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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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 […]