Guides · Basics
Accounting terms every Malaysian SME should know
A plain-English glossary of the accounting terms Malaysian small businesses actually use — chart of accounts, general ledger, receivables, trial balance, P&L, SST, e-Invoice and more.
Everyday documents
- Quotation
- A price offer sent before a sale. It's a proposal, not a request for payment.
- Invoice
- A request for payment issued after you agree to supply. It's the tax document and creates a receivable.
- Receipt
- Proof that payment was received. Issued after the customer pays.
- Credit note
- A document that reduces or cancels an invoice, e.g. for a return or a correction.
Ledgers & entries
- Chart of accounts
- The organised list of every account your business uses to record money (sales, expenses, bank, assets, and so on).
- General ledger
- The master record where every transaction is posted, grouped by account.
- Journal entry
- A single recorded transaction. In double-entry, its debits and credits must be equal.
- Debit & credit
- The two sides of every entry. Total debits must equal total credits for the books to balance.
- Accounts receivable (AR)
- Money your customers owe you for invoices not yet paid.
- Accounts payable (AP)
- Money you owe suppliers for bills not yet paid.
- Bank reconciliation
- Matching your books to your bank statement so the two agree.
Financial statements
- Trial balance
- A check that total debits equal total credits across all accounts before you produce statements.
- Profit & loss (income statement)
- Revenue minus expenses over a period. Shows whether you made a profit.
- Balance sheet
- A snapshot of what you own (assets), owe (liabilities) and the difference (equity) at a point in time.
- Cash flow
- The movement of money in and out of the business over a period.
- Cost of goods sold (COGS)
- The direct cost of the goods or services you sold — stock, materials, direct labour.
- Gross vs net profit
- Gross profit is revenue minus COGS; net profit is what's left after all expenses.
- Accruals
- Recording income and expenses when they're earned or incurred, not only when cash moves.
Malaysian tax & compliance
- SST
- Sales & Service Tax, Malaysia's consumption tax, administered by RMCD (Customs).
- e-Invoice / MyInvois
- LHDN's electronic invoicing system. Invoices are submitted and validated with a unique ID.
- Financial year
- The 12-month period your accounts cover. Records must generally be kept seven years.
These terms, handled for you
Orbit Finance keeps the ledger, statements and tax records in order automatically. One-time RM 100.00.