Transaction risk intelligence
Automated supplier statement reconciliation
Supplier risk intelligence
Managed AP recovery audit
Supplier file performance review
Forensic risk analysis
Consulting and bespoke reporting
FISCAL’s Glossary of Finance Terms
Learn key terms that every member of finance should know.
Ever wondered what all those shortened financial terms mean?
Are you looking to learn more about Accounts Payable and Purchase to Pay or do you need to refresh your memory? Our glossary includes key terms and acronyms in finance and AP.
3-way matching/3-way match
A 3-way match is an accounting control that cross-references purchase order, supplier invoice and goods receipt to ensure they match. It can be completed manually or automated via software.
Accounts payable automation
The accounts payable process can be very manual, but automating that process means that tasks can be completed by software with efficiency and accuracy.
Automation saves accounts payable teams a lot of time and money by drastically reducing the time spent on tasks such as processing invoices, reconciling supplier accounts and making payments. This has a knock-on effect of allowing more time to complete value-added tasks, including analysis. Automating elements such as invoice entry and risk management also ensures ledgers are more accurate, whilst reducing human error from the procedure.
AP
AP stands for Accounts Payable, which is the department of finance that handles recording and processing transactions and payments for suppliers providing goods and services.
AR
AR stands for Accounts Receivable, the department of finance that handles recording and processing transactions and payments from customers who purchase goods and services from the organisation.
Audit
An audit is an official review of an organisation’s accounts, which can be internal or completed by an external, independent body. An accounts payable audit is a thorough review of transactions and supplier data in an organisation’s AP records. An audit of AP records usually forms part of the wider audit.
Recovery audit
A recovery audit sets out to review transactions relating to purchases specifically with an aim to protect the organisation against any financial loss.
Cash Flow
The net amount of an organisation’s cash and cash equivalents incoming versus outgoing.
Credit Note
A credit note is a document issued by a supplier acting as a negative invoice or a refund notification. It’s used to adjust or cancel a previously issued invoice, often due to errors, returns, or price discrepancies.
DPO
An acronym for days payable outstanding, a measurement which calculates the average length of time taken by an organisation to pay suppliers.
The calculation is: (average accounts payable balance / cost of goods sold) x number of days in the accounting period.
E-invoicing
E-invoicing, or electronic invoicing, is the document exchange between a customer and supplier via specialised software. Receiving data in a standardised format allows for automated processing. E-invoicing is gaining traction with some countries already having e-invoicing mandates.
ERP System
ERP stands for Enterprise Resource Planning, and in modern times a system is software that enables organisations to manage their daily activities with ease. ERPs can include finance, procurement, supply chain, risk management, project management, manufacturing, HR and sales. Examples of ERP systems include SAP, Oracle Fusion Cloud and NetSuite, Sage Intacct, Civica and Microsoft Dynamics 365.
The benefits to introducing this software are manyfold. It provides a source of truth from which many areas of the business can rely on, allowing for better accuracy and therefore smoother operations. It allows for full transparency by tracking all aspects, with the relevant personnel seeing what they need to see. This element also streamlines processes. For example, if procurement have ordered a specific item for manufacturing, then manufacturing will be able to plan their time around when the shipment is due to arrive, thus optimising their efficiency.
Goods receipt
Documentation for a product to confirm that it has been received by your organisation.
Invoice
A business document produced by a supplier, for a buyer, to indicate the payment amount owed for a product or service.
Liabilities
In finance, a liability is money that an organisation owes and has yet to pay back. These can be split into short -term and long-term liabilities, depending on the length of time you must pay it, short term being within a year. This includes any loan repayments and supplier invoices yet to be paid.
MSF
An acronym for the master supplier file, or supplier master file, also known as master vendor file. It is a central record of all supplier data including names, contact information, payment terms, payment method, and bank account details.
P2P
In accounting, P2P has a few different meanings. The most popular of these (according to google trends) is purchase to pay, but it can also mean procure to pay, or any variation of these words (such as procurement to payment). Another version of this process is called source to pay, which includes the entire sourcing lifecycle and includes contract management and supplier selection.
The procure to pay, or purchase to pay, process consists of the procurement and accounts payable functions combined. It follows goods and services from the moment they are ordered to the point of payment, and beyond, if there is an issue with that payment.
PIA
An acronym for ‘payment in advance’, meaning payments for goods and services were made for the goods or services before they were delivered.
PO
An acronym for purchase order, the document necessary to complete a purchase in an organisation, which usually needs to be approved by a person responsible for budgeting.
Procure to Pay Process
In a nutshell, the procure to pay process consists of:
- Identifying a business need for a product or service.
- Finding the right suppliers at the right price, which can include comparing quotes or going through a tender process.
- Creating a requisition.
- Issuing a purchase order.
- Receiving the order from the supplier and getting a goods receipt.
- Receiving the invoice from the supplier.
- Processing the invoice.
- Approving the invoice.
- Accounting for the goods and services. Usually this would include a goods received note (GRN) to ensure the service/goods has been delivered prior to payment.
- Paying the supplier.
- Reporting.
Many organisations use software to automate and manage the P2P processes. From ERPs to financial risk management, to procurement software, they can help with purchasing, accounts payable, cash flow, and supplier relationships.
Recurring Invoice
An invoice sent to a customer regularly for an ongoing service or product delivery.
Supplier Statement
A statement received from a supplier which lists the open transactions at a point in time.
Statement Reconciliation
The process of comparing a supplier statement with your accounting data to ensure they match. This typically allows organisations to ensure their liabilities are accurate and provides an opportunity to investigate any discrepancies.
VAT
Value-added tax. In the UK, businesses must: Include VAT in the price of goods and services unless they are exempt, keep records of VAT paid for items and services, account for VAT on imported goods, report the amount of VAT charged to customers and paid to other businesses, and pay any VAT owed to HMRC (HM Revenue and Customs).
Learn how VAT works.
Working Capital
Working capital is the cash amount available to fund and organisation’s operations and growth.
Finance Roles
AP Manager
Responsible for overseeing Accounts Payable.
CAO
Chief Accounting Officer.
CFO
Chief Financial Officer, usually the highest-ranking finance leader in the company, responsible for the wider finance team, finance strategy, reporting and investments.
FC - Financial Controller
Financial Controller, or the chief accountant who manages the accounting function for the organisation. They are concerned with accurately recording all transactions.
FD - Financial Director
Finance Director/ Financial Director – A senior finance role, which can be also known as the head of finance, with similar responsibilities to the CFO, or VP Finance.
Finance Manager
Manages cash and investments, including assisting in team-level budget management.
Finance/Accounts Clerk
AP Clerk, AR Clerk – Keeping accurate financial records for the organisation, processing invoices, preparing audits and resolving accounting discrepancies or issues.
VP Finance
A senior finance role which could constitute being the head of finance, however if there is a CFO, it is likely to focus on operations.
Laws and Authorities
ARGA
The UK’s Audit, Reporting and Governance Authority.
ECCTA
An acronym for the UK’s Economic Crime and Corporate Transparency Act, which includes several regulations around fraud risk that finance teams must comply with.
FCA
The UK’s Financial Conduct Authority.
FRC
The UK’s Financial Reporting Council.
IASB
International Accounting Standards Board.
IFRS
International Financial Reporting Standards.
SOx
An abbreviation of the Sarbanes-Oxley Act in the USA. The act aims to protect against fraudulent financial reporting and introduced new rules and penalties for violations. UK SOx refers to the Corporate Governance Code and the 2024 Corporate Governance Regime.
Institutes and Bodies
ACCA
Association of Chartered Certified Accountants.
APA
Accounts Payable Association.
CIMA
Chartered Institute of Management Accountants.
CIPFA
Chartered Institute of Public Finance and Accountancy.
ICAEW
Institute of Chartered Accountants in England and Wales.
ICAS
Institute of Chartered Accountants of Scotland.
ICPA
Institute of Certified Public Accountants – a UK accounting membership organisation. This can also stand for International Certified Public Accountant.
IFA
Institute of Financial Accountants.
IOFM
Institute of Finance and Management.
PPN
Purchase to Pay Network.
Key facts:
Most customers see ROI within 3 months.
£258,000: average annual saving per customer.
Risk identified by our solution amounts to 1% of your spend.
We have a Net Promoter Score of 78.
Specsavers' instant £1.5 million ROI and slicker processes
With 1.1 million invoices a year to process manually, AP’s workload was frustrating, time-consuming, and was at high risk of error. Automation was therefore a high priority.
After implementing e-invoicing, the team needed a way to check their work for errors. FISCAL’s software helped them prevent fraud and overpayments.
£11 million in overpayments and recovery of £1.5 million, slicker processes, AP team restructure and career development paths.
Northumbria Healthcare NHS Foundation Trust prevents £100k in overpayments for an ROI of 300%
The processes were not robust and were all retrospective. Credits could sit in ledgers for several months, causing cash flow issues.
To prevent overpayments and cost avoidance, Northumbria installed FISCAL’s forensic risk analysis solution.
In just 6 weeks, the trust prevented over £100,000 in overpayments, the equivalent of 300% ROI.
Aberdeen City Council creates bottom-line value and saves time
Mismatched invoices, delayed payments, and high fraud risks were being spotted too slowly to counteract.
Implementation of FISCAL’s software solution gave the team greater control over spend and more time to improve AP processes.
This meant the council could automate identification of payment errors and high-risk transactions. The solution also prevented a loss of £500,000 due to a supplier duplication.
Our Awards and Certifications
We know how important it is that we meet your needs with our software and our service. Without it, how can you reduce transaction, supplier and fraud risk effectively? To provide extra reassurance, we cater to your cyber security needs with ISO27001 and Cyber Essentials certification.
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