ERP Glossary - A: Accounting Equation to Ad Hoc Query

3rd Party Application

Any piece of software which is developed by an external company to the core vendor. ERP vendors are increasingly providing integration services for popular 3rd party applications including payroll and HR systems.

Accounting Equation

The fundamental math supporting a balance sheet, defined by the equation "assets=liabilities plus equity".

Accounting Manager

The person with responsibility for calculating the total expenses incurred and the total revenue generated by an organization, and ensuring the integrity and consistency of those calculations.

Accounting Software

A computing program or programs that uses standard accounting methodology, and programmable rules, to aid in maintaining consistency and eliminating math errors in the accounting process.

Accounting Standards

The specific practices within each method of accounting prescribed by professional or regulatory boards.

Accounts Payable

A current liability account which represents owed, but unpaid balances to vendors. Your personal credit card balance is an example of an accounts payable.

Accounts Receivable

A current asset account which represents owed, but unreceived payments from customers. When you have invoiced someone, and are awaiting the arrival of a check or deposit, you have an accounts receivable.

Accrual

A financial account entry to indicate that a good or service has been consumed, but not yet paid for. When the good or service has been paid, the accrual is reversed (removed).

Activity-based Costing System

A philosophy of costing premised on the notion that products and orders should be costed according to how much complexity and disruption they cause, and be neither unfairly punished nor subsidized by participating in general averaging.

Actual Cost

The true expense incurred to accomplish a task or complete a work order. The actual cost may be more or less than the standard (expected) cost; the mathematical difference is called a variance.

Ad Hoc Query

A one-time or spur-of-the-moment question asked of a business information system. The ability to allow a wide group of end-users to quickly create ad hoc queries and obtain accurate timely answers increases the effectiveness of a business information system exponentially.

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Tom Feltham

About the author…

Tom Feltham was Editor at ERP Focus for three years from 2013-2016. Tom still keeps tabs on the ERP software market and occasionally puts pen to paper when inspiration strikes.

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Tom Feltham