Inventory management involves a wide range of processes, tools, and terms that can be confusing, especially for those new to the field. Whether you’re a warehouse manager, small business owner, or just getting started in logistics, understanding the right vocabulary is key to running a smooth operation.
This glossary brings together the most common and essential terms used in inventory management. It’s designed to help you:
An inventory categorization technique that divides inventory into three categories – A, B, and C – based on their value and importance. A items are high-value items that require close monitoring, B items are moderate-value items, and C items are low-value items that require less attention.
The ability to connect Goods Order Inventory with accounting software (like QuickBooks or Xero) to automatically synchronize financial data, such as sales, expenses, and inventory values. This eliminates manual data entry and ensures accurate financial reporting.
The real cost of an asset that includes all the expenses incurred to get the asset ready for its intended use.
Inventory held to meet anticipated future demand, such as seasonal demand or planned promotions.
A set of protocols and tools that allows different software applications to communicate and exchange data with each other. Goods Order Inventory likely offers an API to enable integration with other business systems.
A chronological record of all actions and changes made within the Goods Order Inventory system. This feature provides transparency and accountability, allowing users to track who made what changes and when.
Automation refers to the process of using technology to perform tasks automatically, reducing the need for manual intervention. In QuickBooks integration, automation can streamline data entry, inventory management, and order processing.
Predefined sequences of actions that are automatically executed based on specific triggers or conditions. For example, an automated workflow could automatically generate a purchase order when inventory levels fall below a certain threshold.
The quantity of inventory that is available to promise to customers. It takes into account current inventory levels, planned production, and customer orders.
The average amount of inventory held over a specific period. It is calculated by adding the beginning and ending inventory values and dividing them by two.
An order that cannot be fulfilled immediately due to insufficient inventory. The order is held and fulfilled when the inventory becomes available.
The use of barcodes to identify and track inventory items. Goods Order Inventory likely supports barcode scanning for efficient receiving, picking, and shipping processes.
Batch processing involves processing a large number of transactions or data records at once, rather than individually. This can be more efficient for syncing large volumes of data between QuickBooks and other systems.
A refundable fee charged for beverage containers, returned when the container is brought back for recycling.
A comprehensive list of raw materials, components, and assemblies required to manufacture a product. It outlines the quantity of each item needed and the sequence of assembly.
Also known as safety stock, it is the extra inventory held to mitigate the risk of stockouts due to unexpected demand fluctuations or supply chain disruptions.
A large quantity of inventory, usually raw materials or components, purchased at a discounted price.
The use of data analysis tools and techniques to gain insights into business performance. Goods Order Inventory may offer BI features to help users identify trends, optimize inventory levels, and improve decision-making.
The cost of holding inventory, including storage costs, insurance, taxes, obsolescence, and the opportunity cost of capital.
Cloud-based integration refers to connecting QuickBooks Desktop or Online with other cloud-based applications. This allows for real-time data synchronization and access from anywhere with an internet connection.
Connecting Goods Order Inventory with a CRM system to synchronize customer data, order history, and communication logs. This provides a unified view of the customer and enables personalized service.
Inventory that is held by a retailer but owned by the supplier. The retailer only pays for the inventory when it is sold to a customer.
The direct costs attributable to the production of the goods sold by a company. Goods Order Inventory helps calculate COGS by tracking inventory costs and allocating them to sales orders.
Custom fields are user-defined fields that can be added to QuickBooks records (e.g., customers, items, invoices) to store additional information not included in the standard fields. Integration solutions can often map data to and from these custom fields.
A method of inventory auditing where a small portion of inventory is counted on a regular basis, rather than counting the entire inventory at once.
The portion of total inventory that is used to meet expected demand during a replenishment cycle.
A visual interface that provides a summary of key performance indicators (KPIs) and other important information. Goods Order Inventory likely offers a dashboard to help users monitor inventory levels, sales performance, and other critical metrics.
Data mapping is the process of defining how data fields in one system (e.g., Goods Order Inventory) correspond to data fields in another system (e.g., QuickBooks). This ensures that data is transferred accurately during integration.
Data synchronization is the process of keeping data consistent between two or more systems. In QuickBooks integration, this means ensuring that data in QuickBooks (e.g., inventory levels, customer information) is up-to-date with data in other applications.
Inventory that is obsolete, damaged, or has not been sold for a long period of time. It represents a loss for the company.
The process of predicting future demand for products or services. Accurate demand forecasting is crucial for effective inventory management.
A supply chain management technique where the retailer does not keep inventory in stock. Instead, when a customer places an order, the retailer forwards it to a third-party supplier who ships the product directly to the customer.
A mathematical formula used to determine the optimal order quantity that minimizes the total inventory costs, including ordering costs and carrying costs.
Connecting Goods Order Inventory with an e-commerce platform (like Shopify or WooCommerce) to automatically synchronize product information, inventory levels, and order data. This ensures accurate inventory tracking and efficient order fulfillment.
An integrated software system that manages all aspects of a business, including inventory management, accounting, human resources, and customer relationship management.
The electronic exchange of business documents (e.g., purchase orders, invoices) between trading partners. Goods Order Inventory may support EDI to streamline communication with suppliers and customers.
An inventory valuation method that assumes the first units purchased are the first units sold.
A feature that manages the compatibility of parts or products with specific models or configurations.
Completed products that are ready for sale to customers.
An inventory control system where orders are placed at fixed intervals, regardless of the inventory level.
The process of receiving, processing, and shipping customer orders.
Using historical data and statistical models to predict future demand. Goods Order Inventory may offer forecasting features to help users optimize inventory levels and avoid stockouts.
Goods Order Inventory is a software solution designed to manage inventory, orders, and manufacturing processes. It can be integrated with QuickBooks to streamline accounting and financial reporting.
The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.
The total expected demand for a component or material in a given period.
Refer to Carrying Costs.
Integration is the process of connecting two or more software systems so that they can exchange data and work together seamlessly. QuickBooks integration allows businesses to connect their accounting software with other applications, such as inventory management systems, eCommerce platforms, and CRM systems.
The degree to which the recorded inventory levels match the actual physical inventory levels.
A systematic review of inventory records and physical inventory to ensure accuracy and identify discrepancies.
The process of managing inventory levels to meet customer demand while minimizing inventory costs.
The process of planning, organizing, and controlling inventory to optimize its flow from procurement to sale.
The process of determining the optimal inventory levels to meet customer demand while minimizing inventory costs and risks.
A measure of how quickly inventory is sold and replaced over a specific period. It is calculated by dividing the cost of goods sold by the average inventory.
A document that lists the goods or services provided, the quantity, and the agreed-upon price. Goods Order Inventory allows users to generate and send invoices to customers.
Inventory that is currently being transported between locations.
An inventory management system that aims to minimize inventory levels by receiving materials and producing goods only when they are needed.
A visual signaling system used in JIT manufacturing to trigger the production or movement of materials.
The process of assembling multiple individual items into a single kit or package. Goods Order Inventory helps manage kitting by tracking the inventory levels of each component and calculating the cost of the kit.
A measurable value that demonstrates how effectively a company is achieving key business objectives. Goods Order Inventory likely provides KPIs related to inventory management, order processing, and sales performance.
An inventory valuation method that assumes the last units purchased are the first units sold.
The time it takes to receive an order after it has been placed.
The amount of demand that is expected to occur during the lead time.
The quantity of an item that is ordered or produced at one time.
The ability to track inventory items by lot number, which is a unique identifier assigned to a batch of products manufactured or received at the same time. Goods Order Inventory supports lot tracking for quality control and traceability purposes.
Manual data entry involves manually entering data into a system, which can be time-consuming and prone to errors. QuickBooks integration aims to reduce manual data entry by automating the transfer of data between systems.
Features for managing the production process, including BOM management, work order management, and production scheduling. Goods Order Inventory may offer manufacturing management capabilities for businesses that produce their own goods.
A computer-based inventory management system that calculates the quantity and timing of materials needed to meet production schedules.
The minimum quantity of an item that a supplier is willing to sell.
Managing inventory across multiple sales channels (e.g., e-commerce, retail, wholesale). Goods Order Inventory helps synchronize inventory levels across all channels to avoid overselling and stockouts.
The actual quantity of a component or material that needs to be ordered or produced after considering available inventory and scheduled receipts.
The state of being outdated or no longer useful. Inventory obsolescence can result in significant losses for a company.
A purchase order that has been placed but not yet received.
The time between placing an order and receiving it.
The process of receiving, processing, and fulfilling customer orders. Goods Order Inventory provides tools for managing orders from multiple channels, tracking order status, and generating shipping labels.
The cost associated with placing and receiving an order, including administrative costs, shipping costs, and inspection costs.
The practice of contracting out certain business functions, such as manufacturing or warehousing, to third-party providers.
An inventory management system that continuously tracks inventory levels.
The actual count of inventory on hand.
The process of selecting items from inventory (picking) and packaging them for shipment (packing). Goods Order Inventory provides tools for optimizing pick and pack processes, such as pick lists and packing slips.
POS integration connects QuickBooks with point-of-sale systems used in retail environments. This allows for automatic recording of sales transactions and inventory updates in QuickBooks.
A tool for planning, tracking, and managing all tasks, resources, and timelines for a project. (This should be added after product management).
The process of managing product information, including descriptions, pricing, and images. Goods Order Inventory provides tools for creating and managing product catalogs.
A document issued by a buyer to a seller, specifying the quantity, price, and delivery date of goods or services.
A price reduction offered by a supplier for purchasing a large quantity of an item.
QuickBooks Desktop is a locally installed version of QuickBooks accounting software. It offers a range of features for managing finances, inventory, and payroll.
QuickBooks Online is a cloud-based version of QuickBooks accounting software. It offers similar features to QuickBooks Desktop but can be accessed from anywhere with an internet connection.
Basic inputs used in the manufacturing process.
The ability to generate reports on various aspects of inventory management, order processing, and sales performance. Goods Order Inventory likely offers a variety of reports to help users track key metrics and identify trends.
The inventory level at which a new order should be placed to avoid stockouts.
A process for handling customer returns.
The process of handling returned goods from customers. Goods Order Inventory provides tools for tracking returns, issuing refunds, and restocking returned items.
Refer to Buffer Stock.
An order placed by a customer for goods or services. Goods Order Inventory allows users to create and manage sales orders.
An SDK is a set of tools and resources that developers can use to create applications that integrate with a specific platform or system. QuickBooks provides an SDK for developers to build custom integrations.
A unique identifier for each distinct item in inventory.
Connecting Goods Order Inventory with shipping carriers (e.g., UPS, FedEx, USPS) to automate the shipping process, generate shipping labels, and track shipments.
A situation where demand exceeds available inventory, resulting in lost sales and customer dissatisfaction.
The network of organizations and activities involved in the flow of goods and services from the supplier to the customer.
The process of planning, implementing, and controlling the flow of goods, services, and information from the supplier to the customer.
The outsourcing of logistics functions to a third-party provider.
Third-party integration refers to connecting QuickBooks with applications developed by companies other than Intuit (the maker of QuickBooks).
The time it takes for goods to be transported from one location to another.
A transaction is any financial event that affects a business’s accounting records. QuickBooks integration automates the recording of transactions, such as sales, purchases, and payments.
The cost of a single unit of inventory.
An inventory management system where the supplier is responsible for managing the inventory levels at the customer’s location.
The process of managing relationships with suppliers. Goods Order Inventory provides tools for tracking supplier performance, managing purchase orders, and communicating with vendors.
A method of inventory control that uses visual cues, such as colored bins or labels, to indicate inventory levels and trigger replenishment.
Refer to Quantity Discount.
A software system that manages warehouse operations, including receiving, storage, picking, packing, and shipping.
Inventory that is currently being processed or manufactured.
A document that authorizes the production of a specific quantity of a product. Goods Order Inventory may use work orders to manage the manufacturing process.
Book some time with one of our Product Experts to see Goods Order Inventory in action and to start your free trial.