Accounts Payable News^®

 The A - Z of Accounts Payable: ( by Tom Wilson)

A

Accounts Payable Automation
The (semi-) automated management of accounts receivable administration by automated processing of invoices. Accounts payable automation requires integration of the invoicing process with card matching software.

Aggregator
Provides bill payers a single point of contact for the reception of bills from multiple senders.

AP
Accounts Payable.

AR
Accounts receivable.

B

BPR
Business Process Re-engineering.

B2B context
Business-to-business context, the market between business providers and consumers.

C

CSF
Critical Success Factor.

E

EDI
Electronic Data Interchange. Developed in the 1960s using an early principle of sending and receiving messages entirely electronically. Used predominantly by large companies with huge volumes of commercial traffic and, more often than not, involved in retail or production.

Electronic Commerce
Transfer of data in an electronic format.

Electronic Invoice Presentment and Payment (EIPP)
Order process where an eProcurement System is used to place the order and the Integrated/Embedded procurement card is used for payment. The transfer of data/financial information through Electronic Invoice Presentment (EIP) and payment made electronically. This combination constitutes detailed invoice level information in an electronic format. The transition from manually processed paper checks to electronic invoices and electronic payments.

Electronic Invoice Process
Invoice process where receipt, reconciliation and match are all electronic.

eProcurement
eProcurement applications deliver on-line Procurement services.  Key features include: electronic catalogues, punch out to suppliers’ websites for dynamic products, recurring requisitions, easy to use web access, workflow routings, electronic orders dispatched over the internet to suppliers, line item reporting capability.  eProcurement provides a single standard platform to conduct business with suppliers.

eProcurement Order Process
Order process where an eProcurement System is used to place the order.

ERP
Enterprise Resource Planning.  An Enterprise Resource Planning solution offers multiple modules that support major business processes: Production Planning, Finance, Sales, Human Resources, and Purchasing.  ERPs can be expensive to implement (Oracle, SAP) and develop.

ERP Order Process
Order process where an ERP is used to place the order.

I

Indirect Goods
Goods and services typically required to operate a Government Department or Agency (GDA), often with little strategic value (also MRO).

Interface
Simple data transfer between two systems.

Integrated/Embedded Procurement Card
Order process where an eprocurement system is used to place the order and the integrated/embedded procurement card is used for payment.

Integration
Two way, real-time data transfer between two systems.

Invoice
A demand from a supplier for payment detailing the goods or services provided their respective costs and the VAT due.

M

Manual Order Process
Order process where all steps are conducted manually.

Matching
The activity of comparing purchase orders, receipts, and invoices to ensure compliance. 

Maverick Spend
Spend committed with a non-contracted supplier where a contract exists for the goods services required.

MI
Management Information; purchasing data gathered by systems transformed into meaningful information by reporting applications.

MRO
Maintenance, Repair and Operations (also indirect goods).

P

Paper Invoice Process
Invoice process where all steps are conducted manually.

Procurement
The purchasing cycle from identification of requirement through to payment.

Providers
The technology and consultancy companies who provide eProcurement software solutions and services.

Punch-Out
A method by which a buyer interacts with a supplier’s website and retrieves requisition content into a purchasing application for submission to internal processes.

Purchase Order (PO)
A legally binding document issued to a supplier for provision of goods or services.

Purchase-to-Pay
The combined ordering-delivering-invoicing-payment process as part of the end-to-end trade process, from the buyers’ perspective.

R

Receipt
A document that quantifies the product or service received.

                                                                                                                          
Reconciliation
An accounting process used to compare two sets of records to ensure the figures are in agreement and are accurate.
Reconciliation is the key process used to determine whether the money leaving an account matches the amount spent, ensuring that the two values are balanced at the end of the recording period.

Requisition
The initial document listing the goods or services required.

ROI
Return on Investment.  In eProcurement and procurement card programmes, the benefits achieved through use of the system over time minus the total cost of implementation and use.

S

SME
Small and  Medium sized Enterprise (up to 250 headcount).

T

Three Way Match Process
Invoice process where an order, receipt and invoice are matched before payment is made to a supplier.

Two Way Match Process
Invoice process where an order is matched against an invoice before payment is made to a supplier.

U

UAT
User acceptance Testing.  A process during implementation when users test that the system handles the business process as required.

V

VFM
Value for Money.  The principle underpinning all Public Sector purchasing activity.

W

Workflow
The application by the eProcurement system or purchase-to-pay process based on business rules.  Workflow defines the routing of data from one part of the procurement process to the next based on set rules.

X

XML
eXtensible Mark-up Language – a meta or syntax language describing the data format of documents when they are transmitted electronically.

www.appropriateprocurement.com