Purchasing & Accounts Payable Glossary

E-procurement or electronic procurement is using technology to automate the end-to-end procurement process for a company. Read More

An accounts payable aging report is a valuable tool that provides a comprehensive overview of a company’s outstanding invoices and payment obligations. Read More

Accounts payable refers to the money a company owes to its suppliers for products and services received but not yet paid for. It represents a liability on the balance sheet, signaling that the business has an obligation to settle its debts. Read More

Accounts payable is a crucial part of your business process. It helps any business stay organized and efficient when paying for your vendors on time.Read More

Understanding Accounts Payable Turnover is crucial for several reasons. Firstly, it provides insights into a company’s payment practices and can reflect its financial health. Read More

The aging report is an essential part of the financial management system, providing valuable insights into the company's cash flow, credit management, and overall financial health. Read More

By using AP Automation, you can easily simplify tedious tasks within your organization, helping you save both time and money. Read More

APICS, now known as the Association for Supply Chain Management (ASCM), provides industry-recognized certifications that validate an individual’s expertise in supply chain and operations management. Read More

Approval Hierarchy is a structured system that outlines who within an organization has the authority to approve certain actions, in this case, procurement decisions. Read More

Biopharmaceuticals, also known as biological drugs or biologics, are medical drugs produced using biotechnology. Read More

Biotech outsourcing strategies can encompass a wide range of activities, from research and development (R&D) to manufacturing, clinical trials, regulatory compliance, and more. Read More

Biotech supply chain management is a specialized field that focuses on the planning, coordination, and execution of all activities involved in the procurement, production, and distribution of biotechnological products. Read More

Undoubtedly, your procurement department always looks for ways to streamline your purchasing processes, reduce costs, and improve efficiency. One tool that can help you achieve this goal is by using a Blanket Purchase Order (BPO). Read More

Budgetary control is a fundamental concept in financial management, particularly in the fields of procurement and accounts payable. Read More

Bulk purchasing is a procurement strategy that involves acquiring goods or services in large quantities. Read More

The cash burn rate is typically calculated on a monthly or quarterly basis. It is determined by subtracting the cash at the end of the period from the cash at the beginning of the period. Read More

Category management is a key component of strategic sourcing and is often used in conjunction with other procurement strategies to maximize value and reduce costs. Read More

Centralized procurement is the process of centrally managing the purchasing for distributed locations. In a centralized procurement model, there is one procurement team for all locations. Read More

Clinical trial procurement is a complex process that involves a range of challenges. Read More

Cold chain logistics is a term that refers to a temperature-controlled supply chain. This process involves an uninterrupted series of refrigerated production, storage, and distribution activities, along with the associated equipment and logistics, which maintain a desired low-temperature range. Read More

Contract Manufacturing Organizations (CMOs) play a crucial role in the manufacturing industry, particularly in sectors such as pharmaceuticals, biotechnology, and electronics. Read More

Cooperative purchasing can be defined as a procurement strategy in which multiple organizations join forces to leverage their collective buying power. Read More

Cost Avoidance is a preventive measure that involves identifying potential costs that a business may incur in the future and taking steps to avoid them. Read More

Cost savings refers to the amount a company saves due to higher efficiency or better purchasing costs. The finance team always measures cost savings as a reduction in the set budget. If the cost reduction doesn’t impact the budget, it can’t be considered cost savings. Read More

Direct purchasing is a procurement strategy that involves an organization buying goods or services directly from the manufacturer or service provider. Read More

Direct spend is a procurement term that refers to the costs associated with the production of goods and services. Read More

Distribution management is a critical component of any organization focusing on the movement of goods from manufacturers to consumers. Read More

E-invoicing or electronic invoice is the process of digitizing the supplier invoicing process. Read More

E-procurement or electronic procurement is using technology to automate the end-to-end procurement process for a company. Read More

The concept of early payment discount is rooted in the principle of time value of money, which states that a dollar today is worth more than a dollar tomorrow. Read More

Ethical purchasing, also known as ethical sourcing or ethical procurement, is a significant aspect of corporate social responsibility (CSR). Read More

Expense management is a crucial part of your business. No doubt that managing your expenses can be a time-consuming and even complex task when done manually. Read More

The FPDS is a comprehensive database maintained by the General Services Administration (GSA), an executive agency that captures all federal procurement activities. Read More

Global sourcing is a strategic procurement approach that involves seeking goods and services beyond one’s national borders. Read More

Global supply chain management refers to the coordinated and efficient process of sourcing, producing, and delivering products and services across international borders. Read More

Good Manufacturing Practice (GMP) is a system for ensuring that products are consistently produced and controlled according to quality standards. Read More

Green procurement, also known as sustainable procurement, involves the integration of environmental considerations into the procurement process.Read More

The healthcare supply chain encompasses all the steps involved in providing patients with the necessary products and services they require for treatment. Read More

Companies that manage Indirect procurement well save anywhere between 5-8% of their manual Spend. Read More

Indirect purchasing is a term used in the field of procurement and accounts payable process. It refers to the acquisition of goods and services that are not directly incorporated into a product being manufactured. Read More

Indirect Spend refers to the purchasing of goods and services that are not directly incorporated into a product being manufactured. Read More

Inventory management is the process of ordering, tracking, and managing disbursements of the items for which a company manages stock. Read More

While managing invoices can quickly become overwhelming for your business due to numerous daily transactions, using the right tools and strategies can help your business streamline its invoice processing operation. Thus, helping you reduce the risk of errors and delays. Read More

Late payment fees, also known as delinquency fees, are charges levied by a lender or service provider when a borrower or customer fails to pay a bill or loan installment on time. Read More

Lead time reduction refers to the strategies and practices implemented to decrease the total time taken from the initiation of a process to its completion. Read More

Logistics management refers to the planning, implementation, and control of the flow and storage of goods, services, and related information. Read More

Material procurement is the process of sourcing, purchasing, and managing raw materials or finished goods required for production or operations. Read More

Maverick Spend, also known as rogue or uncontrolled spend, is a term used in procurement to describe spending that happens outside of established procurement policies and procedures. Read More

MRO procurement refers to the acquisition of materials, spare parts, and services required for the maintenance and repair of machinery, equipment, and facilities. Read More

Notes payable are written promissory notes to pay a specified amount of money at a future date. This formal agreement typically involves two parties: the lender and the borrower.Read More

An order acknowledgment is a confirmation by the vendor that they have received the buyer’s purchase order. Read More

Having payment terms that work for your company and suppliers is essential to a successful procurement process. But how do you ensure that your payment terms are fair and effective? From setting goals with suppliers to using early payment options, there are many things to consider when setting procurement payment terms. Read More

Procure to pay is the end-to-end process a company follows to purchase, receive and pay the vendor for the products and services. Read More

Procurement automation refers to the use of technology to streamline procurement activities and processes. Read More

Procurement Contract management involves several key elements, each of which plays a critical role in ensuring the effectiveness of the process. These elements include contract creation, negotiation, execution, compliance, amendment, audit, and renewal. Read More

A procurement dashboard offers several benefits for businesses. Firstly, it provides a clear and concise view of key procurement metrics, allowing businesses to quickly assess the performance of their procurement processes. Read More

Procurement Ethics refers to the moral principles and standards that guide the behavior and decisions of those involved in the procurement process. Read More

Procurement management involves the process of acquiring goods and services for an organization. Read More

The procurement process is a critical business operation that involves the acquisition of goods and services from external sources. Read More

The procurement specialist serves as the backbone of the purchasing process in an organization. Their role encompasses a variety of tasks that require a blend of strategic thinking and operational execution. Read More

In this resource, let's dive deeper into how purchase order works, the correct formatting of purchase orders, and their benefits to your company. With this knowledge, we're confident you'll be on your way to easily mastering the art of ordering for your business! Read More

A purchase order (PO) number is a unique identifier assigned to a purchase order document. This is used by businesses and vendors to track orders effectively. This ensures that all parties involved in a purchase are aware of the details of the transaction. Read More

A purchase order requisition is a document an employee uses to request a purchase, product, or service. Read More

Having purchase order terms and conditions can greatly impact the success rate of your transaction. Aside from that, it is legally binding as well. But, have you ever wondered what exactly purchase order terms and conditions are and why you should include them in your purchase order? Read More

Purchasing is the activity of procuring products or services by a buyer from a supplier. The simplest example of purchasing is the day-to-day purchasing done by a company. For example, you are purchasing a laptop from CDW or Amazon.com. Read More

Understanding procurement and its related terms is essential for any business, regardless of its size. It can help in making informed decisions, reducing costs, improving efficiency, and ultimately, driving business growth. Read More

The purchasing cycle, also known as the procurement cycle, is a fundamental concept in the field of procurement and accounts payable. Read More

Your company’s purchasing department is one of the most important departments in your organization.It plays a vital role in ensuring the success of you and your finance team through sourcing and acquiring your required goods. Read More

Purchasing management, a critical component of supply chain management, refers to the process of sourcing, ordering, and overseeing the use of goods and services within an organization. Read More

Purchasing managers in your company are responsible for finding and sourcing materials, supplies, equipment, and services at lowers costs without compromising quality or delivery times. Read More

A Request for Quotation or quote is the process of requesting a vendor to quote the price for a product or service that you are looking to purchase. Read More

Requisition management, in simple terms, is the process of managing requests for the purchase of goods or services within an organization.Read More

A resilient supply chain is characterized by its ability to adapt to unforeseen disruptions, whether they arise from natural disasters, geopolitical tensions, or economic shifts. Read More

Risk management in procurement is a critical aspect of any business operation that involves the sourcing and purchasing of goods and services. Read More

The role of sourcing extends beyond merely procuring materials; it is integral to forming a resilient and responsive supply chain. Strategic sourcing enables organizations to mitigate risks, enhance innovation, and respond rapidly to market changes. Read More

A sourcing strategy refers to a plan that formalizes the way information is gathered and used so that an organization can utilize its consolidated purchasing power to find the best possible values in the marketplace. Read More

Spending is a crucial factor that can affect the profit of your company. Although, there are still a few organizations that find themselves struggling in this area. We believe that is something you would not like for your business. Read More

Spend Under Management is a key performance indicator (KPI) for procurement. It provides a measure of how effectively a company is managing its spend. Read More

Spend visibility is the ability to track corporate spending in a detailed and categorized manner. Read More

Strategic sourcing is absolutely an invaluable tool used by companies to acquire resources in the most cost-effective and efficient manner. Using strategic sourcing paired with digital business networks, companies are able to create seamless experiences from start to finish of their business operations. Read More

Supplier consolidation, also known as vendor consolidation, is a procurement strategy where a company reduces its number of suppliers.Read More

Supplier management, also known as supplier relationship management (SRM), is a comprehensive approach to managing an enterprise’s interactions with the organizations that supply the goods and services it uses. Read More

Supplier performance metrics are a set of quantitative and qualitative measures used to assess a supplier's performance. Read More

Supplier risk, also known as vendor risk or supply chain risk, refers to the potential negative impacts that can arise from a company's reliance on its suppliers. Read More

Supplier Statement Reconciliation is an essential process in the financial management of a business. It involves comparing a supplier’s statement of account to an organization’s internal records to identify any discrepancies and ensure that all transactions are accurate and complete. Read More

A Supply Chain Analyst acts as a key facilitator in the logistics process, primarily focusing on the flow of goods and services from suppliers to customers. Read More

Supply chain analytics involves the systematic collection and analysis of data across various stages of the modern supply chain. Read More

Supply chain management (SCM) encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. Read More

Supply chain finance, also known as supplier finance or reverse factoring, is a set of solutions that optimizes cash flow by allowing businesses to lengthen their payment terms to their suppliers while providing the option for their suppliers to get paid early. Read More

Supply chain optimization involves the integration of various processes, technologies, and strategies to enhance the overall performance of a supply chain. Read More

The role of supply chain planning is multifaceted, impacting various aspects of a business such as inventory management, production planning, and logistics. Read More

A supply chain strategy is a structured plan that outlines how an organization will manage its supply chain operations to maximize efficiency and minimize costs while maintaining customer satisfaction. Read More

The tender process is a structured approach through which organizations, especially in the public sector, acquire goods and services. Read More

A three-way match is a process of matching three documents to ensure that you pay an invoice that matches what you ordered. Read More

A two-way match is a process of matching the invoice with the purchase order to ensure the invoice is ready for payment. Read More

Vendor credits are an integral part of the accounts payable process. They help in maintaining accurate financial records and ensuring that the company's cash flow is managed efficiently. Read More

Vendor evaluation is a critical process in the procurement and accounts payable process. It involves assessing and monitoring the performance and quality of a vendor’s goods or services. Read More

A vendor invoice is more than just a bill. It is a legal document that provides a detailed account of the transaction between the vendor and the buyer. Read More

Vendor Management is an essential element in maintaining and growing customer loyalty while minimizing any risks and costs associated with managing vendors. Vendor Management also serves as an effective way to ensure that your business gets the best services while securing low costs and maintaining good relationships with your vendors. Read More