Glossary of Terms
A|B|C|D|E|F|G|H|I|J|K|L|M|N|O|P|Q|R|S|T|U|V|W|XYZ
A
ACH
Automated Clearing House.
AP
Accounts Payable. A strategic, value-added accounting function that performs the primary non-payroll disbursement functions of an organisation.
APACS
Association for Payment Clearing Services. Now the UK Payments Administration. A service company providing people, facilities, and expertise to the UK payments industry.
AR
Accounts Receivable. Forms part of the finance department, dealing with the billing and collection of funds from customers who owe the company money.
B
BACS
Bankers Automated Clearing Services. Scheme for the electronic processing of financial transactions.
BBA
British Bankers Association. The leading association for the UK banking and financial services sector.
C
CBI
Confederation of British Industry. The CBI is a lobbying organisation whose mission is to help create and sustain the conditions in which businesses in the United Kingdom can compete and prosper for the benefit of all.
CIPS
Chartered Institute of Purchasing and Supply. CIPS is an international organisation, based in the UK, serving the purchasing and supply profession. Dedicated to promoting good practice, CIPS provides a wide range of services for the benefit of members and the wider business community.
Contract Management
Monitoring vendor’s to ensure they are complying with the terms of the contract, including service delivery management, relationship management, and contract administration.
CSC / CVC
Card Security Code / Card Verification Code. Security feature for credit and debit card transactions, giving increased protection against credit card fraud.
Also sometimes referred to as Card Verification Value (CVV or CV2), Card Verification Value Code (CVVC), Verification Code (V-Code or V Code), or Card Code Verification (CCV).
CSR
Corporate Social Responsibility.
D
Days Payables Outstanding (DPO)
Calculates the total time it takes a business to pay back its creditors =
Accounts Payable x Number of Days
Cost of Sales
Days Sales Outstanding (DSO)
A company’s average number of days to collect from debtors =
Accounts Receivables x Number of Days
Total Credit Sales
E
eAuction
Companies bid against each other with open bids to win the right to provide goods or services to the buyer. Often used by public sector bodies.
EDI
Electronic Data Interchange. Enabling the exchange of electronic documents.
eInvoicing
The electronic transfer of invoice information.
EIPP
Electronic Invoice Presentment and Payment. The process by which companies present invoices and make payments to one another through the internet.
eProcurement
Electronic methods used in every stage of purchasing, from the identification of a requirement through to the payment of goods. May also include contract management.
ERP
Enterprise Resource Planning. A multi-module software application providing solutions across the business including finance, procurement, inventory, distribution, HR, and sales.
eWallet
Also known as a digital wallet. A method to store personal information securely.
F
Fixed capital
Assets required for the running of a business but that are not used up in the production of goods or services. Examples include buildings/offices, staff, equipment, vehicles etc.
FSB
Federation of small businesses. The FSB is the UK's largest campaigning pressure group promoting and protecting the interests of the self-employed and owners of small firms.
G
(The) Gershon Review
Sir Peter Gershon's review of the public sector, identifying where efficiencies could be made.
GL
General Ledger. A central accounting record of an organisation summarising changes in financial position as transactions are posted during an accounting period. Used to identify, track, and measure an organisation’s budget.
GPC
Government Procurement Card.
GRN
Goods received note.
H
I
ICM
Institute of Credit Management. The largest professional credit management organisation in Europe. It represents the credit profession across trade, consumer, and export credit, as well as in related activities such as collections, credit reporting, credit insurance, and insolvency.
Indirect Goods
Goods and services that a company buys but does not result in finished goods. Comprised of ORM (Operating Resource Management) and MRO (Maintenance, Repair and Operations).
Invoice
A document issued from a vendor for payment, detailing the goods or services the vendor has provided to the buyer, the cost(s), and any VAT due. The document may be called a ‘Sales Invoice’, from the point of view of the vendor, or a ‘Purchase Invoice’ by the buyer.
J
K
KYC
Validation and credit checking of a customer’s business.
L
Level 1 Vendor
Visa/MasterCard/Amex capable vendor. Card Transactions are at summary level inclusive of VAT/Tax.
Level 2 Vendor
Visa/MasterCard/Amex capable vendor. Card Transactions are at summary level with customer reference (purchase card only) and VAT/Tax totals.
Level 3 Vendor
Visa/MasterCard/Amex Purchase Card accepting vendor who is VAT/Tax capable delivering transaction line item details and VAT/Tax totals.
Line item detail
Detailed information regarding a transaction, incorporating item by item descriptions.
Line Item Details:
Product / Service ID (item ID)
Product / Service description
Quantity
Unit of measure
Item amount
VAT / Tax
Budget / GL code (via Customer Reference field)
Liquidity
The ability to convert an asset to cash quickly. The degree to which a Business asset or security can be bought or sold in the market without affecting the asset's price.
Lodge card
A lodge card has been designed to be used for business travel purchases, all transactions are consolidated into a single account for ease of reconciliation.
Lodge card travel data sample follows:
Lodge card travellers corporate data sample as follows:
Traveller’s employee number
Business unit cost centre
Project number
Order number
Accounting unit reference
Internal account
M
Master merchant
Where a company, such as Invapay, acts as an intermediary providing the buyer with range of procurement options to connect with potential vendors through an internet portal, and providing a range of settlement solutions including credit and purchase cards.
Matching
The process of matching purchase orders with receipts or goods received notes and invoices.
Maverick spend
The process whereby requestors (those who are creating a request for an item or service that will be turned into an order for a vendor) buy items or services that are outside the preferred process or system.
MRO
Maintenance, Repair and Operations (also see indirect goods). Includes materials such as electrical supplies, replacement parts, fittings etc.
MSC
Merchant Service Charge. A fee charged by the acquiring bank to the merchant for a Credit Card transaction processing. Fees vary based on individual circumstances.
N
NAPCP
National Association of Purchasing Card Professionals, a membership-based organisation created for the advancement of Purchasing Card professionals and practices.
O
OTOVs
One-time-only vendors. A term to describe vendors that businesses deal with only once.
P
P-Card
Purchasing / Procurement card. Issued by a company to employees for making business purchases.
PO
Purchase Order. A document issued by a buyer to a seller for the purchase of goods or services.
Procure to Pay
The purchasing cycle from the procurement of goods or services, through to payment.
Procurement
The acquisition of goods or services.
Profit
The income of a business minus costs.
Prompt Payment Code
An initiative devised by the Government with the Institute of Credit Management (ICM) to tackle the issue of late payments, particularly crucial to small businesses.
Purchase to Pay
The purchasing cycle from the procurement of goods or services, through to payment. Also known as P2P.
Q
R
Revenue
Total amount received by a company for goods or services.
RFQ
Request for Quotation from potential vendors.
ROI
Return on Investment.
S
SLA
Service Level Agreement.
SME’s
Small and Medium sized Enterprises. The headcount for these businesses will be less than 250.
SOX
Sarbanes-Oxley Act. A US Act which set out regulations and legislative audit requirements for public companies.
T
Three-Way Match Process (3 Way Match)
The process of matching a purchase order with a receipt/goods received note and invoice, before processing payment.
Two-Way Match Process (2 Way Match)
The process of matching a purchase order with an invoice before processing payment.
U
V
VAT
Value Added Tax. A tax that's charged on most goods and services that VAT-registered businesses provide in the UK. There are three rates of VAT depending on the goods or services the business provides.
Vendor
Supplier of goods or services.
Vendor Payments
Payments that buyers must make to vendors for goods or services provided.
W
XYZ