Key Business Terms PDF

**Agents**: Individuals, groups, or systems that perform roles or actions in a business event. These can be internal (e.g., employees) or external (e.g., customers or suppliers). **Business Event**: A single, specific activity or step that is part of a broader business process. Examples include pla...

**Agents**: Individuals, groups, or systems that perform roles or actions in a business event. These can be internal (e.g., employees) or external (e.g., customers or suppliers). **Business Event**: A single, specific activity or step that is part of a broader business process. Examples include placing an order, making a payment, or delivering a product. **Business Process**: A collection of related activities performed by a group of stakeholders to achieve a specific goal. Business processes include steps like selling goods, buying supplies, or manufacturing products. 4. **Conversion Business Process**: The process of transforming raw inputs (materials, labor, intellectual property, etc.) into finished products or services that are sold to customers. 5. **Deconstruction (Deconstruct Events)**: Breaking down a business process into its individual events or steps to analyze each component more effectively. 6. **Event**: A single step or activity within a business process that contributes to achieving the process\'s goals. 7. **Event Trigger**: The action or condition that initiates or authorizes a business event. For example, an order placed by a customer triggers the shipping process. 8. **Extended Enterprise Business Processes**: Business processes that span across organizational boundaries and involve interactions with suppliers, customers, or other external entities. 9. **External Agent**: A party outside the organization that participates in a business event, such as a vendor, customer, or regulatory body. 10. **For-Profit Organizations**: Businesses that aim to generate profits for their owners or shareholders. Examples include corporations, sole proprietorships, and partnerships. 11. **Integrated Value Chain System**: The interconnected set of value chains within an industry, including suppliers, channels, and customers. 12. **Internal Agent**: A party within the organization that participates in a business event, such as employees, departments, or automated systems. 13. **Linkages**: The connections and interdependencies between activities or processes within or across organizations. Managing linkages effectively can create competitive advantages. 14. **Locations**: The physical or virtual places where business events occur, which are important for tracking and auditing processes. 15. **Margin**: The difference between the value created by an organization's activities and the cost of performing those activities. It represents profitability. 16. **Not-for-Profit Organizations**: Organizations that aim to provide specific services or benefits to their stakeholders, not to generate profits. Examples include charities, government agencies, and educational institutions. 17. **Order to Cash Business Process**: The process of attracting and retaining customers, delivering goods or services, and collecting payments. 18. **Outsourcing**: The practice of hiring external parties to perform certain business functions or processes, often to reduce costs or improve efficiency. 19. **Porter, Michael**: An economist known for developing the concept of the value chain, which helps analyze and optimize business activities. Porter's value chain 20. **Primary Activities**: Core business activities that create value for customers, such as inbound logistics, operations, outbound logistics, marketing and sales, and service 21. **Procure to Pay Business Process**: The process of acquiring and paying for goods or services needed by the organization, such as raw materials or utilities. Sub-steps (business events) -Identify need and possibly internally request the purchase of goods or services by an authorized purchasing agent -negotiate a purchase order with a vendor -Receive and inspect goods or services from a vendor -store and/or maintain goods -pay a vendor for goods or services -return goods to a vendor 22. **Resources**: The tangible and intangible assets used in business processes, including inventory, cash, intellectual property, or labor. 23. **Strategically Significant Business Events**: Events within a business process that are critical to achieving organizational goals and objectives. 24. **Support Activities**: Secondary activities that help facilitate primary activities, such as procurement, technology development, human resources, and firm infrastructure. 25. **Value Chain**: A framework for analyzing the activities that create value for a business, including both primary and support activities. Developed by Michael Porter, it highlights how organizations can optimize processes to gain a competitive advantage. 26. **ACH (Automated Clearing House)** -- A secure payment transfer system connecting U.S. financial institutions to process electronic funds transfers (EFT). 27. **Available to Purchase (ATP)** -- Inventory available for fulfillment of sales orders after accounting for current commitments. 28. **Backorder** -- Items ordered by a customer that are not currently in stock but will be delivered later. 29. **Balance Forward Approach** -- A payment processing method where customer payments are applied to the total outstanding account balance, not specific invoices. 30. **Bill of Lading** -- A legal document that details the goods being transported, the carrier, and shipping terms. 31. **Cash Receipts Transaction Data Store** -- A repository of records documenting each cash payment received. 32. **Closed Transactions** -- Orders, invoices, or other business records that have been fully processed and are no longer active. 33. **Credit Memo** -- A document issued to adjust or reduce a customer's accounts receivable balance, often due to product returns or pricing adjustments. 34. **Customer Master Data Store** -- Stores detailed information about each customer, including contact details and account status. 35. **Customer Order** -- A formal request from a customer to purchase goods or services. 36. **Customer Relationship Management (CRM) Software** -- Applications that manage customer interactions and data throughout the business relationship lifecycle. 37. **Cycle Billing** -- A billing approach where statements and payment due dates are staggered across the month for different customer groups. 38. **Data Flow Diagrams (DFDs)** -- Graphical representations of data processes, flows, and storage within an information system. 39. **EDI (Electronic Data Interchange)** -- The computer-to-computer exchange of business documents in a standard format. 40. **Electronic Funds Transfer (EFT)** -- A system that transfers funds between bank accounts electronically without using paper money. 41. **Enterprise Resource Planning (ERP)** -- Integrated software systems that automate and link key business processes like sales, finance, and inventory management. 42. **Financial Electronic Data Interchange (FEDI)** -- Combines EFT with EDI to transmit payments and payment information simultaneously. 43. **General Authorization** -- A routine credit approval process for customers who meet predetermined credit conditions. 44. **General Ledger System** -- The accounting system that maintains a company's financial records. 45. **Inventory Master Data Store** -- Stores detailed information on inventory items, including descriptions, quantities, and locations. 46. **Lockbox** -- A service where a bank collects payments sent by customers to a designated post office box and deposits them directly into the business\'s account. 47. **Master Data Store** -- A repository containing essential data about entities such as customers, products, and vendors. 48. **Monthly/Periodic Customer Statements** -- Reports sent to customers summarizing outstanding invoices and account activity. 49. **Open Sales Invoice** -- An invoice that has been sent to the customer but not yet paid. 50. **Open Sales Order** -- A sales order that has been approved but not yet fulfilled and invoiced. 51. **Order Acknowledgment** -- A confirmation sent to the customer that their order has been received and accepted. 52. **Order to Cash Process** -- The entire business process that includes receiving, processing, fulfilling customer orders, and collecting payments. 53. **Packing Slip** -- A document included with shipped goods listing the contents of the package. 54. **Picking Slip/Ticket** -- A document that authorizes the warehouse staff to retrieve specific items for an order. 55. **Reference Data Store** -- Contains data primarily used for reference, such as price lists or product catalogs. 56. **Remittance Advice** -- A document sent with a customer payment that details which invoices or accounts the payment should be applied to. 57. **Remittance List** -- A log of all payments received during a specific period. 58. **Return Material Authorization (RMA)** -- An approval granted to customers before they return goods, often required for a refund or credit. 59. **Sales History Data Store** -- A repository of records documenting completed sales for historical analysis. 60. **Sales Invoice** -- A document that details the goods or services sold, the price, and payment terms. 61. **Sales Invoice Transaction Data Store** -- Contains records of all sales invoices issued. 62. **Sales Order** -- A document that confirms the details and approval of a customer's order. 63. **Sales Order Transaction Data Store** -- Stores records of approved sales orders. 64. **Shipper/Carrier Reference Data Store** -- Contains information about shipping carriers and routes. 65. **Shipping Notice** -- A communication sent to the customer to provide details and tracking information about a shipped order. 66. **Shipping Transaction Data Store** -- Contains records documenting shipping activities. 67. **Specific Authorization** -- A detailed credit approval process for customers requiring further review, often new customers or those with poor credit history. 68. **Specific Invoice Method** -- A payment application method where customer payments are matched to specific invoices. 69. **Stockout** -- Occurs when there is insufficient inventory to fulfill an order. 70. **Transaction Data Store** -- A repository of records documenting individual business events, such as sales or payments. 71. **Turnaround Document** -- A document sent to customers that includes a detachable section for return with their payment or response. 72. **Unapplied Cash** -- Payments received from customers that have not been matched to a specific account or invoice. 73. **Advance Shipping Notice (ASN)**: An electronic document sent by the vendor that provides detailed information about a pending delivery, including the shipment's contents and logistics details. 74. **Bar Coded Products**: Products that have machine-readable codes to facilitate the tracking, identification, and counting of inventory. 75. **Blanket Purchase Order**: An agreement between a buyer and vendor that outlines the ongoing purchase of specified items at set prices over a designated period, streamlining recurring orders. 76. **Cash Disbursement Transaction Data Store**: A repository that stores records of payments made by the organization to settle liabilities or invoices. 77. **Corporate Debit Cards (Procurement Cards)**: Company-issued debit or procurement cards that employees use to make authorized purchases of goods and services. 78. **Debit Memo**: A document used to authorize a reduction in a purchase liability or record a refund due to returned or defective goods. 79. **Economic Order Quantity (EOQ)**: An inventory management model used to calculate the optimal order size to minimize the combined costs of ordering and holding inventory. 80. **Encumbrance**: In government accounting, a record of a contingent liability indicating that a purchase order has been issued, and funds are reserved for future payment. 81. **Evaluated Receipt Settlement (ERS)**: A process that eliminates the need for a vendor's invoice by using a two-way match between the purchase order and receiving report to authorize payment. 82. **Inventory Master Data Store**: A data repository containing detailed information about the organization's inventory items, such as product descriptions, stock levels, and locations. 83. **Just in Time Inventory (JIT)**: An inventory management system designed to reduce inventory levels by receiving goods only as they are needed, minimizing holding costs. 84. **Kanban**: A scheduling system used in JIT inventory management to signal when new inventory should be produced or ordered based on actual demand. 85. **Materials Requirements Planning (MRP)**: A system that schedules material purchases and production based on forecasts, aiming to reduce inventory levels and synchronize production schedules. 86. **Open Vendor's Invoice (Open Payable) Transaction Data Store**: A repository for storing records of liabilities for goods and services received but not yet paid. 87. **Open Purchase Order**: A purchase order that has been issued to a vendor but has not yet been fulfilled or closed by receipt of the goods or services. 88. **Open Purchase Requisition**: A request for goods or services that has been submitted internally but has not yet been converted into an approved purchase order. 89. **Procure to Pay Process**: The series of business activities involved in purchasing and paying for goods and services needed by an organization. 90. **Purchase Order**: A formal request sent to a vendor to deliver specified goods or services at agreed-upon prices and terms. 91. **Purchase Order Transaction Data Store**: A repository that records and tracks purchase orders issued by an organization. 92. **Purchase Request Transaction Data Store**: A repository that records internal requests for goods or services before they are converted into purchase orders. 93. **Purchase Requisition**: An internal document that initiates a request to purchase specific goods or services, typically requiring approval. 94. **Receiving Report**: A document created when goods or services are received, detailing the items delivered and any discrepancies noted during inspection. 95. **Receiving Report Transaction Data Store**: A repository that stores records of goods or services received by the organization. 96. **Request for Proposal (RFP)**: A formal document inviting vendors to submit proposals for providing goods or services, often used in large or complex procurement processes. 97. **Request for Quotation (RFQ)**: A document requesting price quotes from vendors for specific goods or services. 98. **Reverse Auction**: A procurement method in which vendors compete to offer the lowest price for a contract, with prices decreasing over time. 99. **Service Level Agreement (SLA)**: A formal or informal contract that specifies the services to be provided, performance standards, and terms agreed upon between a service provider and the organization. 100. **Supplier (Vendor) Master Data Store**: A repository that stores records about suppliers, including their contact information, performance history, and products/services offered.