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What is Absorption Costing? Definition In business, there are many different ways to calculate the cost of goods sold (COGS). One method is called absorption costing, and it’s important to understand how it works in order to make sound business decisions. Absorption costing takes into account all of the costs associated with manufacturing a product, […]

What is Activity-Based Costing (ABC)? Definition Activity-based costing (ABC) is a costing method that assigns indirect costs to products based on the activities that are associated with producing those products. In traditional costing, indirect costs are allocated to products based on a single allocation base, such as machine hours or direct labor hours. However, this […]

What is After-The-Fact Purchase Order? Definition A purchase order (PO) is a document that authorizes a buyer to purchase products or services from a seller. After-the-fact purchase orders are created after the goods or services have been received or the work has been completed. While this may seem like an unnecessary step, after-the-fact purchase orders […]

What is Agile Procurement? Definition Agile procurement is a new approach to buying that is gaining popularity in today’s business world. Unlike traditional procurement, which can be slow and bureaucratic, agile procurement is designed to be fast and flexible. So what is agile procurement? And how can it benefit your business? In this blog post, […]

What is Aggregation? Definition If you’ve been involved in digital marketing for any length of time, you’ve probably heard the term “aggregation” thrown around. But what is aggregation, really? Simply put, aggregation is the process of collecting data from multiple sources and then consolidating that data into a single format or database. This data can […]

What is a Back Order? Definition In business, a backorder is defined as an order for goods or services that cannot be immediately fulfilled because inventory is not readily available. Backorders can occur for a variety of reasons. For example, a customer may order an item that is out of stock, or a supplier may […]

What is an Authorised Officer? Definition In short, an Authorised Officer is a role created by the Australian Border Force (ABF) to help with the management and movement of people and goods across Australia’s borders. The Authorised Officer role was introduced on 1 July 2015 as part of the ABF’s establishment. The ABF is a […]

What is a Bill Of Lading? Definition A bill of lading is a document that is used to acknowledge the receipt of goods. The bill of lading contains the name of the shipper, the consignee, a description of the goods, and the date of shipment. The bill of lading is an important document because it […]

What is a Bottleneck Item? Definition You’ve probably heard the term “bottleneck item” before, but what does it actually mean? A bottleneck item is a product or component that is essential to a manufacturing process but is in short supply. This can cause delays and disruptions in the manufacturing process, which can lead to increased […]

What is a Brokerage? Definition In business, the term “brokerage” can refer to several different things. Most commonly, it is used to describe a firm that provides intermediary services for buyers and sellers. A brokerage typically takes a commission in exchange for its services. Other businesses may use the term “brokerage” to refer to their […]

What is a Blanket Purchase Order? Definition A blanket purchase order (BPO) is a standing purchase order issued by a buyer to a supplier, authorizing the supplier to fill orders for specified goods or services over a set period of time. BPOs are often used in business-to-business (B2B) transactions and can be an efficient way […]

What is a Business Unit? Definition A business unit is a division of a company that is responsible for its own profit and loss. A business unit can be as small as a single product or service, or it can be an entire company. The term “business unit” is most often used in large corporations […]

What is Capital Expenditure (Capex)? Definition Capital expenditure (capex for short) is a term that you’ll likely hear in business settings, especially in accounting and finance. But what exactly is it? In the most basic sense, capital expenditure refers to the money that a company spends to acquire or improve its long-term assets. These long-term […]

What is Centralized Procurement? Definition Centralized procurement is the process of streamlining the purchasing function for an organization. It typically involves creating a centralized team or department responsible for all aspects of procurement, from vendor management to contract negotiation. The main goal of centralized procurement is to improve efficiency and optimize spending by consolidating the […]

What is a Cash Flow Statement? Definition The cash flow statement is one of the most important financial statements for a business. It shows how much cash is coming in and going out of the company, and it can be used to make important decisions about how to allocate resources. If you’re not familiar with […]

What is a Center Of Excellence? Definition A Center of Excellence (CoE) is a specific group within an organization that is responsible for providing leadership, best practices, research, support, and/or training for a defined area. The concept of a CoE has evolved over time, and there are now multiple types of CoEs with different purposes. […]

What is a Circular Economy? Definition If you’ve been keeping up with the latest trends in sustainability, you’ve probably come across the term “circular economy.” But what is a circular economy? In short, a circular economy is an economic system in which resources are used and reused in such a way that they remain in […]

What is a Change Order? Definition A “change order” is a document that is created during the execution of a construction contract, which modifies the terms of said contract. Change orders are used to record and authorize changes that are requested by the owner, architect, or general contractor during the project. This could be anything […]

What is Commissioning? Definition Commissioning is the process of certifying that a building or system performs according to the operational requirements set forth in its design. The commissioning process begins during design, continues through construction, and extends through the warranty period. The commissioning process is important because it verifies that the systems in a building […]

What is Competitive Dialogue? Definition The term “competitive dialogue” (CD) is used in a variety of contexts, most notably in the European Union procurement process. CD is a two-way conversation between a contracting authority and economic operators (i.e., businesses) during which they discuss the needs of the authority and the solutions that the operator could […]

What is a Commodity Strategy? Definition A commodity strategy is a risk management plan that seeks to reduce the price volatility of one or more raw materials used in production. The goal is to ensure that the company has a reliable and consistent supply of these materials, at a price that is predictable and manageable. […]

What is Common Procurement Vocabulary (CPV)? Definition CPV is an acronym for Common Procurement Vocabulary. It is a multi-lingual thesaurus used by European public procurement authorities when drawing up contract notices and award criteria in order to facilitate cross-border competition. The CPV was first published in 2003 and has been revised several times since then. […]

What is Consignment? Definition Chances are, you’ve come across the term “consignment” before but might not have been entirely sure what it meant. Simply put, consignment is the process of selling goods on behalf of another party. In this blog post, we will explore the concept of consignment in more detail. We will also discuss […]

What is Contract Value? Definition Contract value is a term that gets thrown around a lot in business, but what does it actually mean? In short, contract value is the total value of a contract over its lifespan. This can include the cost of goods or services, any associated taxes, and any other fees that […]

What is Contract Award Notice? Definition A Contract Award Notice is a formal announcement made by a contracting authority to inform interested suppliers that a contract has been awarded. The notice includes information on the successful bidder, the value of the contract, and the start and end date of the contract. The main purpose of […]

What is a Cost Center? Definition A cost center is a department within a company that does not generate revenue but is instead responsible for the company’s expenses. The term “cost center” is used in managerial accounting to describe a part of the business where costs are incurred. Cost centers are often grouped together so […]

What are Daily Rates? Definition A daily rate is a unit of measure that is applied to various types of services. The term can be used in different ways, depending on the context. For example, a daily rate may refer to the price of a rental car, or it may be used to calculate the […]

What is a Credit Rating? Definition A credit rating is a statistical evaluation of a person’s or organization’s creditworthiness. A credit rating represent the credit risk of a borrower, which is the likelihood that the borrower will default on a loan. Credit ratings are important because they are one factor that lenders use to determine […]

What is Data Enrichment? Definition Data enrichment is the process of adding value to data. It generally refers to the practice of incorporating additional data sources into your existing data set in order to improve its accuracy or completeness. There are a number of different ways to go about data enrichment, but the most common […]

What is Decentralized Procurement? Definition Decentralized procurement is a type of business process where the authority to purchase goods and services is decentralized from a central department or location. This type of procurement allows businesses to have more control over their spending and can help them save money. Decentralized procurement can be a good solution […]

What is Demand Management? Definition As the term suggests, demand management is all about managing demand. In business, this usually refers to the process of planning and controlling the level of customer demand for a company’s products or services. But what does that actually entail? What are the different aspects of demand management? And how […]

What is DBFM (Design, Build, Finance And Manage)? Definition DBFM stands for Design, Build, Finance and Manage. It is a type of procurement process whereby the public sector body (such as a local authority) contracts a single entity to design, finance, build and operate a particular project. The DBFM model is typically used for large-scale […]

What is Direct Procurement? Definition Do you know what direct procurement is? If not, you’re not alone. This type of procurement is often misunderstood, even by those who work in the supply chain industry. In short, direct procurement is the process of procuring goods or services that will be used directly in the production of […]

What is Ebitda? Definition Ebitda is a term that you’ve probably seen thrown around a lot but may not actually know what it stands for. This blog post will give you a comprehensive definition of what Ebitda is, as well as how it’s used in the business world. Ebitda stands for “earnings before interest, taxes, […]

What is a Dynamic Purchasing System (DPS)? Definition A dynamic purchasing system (DPS) is an electronic platform that allows suppliers to compete for public sector contracts. This means that instead of awarding a contract to a single supplier, the buyer procures from a pool of pre-approved suppliers. The advantage of this system is that it […]

What is Economic Order Quantity? Definition Economic order quantity (EOQ) is the number of units of a good that a company should order at one time to minimize the cost of both inventory and ordering. EOQ is determined by taking into account the following factors: * The demand for the good * The cost of […]

What are Deliverables in Business? Definition In business, the term “deliverables” refers to products or services that a company provides to its clients. A deliverable can be anything from a physical product to a digital service. In this article, we will explore the definition of deliverables in business, as well as some examples of common […]

What is an EINA (Equalities Impacts Needs Assessment)? Definition The term “Equalities Impacts Needs Assessment” (EINA) is used to describe the process of considering the needs of all individuals in society, including those who experience discrimination or disadvantage. An EINA is usually carried out as part of a larger project or policy initiative, in order […]

What is Enterprise Resource Planning (Erp)? Definition Enterprise resource planning (ERP) is defined as a process by which a company (often a manufacturer or distributor) manages and integrates the important parts of its business. This includes everything from product planning and development to manufacturing, marketing, and sales. An ERP system is usually composed of multiple […]

What is E-procurement? Definition E-procurement, also known as electronic procurement, is the use of electronic means to buy goods and services. This can include the use of online marketplaces, online catalogs, and electronic request for proposals (RFPs). E-procurement is often used in the business-to-business (B2B) space as a way for companies to streamline their purchasing […]

What is a European Single Procurement Document (ESPD)? Definition The European Single Procurement Document (ESPD) is a self-declaration document used in public procurement in the European Union. The ESPD replaces the need for bidders to submit multiple declarations, attestations or certificates when participating in a public procurement procedure. It is an electronic document which is […]

What is Fair Market Value? Definition You’ve probably heard the term “fair market value” before, but what does it actually mean? In short, fair market value is the price that a willing and informed buyer would pay for an asset, after taking into account all relevant factors. While that may sound straightforward enough, there are […]

What are External Stakeholders? Definition If you’re new to the business world, you may have come across the term “external stakeholder” and wondered what it meant. In short, external stakeholders are people or organizations that are affected by the decisions and actions of a company but are not directly involved in its day-to-day operations. They […]

What is Exigency? Definition In a business context, exigency is defined as a situation that requires immediate action or attention. An exigent circumstance is one in which delay would result in irreparable harm or damage. In other words, if something needs to be done urgently, it’s considered an exigent matter. This can apply to both […]

What are Finished Goods? Definition A finished good is a product that is ready for sale and consumption. In other words, it is a good that has been through the entire manufacturing process and is now complete. However, the term “finished good” can also refer to a product that is partially complete but still needs […]

What is a Financial Year? Definition A financial year is a 12-month period used for calculating annual financial statements in businesses and other organizations. A fiscal year (or financial year) may be different from a calendar year, but many countries have adopted a standard fiscal year that runs from January 1 to December 31. The […]

What are Fair Work Practices? Definition Fair work practices are those that uphold the dignity of workers, provide them with a livable wage, and protect their rights. In recent years, there has been an increased focus on fair work practices as more and more companies outsource their labor to countries with lower wages and fewer […]

What is a Full Container Load (FCL)? Definition A full container load (FCL) is a shipment of cargo that completely fills a 20-foot or 40-foot intermodal container. FCL is the standard shipping method used for most international freight. While less-than-container loads (LCL) and airfreight are sometimes used for international shipments, they are generally more expensive […]

What is Foisa? Definition Introduction Foisa is a Scottish term meaning “to ask.” It is most commonly used in the context of asking for information from a public body, such as the government. The Freedom of Information (Scotland) Act 2002, or “Foisa” for short, gives Scottish citizens the right to request information from Scottish public […]

What are Fixed Assets? Definition Fixed assets are a valuable part of any business and understanding what they are is important for financial reporting. But what are fixed assets? In short, fixed assets are physical items that a company uses in its business operations and expects to keep using for a long period of time. […]

What is Green Procurement? Definition Green procurement is the process of selecting and purchasing products and services that have a minimal negative impact on the environment. It’s also sometimes called “sustainable procurement.” The goal of green procurement is to reduce the overall environmental impact of an organization’s purchases. To do this, businesses consider the whole […]

What is Full-Time Equivalent? Definition The term “full-time equivalent” (FTE) is used a variety of ways, but most commonly it is a way to measure the number of hours worked by one or more employees on a project. It is also sometimes used as a way to staffing levels in an organization. The FTE concept […]

What is a Group Purchasing Organization (GPO)? Definition A group purchasing organization (GPO) is a company that uses its buying power to negotiate lower prices for the products and services its members need. GPOs are common in many industries, including healthcare, where they’re sometimes called physician hospital organizations (PHOs). The concept of a GPO is […]

What is Indirect Procurement? Definition Indirect procurement is the process of procuring goods and services that are not related to the direct production of a product or service. These purchases are necessary for the operation of a company but are not part of the company’s core offering. Indirect procurement includes items such as office supplies, […]

What is a Innovation Partnership Procedure? Definition The Innovation Partnership Procedure (IPP) is a new framework introduced by the European Commission in order to support and fund innovation projects between companies and universities or research institutes. It replaces the previous Framework Programme for Research and Innovation (FP7) and is seen as a way to boost […]

What are Internal Stakeholders? Definition What are internal stakeholders? In business, the term “internal stakeholders” refers to a group of people who have an interest in the success or failure of an organization. This can include employees, managers, executives, shareholders, and others. An organization’s internal stakeholders can impact its ability to achieve its goals. For […]

What is Inventory Management? Definition Without inventory management, businesses would be lost. This term is defined as “a strategic process that encompasses the planning, acquisition, storage, and distribution of goods and services” In other words, it’s the art and science of making sure that a business has the right products in the right place at […]

What is an Integrated Procurement System? Definition You’ve probably heard the term “integrated procurement system” (IPS) thrown around quite a bit, but what does it actually mean? An IPS is a set of software applications that work together to manage the procure-to-pay process. This includes everything from sourcing and buying goods and services to paying […]

What is Inventory? Definition Inventory refers to the stock of any goods or materials that a company uses in its business operations. It is often one of the most important assets that a company has, as it can be used to generate revenue and profit. Inventory can be divided into two main types: finished goods […]

What is an Invoice Item? Definition The definition of an invoice item is a record of the sale of goods or services by a business to its customer. The invoice item will include a description of the product or service, the quantity sold, the unit price, the total price, and any other relevant details. The […]

What is an Inventory Management System? Definition Inventory management is the process of tracking and managing inventory levels, orders, and stock. An inventory management system is a software that helps businesses automate and streamline these processes. Inventory management systems are used in a variety of industries, from retail to manufacturing. They help businesses keep track […]

What is an Invoice? Definition An invoice is a document that businesses send to customers to request payment for products or services. The invoice should include the date of the transaction, the products or services sold, the quantity of each product or service, the unit price of each product or service, any discounts applied, the […]

What is Invoice Reconciliation? Definition Invoice reconciliation is the process of comparing invoices from suppliers to purchase orders and shipments received. This is done to ensure that the invoiced amount is correct, and that all items on the invoice have been received. The process of reconciling invoices can be manual or automated. Manual reconciliation is […]

What is Invoice-To-Pay (I2P)? Definition Have you ever wondered what goes into making sure all your invoices get paid on time? The process is called invoice-to-pay, or I2P for short. I2P is the process of ensuring that all invoices are paid in a timely manner. This includes verifying the accuracy of the invoice, issuing payment, […]

What is a Joint Venture? Definition A joint venture (JV) is a business agreement in which two or more parties agree to combine their resources in order to accomplish a specific goal. This type of arrangement is often used when two companies want to enter into a new market or launch a new product together. […]

What is Kaizen? Definition Kaizen is a Japanese word that means “improvement.” It’s also a business philosophy that emphasizes continuous improvement of processes and products. The Kaizen philosophy is built on the idea that small, incremental changes can have a big impact on quality and productivity. This philosophy can be applied to any area of […]

What is Kraljic Matrix? Definition Kraljic Matrix is a tool that was developed in 1983 by Peter Kraljic. It is used to help organizations determine their strategic purchasing decisions. The matrix takes into account two factors: the importance of the item being purchased and the supplier’s power. The matrix is divided into four quadrants: – […]

What is Kanban? Definition In the world of software development, there are a lot of different methods and frameworks that teams can use to manage their work. One of these methods is Kanban. So, what is Kanban? In its simplest form, Kanban is a way to visualize and manage work. It’s a flexible system that […]

What is Last In First Out (LIFO)? Definition LIFO is an inventory valuation method in which the most recently acquired items are assumed to be the first ones sold. The acronym LIFO stands for “last in, first out.” LIFO is used by businesses to manage inventory levels and costs. It can also be used to […]

What is Lead Time? Definition In business, lead time is the latency between the initiation and completion of a process. For example, the time it takes to fill a customer order or build a new product. Lead time is an important consideration in manufacturing and logistics planning. Long lead times can tie up capital in […]

What is Lean Manufacture? Definition What is lean manufacturing? This is a question that has been asked time and time again, but the answer is not always so clear. Lean manufacturing is a process that helps to eliminate waste in all areas of production. This includes everything from material waste to wasted time and energy. […]

What is Licensing? Definition Licensing is the transfer of technology or intellectual property from one company to another. In exchange for the right to use this IP, the licensee often agrees to pay the owner of the IP (the licensor) a royalty or fee. Licensing is a common way for companies to commercialize their inventions […]