Sometimes when we do something or talk about something everyday, we take for granted the fact that other people don’t. That said, we wanted to step back and take the opportunity to get back to the basics. Below we have highlighted some of the keywords that we often use in the world of procurement. You will hear us use some of these terms during our complimentary demo. (Link at the bottom to put in your request!)
Invoice: A bill issued by the seller when the product has been delivered or the service has been complete.
Purchase Order (“PO”): The first step in a business transaction, it’s used by the buyer and authorizes a seller to provide a product or service at a specified price.
Non-PO Spend: Any invoice entered without a Purchase Order number. The cost goes direct to finance, but there is no information in purchasing for these invoices, and no validation price, quantity and so on.
Duplicate Invoice: Usually submitted as a reminder to the payer that the vendor has not paid yet. Duplicate payments can also occur when a vendor doesn’t provide the appropriate purchase order number on an invoice. We find duplicate invoices quite often!
Vendor: An individual or entity, who sells goods and services for a price to the customers.
General Ledger: An account or record used to sort, store and summarize a company’s transactions.
Request for Quotation (“RFQ”): This is a document used by companies to gather pricing information of goods from potential vendors. Companies who develop this document typically have a clear understanding of what they want, so their RFQ contains specific information, such as product type, specifications, and the number of goods to order.
Request for Proposal: A document used by companies to gather information about services (usually large-scale) from potential contractors. They are typically more complicated than RFQs as they contain information beyond just price.
Line Item: Every product on the order is referenced by a record that includes quantity and a reference to which order it belongs.
Point of Origin: Location or station where a carrier receives a shipment from a shipper for transportation to the destination.
Should Cost Model: Calculation of an estimated price that you create by researching all material costs, labor costs, overhead costs, and profit margins that would apply to an item
Spend Analysis: The process of identifying, gathering, cleansing, grouping, categorizing and analyzing your organizations spend data with a goal of decreasing procurement costs and improving efficiencies. Using real-time data and analytics will give you the insight you need you to save money and gain efficiency.
Strategic Sourcing: Refers to the process of identifying the spend profile of an organization and its supplier base to ensure their business requirements are aligned with the suppliers.
Still have questions or want to learn more? Visit our website, and request a complimentary demo!
