What is the purpose of this Procurement Glossary?

This glossary serves as a comprehensive resource for supply chain and procurement terminologies. It is designed by professionals from a leading software company to help users understand key industry terms and concepts relevant to their roles.

What types of terms can I expect to find in this glossary?

You can find a wide array of terms covering core procurement and supply chain definitions, financial accounting concepts like 'Accounts Payable' and 'Absorption Costing', and strategic organizational terms such as 'Absorptive Capacity'. It also includes process-oriented terms like 'Accounts Payable Automation'.

Does the glossary include terms related to process automation?

Yes, the glossary features terms like 'Accounts Payable Automation', which explains the utilization of modern technology to streamline financial calculations and minimize human involvement. This highlights the inclusion of concepts related to efficiency and technological integration in procurement.

Procurement & Supply Chain Glossary: Essential Terms

Absorption CostingAbsorption costing is a model of accounting cost that necessitates the total cost of achieving the end product from production processes.

Absorptive CapacityAbsorptive capacity refers to criterion an enterprise incorporates to enforce current trends in improving the overall organizational performance.

AcceptabilityAcceptability is the assessment of an organizational strategy to determine its efficiency in satisfying the needs and requirements of the shareholders.

Acceptance CriteriaAcceptance criteria entails requirements that govern the declaration of completion of a project by a client.

Accounts PayableAccounts payable is a liability account that indicates the monetary value a firm owes its suppliers regarding business expenses, such as costs for acquiring production raw materials.

Accounts Payable AutomationAccounts payable automation refers to the utilization of modern technology in performing account payable calculations with minimal human involvement, eliminating minor errors in the process.

Accounts ReceivableAccounts receivable is the money billed to a company for products and services, but the customers still hold the money.

AcquisitionAcquisition is the act of acquiring ownership of another enterprise

Acquisition CostAcquisition cost entails an enterprise's expenses to purchase assets, such as shipping costs.

Active External IntegrationActive external integration refers to collaboration of supply chain components to coordinate the activities.

Active Internal IntegrationActive internal integration is the approach of inter-functional collaboration to monitor an organization's functional areas.

ActivitiesActivities refers to things performed regarding company operations.

Activity-Based CostingActivity-based costing is a cost accounting system that directs the allocation of overheads and subsidiary costs to various goods and services.

Ad-Hoc PurchaseAd-hoc purchase is an incident when a product is obtained for one-use off.

AdaptabilityAdaptability refers to adjustment of supply chain processes to adapt to changes.

Added ValueAdded Value refers to additional features that are availing to the customers for increased sales.

Addressability Of SpendAddressability of spend refers to spend impacted by control of the functions of Procurement.

Advance PaymentAdvance payment refers to amount paid before receiving a good or service.

Advanced Quality PlanningAdvanced quality planning refers to designing products and their production processes for quality purposes.

After-the-fact purchase orderAfter-the-fact purchase order include the procurement services monitor purchase orders; therefore, after-the-fact purchase orders occur when a purchasing demand is made before the procurement department releases the order.

Agile ProcurementAgile Procurement entails a flexible and advanced procurement model characterized by new ideas and new approaches; for example, speed and time are key factors during the sourcing process.

Agile Spend ManagementAgile spend management is a concept organizations apply to minimize the expenses of doing business through the application of techniques of transparency in data management and accurate-time data scrutiny.

AgilityAgility is ability to adjust quickly to changes

AmortizationAmortization is an act of setting cost for assets

Annual PlanningAnnual planning cycle refers to the procedure of outlining the business roadmap for an organization and its employees.

AppraisalsAppraisals refers to valuation of products to set price.

Approved Supplier ListApproved supplier list is an act of assigning a task to qualified suppliers.

As a ServiceAs a service refers to a shift from traditional possession methods to modern ownership models of providing services.

As-is analysisAs-is analysis is the valuation of current business procedures.

AssetsAssets entails all the items owned by a company.

Available To PromiseAvailable to promise is the provision of information about delivery dates by a business to its clients.

Average Rate of ReturnAverage rate of return is the average annual amount of cash flow for investment.