounting.

Profit: The amount left over after costs are deducted from revenue. Profit is used to measure a business’s success.

Purchase order: An offer issued by a merchant to a vendor which indicates quantities and prices for items being ordered.

Margin: The difference between the cost of an item and the selling price of an item.

Matching criteria: Data that Webgility uses to recognize a product in the online store and its corresponding twin in QuickBooks. The most common pair to match are the SKU, and the item name or number.

Net: The amount after the subtraction of deductions or adjustments. Net is generally the key number to realize because it shows your profitability.

Revenue: The amount earned from a sale of goods before costs or expenses are deducted.

Sales or purchase order: An order for items or services to be paid for by the customer and then fulfilled by the business.

Sales receipt: A written proof of a completed sale which includes taxes, discounts, and adjustments for a paid sale. A receipt requires goods or services to have been exchanged.

Transaction: The record of an invoice, credit memo, or return.

Economic nexus: A connection between a business and a taxing jurisdiction that creates a legal requirement for the business to register and remit taxes within the jurisdiction.

Local tax: Municipality or county tax, usually charged at a separate and additional percentage from the state tax. This is almost always a sales tax. For example, if you are selling something in San Francisco to someone in San Francisco you would have to pay both the sales tax for California and the sales tax for San Francisco.

Out-of-state tax: Percentage of tax charged to buyers of a different state or municipality than the goods purchased.

Sales tax: Tax that applies to the sale of goods to the final user.

Taxability: Whether the products and services you sell are fully taxable, partially taxable, or non-taxable. This varies based on the product or service type, amount, quantity, transaction date, and jurisdiction.

Tax code: The body of law which defines when a tax is assessed and how much the tax is.

Value-Added Tax (VAT): Tax that is added to the market value of an item that is used in Canada, Australia, New Zealand, and the European Union. It is very similar to a sales tax.

Dropshipping: Selling inventory directly from the vendor to the buyer so that fulfillment is handled by the dropshipper.

Fulfillment: The process of receiving, packaging, and shipping orders.

Packaging: The physical wrapping of merchandise in an order to contain, identify, describe, display, protect, and ship.

Shipping charges: The amount a customer pays the merchant for shipping when placing the order. This is what your customer pays you.

Shipping cost: The charge the merchant pays the shipping provider to transport the order to a customer. This is what you would pay to FedEx or the U.S. Postal Service.

Backorder: An order that has at least one fulfillable item and one out-of-stock item which must be fulfilled later. Backorders are a good way to capture additional revenue, but they require a higher level of organization to ensure they are fulfilled in a timely manner.

Not-yet syndrome: Fear of hitting the go button on your online sales. Don't wait until Webgility is fully implemented to launch your store. It is important to understand where and how Webgility can improve your order fulfillment operations, so go ahead and get started. As important as preparation is, there is nothing like an actual, ongoing operation to help you revise your workflow.

Overselling: When the merchant doesn't have enough inventory to fulfill multiple orders on multiple selling channels.

Sub-items: In QuickBooks, the sub-item is always associated with and combined with the parent designation and separated by a colon : . This adds unnecessary complexity to child items.

Store connection: Any connection between an ecommerce store, marketplace, or a shipping provider via Webgility.

Product identifier: When tracking inventory or sales of a particular product, the product needs some unique identifier by which all of its sales and purchases can be compared. Typically in the sales channel or accounting system products have this identifier in their SKU field. If a SKU field does not exist, the identifier may be the product name or some other field like Manufacturer Part # or UPC. For products to match between the accounting system and sales channel, and for sales to record their products and inventory consistently to the same linked identifiers, sales channel products and accounting system record products should be given the same identifier, in the same field - every time.

Product mappings: Mappings of any kind are links between two objects in two systems that do not automatically match. Within Webgility if a Sales Channel product's identifier does not match exactly to the corresponding product identifier in the accounting system, a mapping can be saved within Webgility to connect the two products. This mapping linking Product A with Product a does not change or alter the identifier in either connected system, but only links the two using Webgility so that no historic records are ruined by an updated identifier in either system.