Business & Invoicing Glossary
Essential definitions for financial metrics, payment terms, tax mechanisms, and invoicing concepts to help you navigate modern commerce.
Accounts Receivable (AR)
The total balance of money owed to a business for goods or services delivered but not yet paid for by customers. Tracked as an asset on the balance sheet.
Agile Sprint Billing
A billing model where software developers or agencies invoice clients on fixed 2-week intervals aligned with completed development sprints rather than open-ended hours.
Automated Dunning
The automated communication process of retrying failed customer credit card payments and sending structured email reminders for past-due invoices.
Billable Hours
The time spent directly on revenue-generating client deliverables that can be itemized and billed according to an agreed hourly rate.
Burn Rate
The rate at which a company spends its cash reserves before generating positive operating cash flow, typically measured on a monthly basis.
Client Portal
A secure, white-labeled web hub where clients can review outstanding invoices, make instant credit card payments, download historical receipts, and sign contracts.
Commercial Invoice
The official legal billing document issued by a seller to a buyer demanding payment for delivered goods or rendered services. Essential for tax and customs declaration.
Days Sales Outstanding (DSO)
A critical financial metric measuring the average number of days required to collect payment after an invoice is issued. Calculated as: (Accounts Receivable ÷ Total Sales) × 365.
Digital Business Card
An interactive digital identity profile accessible via NFC tap card, QR code, or short link that captures contact details and syncs directly to a CRM.
Due on Receipt
A payment term requiring the client to remit payment immediately upon receiving the invoice, with zero grace period.
Economic Nexus
A US tax principle established under South Dakota v. Wayfair (2018) stating that remote out-of-state sellers must collect and remit state sales tax once exceeding specific sales thresholds ($100K or 200 transactions).
Electronic Signature (E-Sign)
A legally recognized digital indication of an intent to agree to the terms of a contract, backed by cryptographic audit trails.
Net 30 / Net 60 Terms
Credit terms granting the client 30 or 60 calendar days from the invoice date to complete payment before the balance is classified as overdue.
NFC Tap Card
A physical plastic or metal smart card containing a Near Field Communication chip that instantly broadcasts a digital business profile to any smartphone with one tap.
Proforma Invoice
A preliminary quotation or estimated invoice sent to a buyer prior to work commencement or shipment to clarify scope, pricing, and customs value. Not a formal tax demand.
Progress Billing
An incremental invoicing method commonly used in construction and long-term consulting where invoices are issued upon completing defined milestone percentages.
Retainage / Retention
A percentage (usually 5%–10%) of each progress payment withheld by a client in construction or contracting until the entire project is completed satisfactorily.
Reverse Charge Mechanism
A European Union and GCC tax rule for B2B cross-border services where VAT liability shifts from the seller to the buyer, allowing the seller to issue an invoice with 0% VAT.
Withholding Tax (WHT)
An advance income tax deducted at source by a corporate client before remitting payment to a service vendor, commonly required in Nigeria (5%–10%) and other jurisdictions.
Working Capital
The difference between a company’s current assets (cash, accounts receivable) and current liabilities (accounts payable). Measures short-term liquidity.