ERP Knowledge

ERP Glossary – Key Terms Explained Simply

From inventory management and GoBD to APIs: the key terms around ERP and business software – vendor-neutral, clear and with a DACH focus.

318 terms

3PL (Third-Party Logistics)

3PL (Third-Party Logistics) is the outsourcing of logistics tasks – above all warehousing, picking and shipping – to a specialized external provider. The company keeps ownership of the goods but hands the operational handling of its material flows to the 3PL partner.

ABC Analysis

ABC analysis is a business method that groups objects such as items, customers or suppliers into three classes A, B and C by their value or volume share, in order to focus attention and resources on what truly matters.

Account Receivable (Debtor)

A debtor is a customer who owes a company money for goods delivered or services rendered. In accounting, the debtor is also the personal customer account on which this open receivable is kept.

Accrual Accounting

Accrual accounting assigns expenses and income to the financial year in which they are economically caused, regardless of when the payment actually flows. This lets the annual financial statements show a period-accurate result.

Ad Hoc Analysis

An ad hoc analysis is a data evaluation carried out spontaneously and without preparation, with which a user answers a specific, often one-off question about their data themselves – without depending on a predefined standard report or the IT department.

Advance Shipping Notice (ASN)

An Advance Shipping Notice (ASN), in German "Lieferavis", is the electronic pre-notification of a shipment: the supplier tells the recipient before arrival which items are being delivered in which quantity, packaging and batch.

Advance VAT Return (UStVA)

The advance VAT return (UStVA) is the recurring, usually monthly or quarterly filing through which a business reports its collected output VAT and deductible input VAT to the tax office, declaring the resulting payment due or a refund claim.

Amazon FBA (Fulfillment by Amazon)

Amazon FBA (Fulfillment by Amazon) is a fulfillment programme in which sellers send their goods to Amazon fulfillment centers and Amazon handles storage, packing, shipping, customer service and returns. The seller remains the owner and seller of the goods but outsources the operational logistics to Amazon.

Amazon FBM

Amazon FBM (Fulfillment by Merchant) is the shipping model in which the seller handles Amazon orders themselves: they store the goods in their own or external warehouses, pick, pack and ship them at their own expense. Amazon merely provides the marketplace and order processing, while the entire logistics stays with the seller.

Amortization

Amortization (payback) refers to the point at which an investment has fully recovered its acquisition costs through the returns it generates — savings or additional revenue.

API (Interface)

An API (Application Programming Interface) is a defined programming interface through which two software systems exchange data automatically. In an ERP context, it connects the ERP with a shop, marketplace, payment, shipping and accounting, without anyone transferring data by hand.

API Gateway

An API gateway is an upstream intermediary service that funnels every incoming API request through a single entry point, checks it and forwards it to the responsible backend. It centrally handles tasks such as authentication, routing, throttling and logging that each service would otherwise have to solve on its own.

Asset Accounting

Asset accounting is the branch of accounting that records, values and depreciates a company’s fixed assets over their useful life – a subledger that documents the balance sheet’s asset accounts in detail.

Audit Trail

An audit trail is the complete, chronological record of every change in a system: who changed which record from which value to which value and when – documented in a way that cannot be altered after the fact.

Audit-Proof Data Retention

Audit-proof data retention (German "Revisionssicherheit") means storing tax- and retention-relevant data in an unalterable, complete and traceable way: once documents and postings are recorded, they can no longer be silently changed, deleted or overwritten.

Availability (SLA)

Availability (SLA) is the share of time a provider guarantees an ERP system will be usable, defined in the Service Level Agreement and usually stated as a percentage such as 99.9%. It sets how much downtime is contractually permitted and what happens if that promise is broken.

Available-to-Promise (ATP)

Available-to-Promise (ATP) is the firmly committable availability of an item for a specific date: the quantity an ERP system can still promise to a new sales order from physical stock plus expected incoming supply, minus demand already reserved for other orders.

B2B (Business-to-Business)

B2B (business-to-business) describes commercial relationships between companies – for example manufacturers selling to retailers or wholesalers to resellers – as opposed to selling to end consumers.

B2C (Business-to-Consumer)

B2C (Business-to-Consumer) describes business relationships in which a company sells goods or services directly to private end consumers – for example through an online shop or a physical store.

Backup

A backup is an additional copy of data stored separately from the original so it can be restored after a failure, error or attack. In an ERP context, the backup protects the database, documents and configuration so that a company can keep working without data loss when problems occur.

Balance Sheet

A balance sheet is the date-specific comparison of a company’s assets and its capital (equity and liabilities) at a fixed point in time. It shows which resources exist and how they were financed – both sides are always equal in amount.

Balanced Scorecard (BSC)

The Balanced Scorecard (BSC) is a performance measurement and management system that translates a company’s strategy into concrete goals, metrics and actions across several balanced perspectives – typically finance, customers, processes and learning/growth.

Batch Management

Batch management is the recording, tracking and traceability of goods in batches – that is, in production-identical lots that share a common batch number. It records which quantity of which batch was purchased, stored and sold to which customer, and when, making the path of every lot fully traceable.

Batch Picking

Batch picking is an order-picking method in which several customer orders are grouped into a single batch and picked together in one pass through the warehouse. Each storage location is visited only once, and the collected quantity is afterwards split across the individual orders.

Best-Before Date (MHD)

The best-before date (MHD) indicates how long a food product retains its specific properties such as taste, smell and nutritional value when stored correctly. In the ERP system it is tracked per batch and drives First-Expired-First-Out and blocking rules.

Best-of-Breed

Best-of-breed is an IT strategy in which a company chooses the strongest specialist solution for each functional area and connects them through interfaces into a single landscape – instead of relying on one integrated suite.

Big Bang Implementation

A big bang implementation is a rollout strategy in which a new ERP system is switched on completely on a single, fixed cutover date and the legacy system is retired at the very same moment – with no gradual transition phase.

Bill of Materials (BOM)

A bill of materials (BOM) is the structured list of all components – assemblies, individual parts and raw materials – with quantities that are needed to manufacture or assemble a product. As master data, it links a product to its constituents and is the basis for material requirements planning, costing and production control in the ERP system.

Blocked Stock

Blocked stock is the quantity of an item that is physically present in the warehouse but temporarily may not be sold, shipped or consumed. The goods are recorded in the books but excluded from available stock – for example during a quality inspection or after a complaint.

Blueprint (Target Concept)

A blueprint (target concept) is the central concept document of an ERP implementation that describes how future business processes will be mapped in the new system – the documented target state as the binding basis for configuration, adaptation and realization.

BMD (Austria)

BMD (Austria) is a widely used Austrian accounting, payroll and ERP software from BMD Systemhaus in Steyr. Across the DACH region it is regarded as the Austrian counterpart to DATEV – the de facto standard for collaboration between companies and tax advisors.

Bottleneck Management

Bottleneck management is the targeted planning and utilization of the limiting factor (the bottleneck) in a production or supply process. The bottleneck determines the maximum possible throughput, so the entire control system is aligned to it.

Break-Even Analysis

Break-even analysis identifies the point at which revenue and total costs are equal – the break-even point, from which a product or company makes neither loss nor profit and every additional unit moves into the black.

Business Case

A business case is the structured economic justification for an initiative: it weighs a project’s expected costs against its quantified benefit and thereby makes the investment decision transparent and defensible.

Business Intelligence (BI)

Business Intelligence (BI) refers to the methods and tools that collect, prepare and surface operational company data as metrics, reports and dashboards, enabling fact-based decisions.

Business Process

A business process is a logically connected sequence of activities that turns a defined trigger (input) into a value-adding result (output) for customers or the company – for example, from customer order to paid invoice. It describes who does what and when, and it is the unit that an ERP system maps and automates.

Buy Box

The Buy Box is the highlighted offer panel on an Amazon product page containing the "Add to Cart" button. When several sellers list the same product, exactly one wins this position – and with it the bulk of the sales.

Capacity Planning

Capacity planning is the balancing of the capacity requirements of scheduled orders against the available capacity of machines, equipment and staff. The goal is to distribute the load across time and resources so that deadlines are met without overloading individual work centers or leaving them idle.

CapEx vs. OpEx

CapEx vs. OpEx distinguishes capital expenditure, which is capitalized and depreciated over years, from operating expenditure, the ongoing running costs that are expensed immediately and hit the current period.

Cart Abandonment

Cart abandonment happens when a customer adds items to their online shopping cart but leaves the ordering process before completing the purchase and paying. The cart abandonment rate measures the share of these started-but-unfinished orders and is a key metric for conversion optimisation in e-commerce.

Cash Discount

A cash discount is a price reduction that the seller grants the buyer for paying an invoice within a shortened deadline. The customer may deduct a fixed percentage of the invoice amount if they pay within the shorter discount period instead of using the full payment term.

CE Marking

The CE marking is the manufacturer's declaration that a product meets all applicable EU directives and regulations and may therefore be placed freely on the market throughout the European Economic Area.

Change Management

Change management is the systematic effort to guide the affected people and processes through profound change – in an ERP implementation, all the measures that ensure employees accept, understand and productively use the new workflows and the new system.

Channel Management

Channel management is the central, operational control of all of a retailer’s sales channels – from its own online shop through marketplaces like Amazon or eBay to the brick-and-mortar store. The goal is to serve product data, prices, stock and orders consistently and automatically across every channel from a single system.

Chaotic Storage

Chaotic storage is a warehousing principle in which items have no fixed slot but are put away dynamically in whatever storage location is next free. The software handles the assignment of item to slot.

Chart of Accounts (SKR03/SKR04)

A chart of accounts is the systematic master list of every account a company can use in its bookkeeping – structured into account classes with a fixed numbering system. In the German Mittelstand, the DATEV standard charts SKR03 (ordered by business process) and SKR04 (ordered by the structure of the balance sheet and P&L) dominate.

Click and Collect

Click and Collect is an omnichannel method in which customers order and pay online and then pick up the goods themselves at a store or collection point instead of having them delivered.

Client (Mandant)

A Mandant (client) is a self-contained, accounting-wise and organizationally independent unit within an ERP installation – usually a legally separate company with its own data set.

Cloud ERP

Cloud ERP is business software for inventory management, finance and sales that is delivered as an online service over the internet and run at the provider – with no in-house servers.

Collective Invoice

A collective invoice combines several individual deliveries or services provided to the same customer within a period into a single invoice. Instead of billing each delivery note separately, the seller bundles all open items – for example every delivery of a month – into one document with a single invoice number and a single payment amount.

Commission Statement

A commission statement is the systematic calculation and payout of the performance-based compensation that sales staff, commercial agents or partners receive for turnover they broker or close. It assigns a commission to every commission-relevant business transaction and consolidates these periodically per recipient.

Complaint Management

Complaint management is a company’s structured handling of customer complaints about defective, faulty or incomplete goods and services. It covers capturing, processing and resolving individual complaints as well as their systematic analysis to identify and prevent recurring root causes.

Composable ERP

Composable ERP is a modular ERP approach in which a company assembles its system from interchangeable building blocks connected through open interfaces — instead of relying on a single, monolithic all-in-one standard software.

Connector

A connector is a ready-made, reusable software component that links two specific systems through their interfaces (APIs) and automates the data exchange between them. In an ERP context, a connector couples the ERP with a shop, marketplace, payment provider, shipping service or accounting system, without having to build the integration from scratch.

Consignment Stock

Consignment stock is a store of goods that a supplier keeps on hand but that remains the supplier’s property until the buyer withdraws it. Only on withdrawal does ownership transfer, and only then is the item delivered and invoiced – so the customer pays solely for the quantities actually consumed.

Contribution Margin

The contribution margin is the difference between the revenue and the variable costs of a product, order or customer. It shows how much is available to cover fixed costs and generate profit.

Cost Center

A cost center is a defined operational area to which costs are assigned according to the cause-and-effect principle – it answers the question "Where were which costs incurred?". It is the central organizing structure of cost center accounting and makes expenses attributable to individual departments, sites or functions.

Cost object

A cost object is the reference unit of cost accounting that "bears" the costs incurred — usually a product, an order or a service. Cost object accounting determines what costs are incurred for and what a single product costs.

Cost-Effectiveness

Cost-effectiveness is the ratio of return (benefit, output) to input (cost, resources used). It measures whether spending pays off – an initiative counts as cost-effective when the benefit gained exceeds the costs incurred to achieve it.

Credit Note

A credit note is a commercial document that fully or partially reverses a previously issued invoice – for example after returns, complaints, discounts or billing errors. It reduces the receivable owed by the customer and is posted as the mirror image of the invoice.

Creditor (Accounts Payable)

A creditor is a party the company owes money to – usually a supplier or service provider that holds an outstanding claim. In accounting, the creditor is also the subsidiary account that tracks all open and paid liabilities toward this business partner.

CRM (Customer Relationship Management)

CRM (Customer Relationship Management) is the systematic management of all customer relationships – from the first enquiry through the sale to service. A CRM system pools all contact, sales and communication data in one central place.

Cross-Border Commerce

Cross-border commerce is international online trade in which a merchant sells goods or services across national borders to consumers or business customers abroad. It combines a country-specific storefront, currency, payment, taxes, customs and international shipping into one coordinated overall system.

Cross-Docking

Cross-docking is a logistics method in which inbound goods pass straight through a transshipment hub to the shipping dock without fixed put-away, and are reassembled for onward dispatch. The goal is to cut inventory and handling costs and shorten throughput time.

Cross-Selling and Up-Selling

Cross-selling and up-selling are two sales techniques for raising revenue per customer: cross-selling adds complementary products to the main purchase (accessories, consumables), while up-selling moves the customer to a higher-value, more expensive variant of the same product. Both increase the average order value on an existing customer contact.

Customer Lifetime Value (CLV)

The customer lifetime value (CLV) is the total contribution margin a customer is expected to generate over the entire duration of the business relationship – less the cost of acquisition and servicing.

Customer Master Data

Customer master data is the central collection of a company's permanent customer information – such as addresses, contact persons and payment and delivery terms. In the ERP system it forms the master data foundation that sales, accounting and shipping access for every customer transaction.

Customer Segmentation

Customer segmentation is the division of a customer base into groups (segments) that are as homogeneous as possible, sharing similar characteristics, needs or value to the company. The goal is to align sales, marketing and service to each segment in a targeted rather than uniform way.

Customizing

Customizing refers to adapting a standard ERP system to a company's individual processes and requirements – mainly through settings and parameterization within the existing feature set, without changing the program code.

Cut-over

The cut-over is the tightly scheduled switchover phase of an ERP implementation, in which a company moves from the old to the new system: the legacy system is frozen, the final data is transferred and verified, and the new ERP is released for live operation.

D2C (Direct-to-Consumer)

D2C (Direct-to-Consumer) is a business model in which a brand sells its products straight to end customers without any intermediaries – usually through its own online shop – while keeping control of pricing, data and the customer relationship.

Dangerous Goods

Dangerous goods are substances and articles that can pose risks to people, the environment or property during transport and whose shipment is therefore legally regulated – through classification, marking, packaging and documentation under ADR.

Dashboard

A dashboard is a graphical interface that condenses the most important metrics and information of a domain onto a single screen and keeps them continuously updated, so the state of a company or process can be grasped at a glance.

Data Access Z1/Z2/Z3

Data access Z1/Z2/Z3 denotes the three access methods the German tax authority may use during a tax audit to reach tax-relevant data in an ERP system: direct (Z1), indirect (Z2) and by handover of a data carrier (Z3).

Data Center

A data center is a structurally secured building that runs servers, storage and network equipment under controlled conditions to keep IT applications permanently available. For an ERP system, the data center is the physical place where the database, documents and application logic run – whether at a cloud provider or in-house.

Data deletion concept

A data deletion concept is a documented, binding set of rules governing which personal data is deleted, when, and how. It systematically implements the GDPR principles of storage limitation and the right to erasure.

Data Format (CSV, XML, JSON)

A data format defines how data is structured and stored for exchange between systems. CSV, XML and JSON are the three most common data formats in the ERP world: CSV for simple tables, XML and JSON for nested records and interfaces.

Data Import and Export

Data import and export describe the recurring reading in (import) and writing out (export) of data during live ERP operation – usually as bulk processing via structured files such as CSV or Excel. Import fills the system with external data; export makes it available to other systems or reports.

Data Lake

A data lake is a central store that holds large volumes of raw data from many sources – structured and unstructured alike – in its original format and at low cost, applying structure only when the data is analysed (schema-on-read).

Data Maintenance

Data maintenance covers all ongoing activities that keep the data in an ERP system correct, complete, unambiguous and up to date – from creating and changing records through de-duplication to retiring outdated ones. It is the prerequisite for reliable processes and analytics.

Data Mart

A data mart is a subject-specific slice of a data warehouse that bundles the data of a single business area such as sales, purchasing or finance for fast, focused analysis.

Data Migration

Data migration is the planned, one-off transfer of data from a legacy system into a new system – for example during an ERP rollout. Master and transactional data are extracted, cleansed, remapped and moved into the structure of the target system.

Data Processing Agreement (DPA)

A data processing agreement (DPA) covers the processing of personal data by a service provider on behalf of, and on the instructions of, a controller. The DPA under Art. 28 GDPR governs this relationship in a legally binding way.

Data Quality

Data quality describes the degree to which data is fit for its intended purpose – measured across dimensions such as completeness, correctness, timeliness, consistency and uniqueness. In an ERP system, the data quality of master and transactional data directly determines how reliably processes can be automated and how dependable analyses are.

Data Residency

Data residency refers to the geographic location where an ERP system’s data is physically stored and processed – that is, which country or legal jurisdiction the servers and data centers reside in.

Data Warehouse

A data warehouse is a central, analytics-optimized database that cleans, historizes and consolidates data from multiple source systems such as ERP, shop or CRM in a subject-oriented way – serving as a reliable foundation for reporting and business intelligence.

DATEV Interface

The DATEV interface is the standardized export/import connection through which an ERP or accounting system hands over tax-relevant data – above all posting records, accounts receivable and payable, and documents – to the tax-firm software of DATEV eG in the DATEV format.

Debit and Credit

Debit and credit are the two sides of an account in double-entry bookkeeping: "debit" is the left side of an account, "credit" the right. Every transaction is posted to at least two accounts, and the total on the debit side always equals the total on the credit side.

Delivery Capability

Delivery capability is a company’s ability to fulfil a customer order completely and on the requested date, either from available stock or through timely procurement. It measures how reliably promised quantities and dates are actually met.

Delivery Note

A delivery note is a shipping document that accompanies a consignment and lists the items and quantities actually delivered. It travels with the goods from sender to recipient and serves as proof of delivery as well as the basis for goods-receipt checks and invoicing.

Delta Synchronization

Delta synchronization transfers only the records changed since the last sync between two systems – not the entire dataset.

Dependent Demand (Secondary Requirements)

Dependent demand is the requirement for raw materials, individual parts and assemblies that is calculated from the primary demand for finished, sellable products. The ERP or MRP system determines it by exploding the bill of materials – answering which components are needed in what quantity to build the planned end products.

Depreciation (AfA)

Depreciation (AfA – "Absetzung für Abnutzung") spreads the acquisition or production cost of a depreciable asset as an expense across its useful life, instead of booking it in full in the year of purchase.

Detailed Scheduling

Detailed scheduling is the fine-grained, short-term production planning that fixes the exact timing of individual operations and assigns them under the constraint of the limited (finite) capacity of a specific machine, resource, or team. It determines the sequence in which production orders are processed at each work center and thereby sets the concrete start and finish time of every operation.

Digital Shelf

The digital shelf is the sum of all digital touchpoints where customers discover, compare and buy products online – such as online shops, marketplaces and price-comparison sites.

Digital Transformation

Digital transformation is the fundamental redesign of a company’s business processes, models and culture through digital technologies – aiming to reorganise value creation in a data-driven, end-to-end way.

Disaster Recovery

Disaster recovery is the planned restoration of IT systems and data after a serious failure – such as a server defect, ransomware, fire or data-centre outage. The goal is to make a system like the ERP operational again within a predefined time and with the least possible data loss.

Drill-down

In reporting and business intelligence, drill-down means expanding an aggregated metric step by step into finer levels of detail – for example from total revenue down through the product group to the individual item or document.

Drop Shipping (Dropshipping)

Drop shipping (dropshipping) is a retail model in which the merchant sells goods but never stocks them: the supplier or manufacturer ships them on the merchant’s behalf directly to the end customer. The merchant acts only as the contracting and invoicing party, without ever physically handling the goods.

Dunning

Dunning covers all the organised steps a company takes to collect overdue customer receivables – from a friendly payment reminder through escalating dunning notices to handing the case to a collection agency or a court-based dunning procedure.

Duplicate Record

A duplicate is a record created twice or more that describes the same real-world object – for example the same customer, product, or supplier with a slightly different spelling. In an ERP system, duplicates distort analyses, cause process errors, and undermine master data quality.

E-Invoice

An e-invoice is an invoice issued and transmitted in a structured, machine-readable format (usually XML per EN 16931, e.g. XRechnung or ZUGFeRD), so it can be processed automatically without any media break.

E-Procurement

E-procurement is the electronic, system-supported handling of corporate purchasing – from the purchase requisition through the order to invoice verification – via digital catalogs, portals and standardized interfaces.

EAN (European Article Number)

The EAN (European Article Number) is an internationally unique, usually 13-digit number for identifying retail goods, printed as a barcode on the packaging. It identifies an article unmistakably worldwide and has officially been called the GTIN (Global Trade Item Number) since 2009.

eCl@ss (Classification)

eCl@ss (Classification) is an international industry standard that uniquely describes products and services through a four-level class code and standardized properties, thereby harmonizing data exchange between companies.

EDI (Electronic Data Interchange)

EDI (Electronic Data Interchange) is the automated, structured exchange of business documents – such as purchase orders, dispatch advices and invoices – directly between the IT systems of two companies, without anyone re-keying documents or sending them by email.

EDIFACT

EDIFACT is an international UN standard that defines how companies exchange structured business documents such as orders, dispatch advices and invoices electronically and machine-readably between their systems, without manual data entry.

Embedded Analytics

Embedded analytics is the integration of reports, dashboards and metrics directly into an operational application – such as an ERP or CRM system – so that analyses appear where users already work, instead of in a separate BI tool.

EN 16931

EN 16931 is the European standard that defines the semantic data model of an electronic invoice — that is, which details an e-invoice contains and what they mean. It forms the content basis for formats such as XRechnung and ZUGFeRD.

Encryption

Encryption uses a secret key to turn readable data into unintelligible ciphertext that only authorised recipients can decrypt again. In an ERP context, it protects sensitive customer, payment and document data during transmission and storage from unauthorised access.

Enterprise Service Bus (ESB)

An Enterprise Service Bus (ESB) is a central integration layer through which different applications communicate like a shared "data bus". Instead of wiring every system to every other, each application connects to the bus just once; the bus receives messages, translates them into the right format, routes them onward and orchestrates the flows between the systems.

ERP (Enterprise Resource Planning)

An ERP system (Enterprise Resource Planning) is central business software that connects core processes such as inventory management, finance, purchasing, sales and warehousing on a shared database.

ERP Implementation

ERP implementation is the project that puts a chosen ERP system into productive use – from project setup and design through configuration, data migration and testing to training, go-live and post-launch support.

ERP Rollout

An ERP rollout is the planned deployment of a fully configured ERP system into live operation – to all intended users, sites, tenants and processes. It covers the technical provisioning, data migration, training and the go-live.

ERP Selection

ERP selection is the structured process a company uses to identify the right ERP system on the market – from requirements analysis through long list, short list and demos to a weighted evaluation and final decision.

ERP Suite

An ERP suite is an integrated package of coordinated ERP modules from a single vendor that, on one shared platform and database, covers core processes such as inventory management, finance, purchasing and sales end to end.

ETL (Extract, Transform, Load)

ETL (Extract, Transform, Load) is a three-stage method for extracting data from source systems, converting it into a uniform target format and loading it into a target system. In the ERP context, ETL consolidates data from shop, marketplace, accounting and legacy systems and prepares it for migration, analysis or synchronization.

Event-Driven Architecture

Event-driven architecture (EDA) is an architectural style in which systems communicate through events: as soon as something relevant happens – such as a new order – one system produces an event that other, decoupled systems can read in real time and react to. Instead of calling each other directly, the building blocks exchange messages through a mediator.

Field Mapping

Field mapping is the unambiguous assignment of data fields in a source system to the matching fields in a target system – such as "Customer no." to "Debtor number". It defines which field belongs where and how values are recoded or reformatted along the way.

FIFO (First In, First Out)

FIFO (First In, First Out) is the principle of removing or consuming the goods that were stored first before any newer stock. It describes both a physical picking strategy in the warehouse and a cost flow assumption for valuing inventory: the oldest receipts are treated as the first to be issued.

Financial Accounting (FiBu)

Financial accounting (FiBu) is the part of accounting that records every business transaction of a company completely, by value and by period, on accounts, and derives from it the annual financial statement under commercial and tax law, consisting of the balance sheet and the profit and loss statement.

Fit-Gap Analysis

A fit-gap analysis systematically compares a company's requirements with the standard feature set of a software product, revealing which processes an ERP system already covers (fit) and where gaps remain that must be closed through customizing, process adjustment or additional development.

Forecast (Demand Planning)

A forecast (demand planning) is a data-driven prediction of a company’s future sales – usually per item, channel and period – that serves as the basis for procurement, production, inventory disposition and financial planning.

Framework Agreement

A framework agreement is an overarching supply or purchasing arrangement in which a company and a supplier set the basic terms – prices, quantities, delivery and payment conditions – for a defined period, without yet creating a specific order. The actual procurement happens later through individual release orders.

Fulfillment

Fulfillment is the complete handling of an order after checkout — from storing the goods through picking and packing to shipping, delivery and returns processing. It covers every physical and informational step needed to get an ordered product to the customer correctly and on time.

Functional Specification (Pflichtenheft)

The functional specification (Pflichtenheft) is the document produced by the supplier that describes how and with which means the requirements set out in the requirements specification (Lastenheft) will be implemented – the binding answer to the requirements spec and the contractual basis of an ERP project.

GDPR

The GDPR (General Data Protection Regulation) is the EU-wide regulation that governs how personal data is handled. It sets out the legal basis, purpose and retention period under which companies may process data about customers, suppliers and employees.

GeBüV and the QR-bill (Switzerland)

GeBüV and the QR-bill (Switzerland) are two central Swiss requirements: the Ordinance on Business Records (GeBüV) governs the audit-proof retention of business documents, while the QR-bill is the nationwide standard for payments using a machine-readable Swiss QR Code.

General Ledger

The general ledger is the central book of double-entry bookkeeping: every business transaction is posted here, sorted by account, to the relevant nominal accounts. It aggregates all postings by account and forms the basis for the balance sheet as well as the profit and loss statement.

General Ledger Account

A general ledger account is an account in the general ledger of financial accounting on which transactions of the same kind are collected by value – such as sales revenue, goods purchases, wages or bank balances. Every general ledger account carries a unique number from the chart of accounts and, through its balance, supplies the building blocks for the balance sheet and the profit and loss statement.

Go-Live

A go-live is the cutover date on which a new ERP system is switched from test to production and every user starts working in it. From that moment on, the real business processes – orders, postings, stock – run in the new system.

GoBD

The GoBD are the German Federal Ministry of Finance guidelines that define how tax-relevant books, records and documents must be kept and archived electronically – traceable, complete, correct, timely, orderly and, above all, tamper-proof.

GoBD-Compliant

GoBD-compliant means that a system or process captures, processes and retains tax-relevant data in a way that meets the requirements of the GoBD – above all traceable, complete, accurate, timely, orderly and unalterable.

Golden Record

A golden record is the single, cleansed and consolidated master data record for an object – such as a customer, supplier or item – that merges the scattered data from several source systems into one leading truth. It acts as the "single source of truth" and delivers the same reliable values to every connected system.

Goods Issue

Goods issue is the process by which a company picks, packs, ships and posts ordered goods out of stock. It is the counterpart to goods receipt and closes the logistics chain from order to hand-over to the customer.

Goods Receipt

Goods receipt is the process by which a company takes in delivered goods, checks them against the purchase order and the delivery note, and posts them to inventory. It links procurement to inventory management and is the prerequisite for correct invoice verification.

GraphQL

GraphQL is a query language and runtime for interfaces (APIs) that lets a client request exactly the data it needs through a single endpoint – no more and no less. In an ERP context, GraphQL connects the ERP system with shops, apps and third-party systems while cutting out unnecessary data transfer.

GTIN (Global Trade Item Number)

The GTIN (Global Trade Item Number) is GS1’s globally unique identification key for trade items. It labels a specific product from a specific manufacturer unmistakably and is machine-readable as a barcode – from the checkout to the marketplace listing.

Headless Commerce

Headless commerce is an architectural approach to online retail in which the presentation layer (the "frontend", the shop customers see) is technically decoupled from the commerce backend (cart, prices, orders). The two layers communicate exclusively through an API, letting sales channels be designed freely and evolve independently of the backend.

High Availability

High availability (HA) is the ability of an IT system to keep running almost without interruption even when individual components fail. It is achieved through redundancy and automatic failover, so that an ERP system reaches very high availability over an agreed period – often 99.9% or more.

Hosting

Hosting refers to running software on servers in a data center so it is reachable over the network — including the provision of computing power, storage, networking and ongoing maintenance. For an ERP system, the hosting model determines where company data lives and who is responsible for availability, updates and backups.

Hybrid ERP

A hybrid ERP is an ERP system that combines cloud and on-premise operation: part of the application runs on the company's own servers, another part as an online service at the provider – both connected into one overall system.

Hypercare

Hypercare is the closely supervised stabilization phase directly after an ERP system goes live: for a fixed period – usually two to six weeks – an expanded support team is on standby to immediately resolve bugs, questions and teething problems in live operation.

Idempotency

Idempotency is the property of an operation that, when executed multiple times, produces the same result as a single execution. In ERP interfaces it prevents duplicate postings on retries.

Incoterms

Incoterms (International Commercial Terms) are standardised trade clauses issued by the International Chamber of Commerce (ICC) that define in the sales contract who between seller and buyer bears transport costs, insurance and customs, and at which point the risk of loss of the goods passes to the buyer. With three-letter codes such as EXW, FCA, CPT or DAP they create a globally uniform language for delivery terms.

Industry-Specific ERP

An industry-specific ERP is an ERP system deliberately tailored to the processes, metrics and legal requirements of a particular sector – such as retail, manufacturing, construction or food – and ships with matching functionality out of the box.

Interface

An interface is the defined connection point through which two systems exchange data and functions. In an ERP context, it ensures that information flows automatically between inventory management, shop, marketplace, shipping and accounting instead of being transferred by hand.

Intrastat

Intrastat is the statistical reporting system for trade in goods between EU member states. Companies report their intra-Community arrivals and dispatches of goods monthly to the national statistical office once defined thresholds are exceeded.

Inventory Management

Inventory management is the continuous recording and updating of all stock levels in a system, tracked by both quantity and value. It posts every receipt and issue so that, at any moment, you know how much of each item is available where and how much capital the stock ties up.

Inventory Management

Inventory management is the end-to-end control and recording of all goods movements in a business – from purchasing through storage to sales. An inventory management system (WWS) maps this goods flow digitally and keeps stock levels up to date in real time.

Inventory Synchronization

Inventory synchronization is the automatic reconciliation of available stock between a leading system and all connected sales channels. It ensures that the online shop, marketplaces and point of sale always show the same current stock, so the same goods are never sold twice.

Inventory Turnover

Inventory turnover is a logistics metric that shows how often the average stock level is fully consumed and replenished within a period — usually one year.

Inventory Valuation

Inventory valuation is the monetary valuation of all stock on hand at a reporting date: it assigns a money value to every quantity in stock and thereby determines the capital tied up in inventory. The result feeds into the commercial and tax balance sheet as the "inventories" line item and is the basis for measuring profit and the value of goods.

Invoice Verification

Invoice verification is the systematic check of incoming supplier invoices for factual, arithmetic, and formal accuracy before they are approved for payment and posted.

iPaaS (Integration Platform as a Service)

iPaaS (Integration Platform as a Service) is a cloud-hosted platform that connects applications and data without you having to install and run your own integration software. In the ERP world, it handles the automated data flows between ERP, shop, marketplace, payment, shipping and accounting.

ISO 27001

ISO 27001 is the leading international standard for information security. It describes how an organization builds, operates and continuously improves an information security management system (ISMS) to systematically protect the confidentiality, integrity and availability of data – verifiable through independent certification.

Item Master Data

Item master data is the central, permanently stored collection of all of a company's product data – such as item number, description, units, prices, tax rates, suppliers and stock information. It serves as the authoritative reference for every process in the ERP system.

Journal Entry

A journal entry is the formal instruction in double-entry bookkeeping that records a business transaction across at least two accounts – following the “debit to credit” scheme with equal amounts on both sides.

Just-in-Time (JIT)

Just-in-Time (JIT) is a manufacturing and procurement principle in which materials, parts and assemblies are supplied only when they are actually needed in the production process – in the right quantity, at the right time, in the right place. The goal is to minimize inventory and tied-up capital by pulling material flow from actual demand instead of producing to stock.

Kanban

Kanban is a method for consumption-driven production and material control based on the pull principle: replenishment is only triggered when a downstream station actually withdraws material. Demand is signaled via cards (Japanese "kanban" = card or signal) that circulate between the consuming and supplying station and cap stock at a defined level.

KassenSichV and TSE

KassenSichV and TSE refer to Germany's Cash Register Anti-Tampering Ordinance and the Technical Security Device it mandates – a BSI-certified module that signs every POS transaction and thus protects it from later manipulation.

Key Figure System

A key figure system is an ordered set of several metrics linked either logically or mathematically that together depict a situation more completely and make it controllable than any single metric could.

Key User

A key user is an experienced power user from a department who represents their team in an ERP project, contributes requirements, helps shape and test the system, and later acts as the first point of contact and multiplier for colleagues.

KPI (Key Performance Indicator)

A KPI (Key Performance Indicator) is a selected performance metric that makes the success of a company, process, or goal measurable, enabling control and monitoring based on concrete figures.

Lead

A lead is a not-yet-qualified contact who has signalled interest in a product or service through a first interaction – such as an enquiry, a trade-fair visit or a newsletter download. The lead is thus the starting point of every sales process and the precursor to a qualified sales opportunity.

Lean Production

Lean production is a manufacturing and management approach that systematically eliminates every form of waste and aligns all activities with actual customer demand. The goal is to create exactly the value the customer pays for with as little effort as possible – in inventory, time, space and people – and to let the material flow be pulled by demand rather than producing to stock.

Legacy System

A legacy system is older software or an IT application that has often grown over many years. It still handles business-critical tasks but relies on outdated technology and is hard to maintain, extend, or replace.

Licensing Model

A licensing model defines the terms and price under which an ERP system may be used – as a one-time perpetual license, a monthly subscription (SaaS), per user, per module or usage-based. It determines the right of use, cost structure and contract term.

LIFO (Last In, First Out)

LIFO (Last In, First Out) is a cost-flow assumption that treats the most recently received items in a warehouse as the first to leave. For inventory valuation this means outgoing goods are valued at the newest purchase prices, while the older, often cheaper stock notionally remains in the warehouse.

Load Balancing

Load balancing is the automatic distribution of incoming requests across multiple servers so that no single one is overloaded. In ERP operations, load balancing keeps response times consistent and improves resilience, because failed servers are removed from the distribution.

Lot Size

The lot size is the quantity of identical parts that is combined into a single production or procurement run and manufactured or ordered together without any intermediate changeover. It determines how often you have to set up or reorder and how much stock this builds up in the warehouse.

Lower of Cost or Market Principle

The lower of cost or market principle is a commercial-law valuation rule that requires assets to be measured at the lower of two values: their acquisition or production cost, or the lower market or fair value at the balance sheet date. It puts the prudence principle into practice and prevents assets and profit from being overstated.

Make-or-Buy

Make-or-buy is the business decision of whether a company produces a service, component or product itself (make / in-house production) or purchases it externally (buy / external sourcing). The basis is a cost comparison plus strategic, qualitative and risk criteria.

Make-to-Order vs. Make-to-Stock

Make-to-order vs. make-to-stock describes the two basic strategies for when a company produces: with make-to-order (MTO) production only starts once a specific customer order arrives, whereas with make-to-stock (MTS) goods are produced to a demand forecast and shipped from inventory.

Manufacturing Bill of Materials (BOM)

A manufacturing bill of materials (BOM) fully lists which components, materials and quantities are needed to produce a specific finished good. It is the production-oriented form of the bill of materials and, together with the routing, forms the basis of every production order.

Manufacturing Lead Time

Manufacturing lead time is the total span a production order or workpiece takes from release to completion on the shop floor. It combines setup, processing, transport and queue times and is a core metric of production planning.

Marketplace

A marketplace (online marketplace) is a digital commerce platform on which many merchants offer their products to the operator’s customer base through a single, operator-provided sales channel. The operator – for example Amazon, eBay, Otto or Kaufland – supplies reach, payment and sometimes logistics, and charges commissions and fees in return.

Master Data

Master data is the central, long-lived core data of a company – such as items, customers, suppliers and accounts. It describes the permanent objects of a business and forms the foundation in the ERP system on which all business processes are built.

Master Data Management (MDM)

Master Data Management (MDM) is the organizational and technical discipline a company uses to keep its master data – such as products, customers and suppliers – consistent, accurate and free of contradictions across all systems. The goal is a reliable, authoritative dataset as a single source of truth.

Matchcode

A matchcode is a short, meaningful search and sorting key assigned to a master data record – such as a customer, supplier or item – in addition to its unique number. It lets you quickly find records in the ERP system without knowing the exact number.

Material Master

The material master is the central, permanently stored record of all materials in a company – from raw materials and semi-finished goods to finished products and merchandise. It consolidates purchasing, warehouse, planning, sales and accounting data per material and serves as the binding reference for all processes in the ERP system.

Material Planning (Disposition)

Material planning (German "Disposition") is the demand-driven planning and control of procurement and inventory. It determines which item must be ordered or produced, in what quantity and by when, so the company stays able to deliver without tying up unnecessary capital in stock.

MES (Manufacturing Execution System)

A MES (Manufacturing Execution System) is a manufacturing control system that steers, monitors and documents production in real time on the shop floor. It closes the gap between order-based planning in the ERP and the machines and workstations in the shop.

Message Queue

A message queue is a waiting line in which messages are buffered between systems until the recipient is ready to process them. It decouples sender and receiver, absorbs load spikes and ensures that no message is lost – in an ERP context, for example, orders, stock changes or documents moving between shop, ERP and shipping.

Middleware

Middleware is mediating software that sits between several applications and controls the data exchange between them. In an ERP context it connects the ERP system with shop, marketplace, shipping and accounting, translates data formats and orchestrates the flows between systems.

Migration Strategy

A migration strategy defines how a company moves from a legacy system to a new one – usually an ERP: by which approach, in which order and with which risk profile. It answers the fundamental question "big bang, phased or parallel operation?" and frames the entire cut-over.

Minimum Stock Level

The minimum stock level is the defined lower limit of an item’s inventory that should not be undercut in the warehouse. Once the stock drops to it, the ERP system triggers a reorder alert to safeguard availability and production.

Mittelstand

The Mittelstand refers to small and medium-sized enterprises that are typically owner- or family-managed and combine economic independence with the personal responsibility of the owner. Beyond quantitative size thresholds (employees, revenue), it is above all the unity of ownership and management that defines the Mittelstand.

Module (ERP Module)

A module (ERP module) is a functionally self-contained building block of an ERP system that covers a specific business area – such as purchasing, warehousing, sales or financial accounting. Multiple modules access a shared data foundation and together make up the overall system.

Moving Average Cost

The moving average cost is a method of inventory valuation in which an item's cost price is recalculated after every goods receipt as a quantity-weighted average of the existing stock and the new receipt.

MRP (Material Requirements Planning)

MRP (Material Requirements Planning) is demand-driven material requirements planning: from the production schedule and the bills of materials, MRP calculates precisely which components and raw materials must be purchased or produced, in what quantity and by which date.

MRP II (Manufacturing Resource Planning)

MRP II (Manufacturing Resource Planning) is a manufacturing planning method that extends pure material requirements planning (MRP) with capacity, labour, scheduling and financial planning, coordinating all resources of a production operation in a closed feedback loop. It links sales, production and procurement planning with financial evaluation and is regarded as the conceptual forerunner of today’s ERP system.

MRR and ARR

MRR and ARR stand for the monthly (Monthly Recurring Revenue) and annual (Annual Recurring Revenue) recurring revenue of a subscription business – the predictable income from active contracts, excluding one-time charges.

Multi-Client Capability

Multi-client capability is a software's ability to manage several organisationally separate units (clients or entities) – such as companies, subsidiaries or brands – in one shared installation, while each client's data stays strictly separated from the others.

Multi-Factor Authentication (MFA)

Multi-factor authentication (MFA) is a login method that verifies a user's identity using at least two independent factors from different categories (knowledge, possession, inherence).

Multi-Warehouse

Multi-warehouse describes the ability of an ERP or inventory management system to track stock separately across multiple physical or logical warehouses, plan across locations, and automatically assign orders to the right warehouse.

Multichannel

Multichannel (multi-channel selling) describes selling in parallel across several largely separately managed sales channels – such as your own online shop, marketplaces, the brick-and-mortar store and phone sales. The goal is to reach customers where they shop, with each channel potentially running its own processes, stock and, in some cases, its own prices.

Named User vs. Concurrent User

Named User vs. Concurrent User describes two ERP licensing models: with named users you pay per individually named person, with concurrent users you pay per simultaneously active login regardless of how many people exist.

Number Range

A number range is a rule stored in the ERP system that automatically assigns a unique, sequential number to documents and records such as invoices, orders or products.

OAuth 2.0

OAuth 2.0 is an open standard for authorization that lets an application access a user’s data in another system on their behalf – without sharing the password. Instead of handing over credentials, the user grants a revocable permission, and the application receives a time-limited access token.

OEE (Overall Equipment Effectiveness)

OEE (Overall Equipment Effectiveness) is a metric that measures how productively a machine or line actually runs compared to its theoretical maximum. To do so, it combines the three factors availability, performance and quality into a single percentage.

Off-the-Shelf vs. Custom Software

Off-the-shelf vs. custom software describes the fundamental choice between ready-made software bought "off the shelf" and shared by many companies, and a tailor-made in-house build for a single business. Off-the-shelf software is cheaper, available faster and continuously maintained; custom software fits your own processes exactly but costs more and has to be maintained yourself.

OLAP (Online Analytical Processing)

OLAP (Online Analytical Processing) is a data analysis technique that organizes metrics in a multidimensional data model – the OLAP cube – so they can be analyzed, filtered and aggregated very quickly along dimensions such as time, region, product or customer.

Omnichannel

Omnichannel describes a retail strategy in which all of a company’s sales and contact channels are fully integrated and share a common data, inventory and customer base. As a result, the customer enjoys a seamless shopping experience and can switch between online shop, marketplace, app and physical store at any time without losing information.

On-Premise ERP

On-premise ERP is ERP software that a company installs and runs on its own infrastructure – on owned or rented servers in-house or in its own data center – keeping full control over data, customizations and updates.

Onboarding

Onboarding is the structured process of introducing new users, employees, customers, or suppliers to a system, company, or business relationship and getting them productive as quickly as possible.

Open Item Accounting

Open item accounting is the bookkeeping method that tracks every not-yet-settled receivable and payable individually, per business partner, as an "open item". An item stays open until invoice and payment have been matched and cleared against each other.

Open-Source ERP

An open-source ERP is an ERP system whose source code is openly available and may be used, adapted and redistributed under a free license – without a classic, user-based license fee paid to a single vendor.

Opportunity

An opportunity (sales opportunity) is a qualified sales case in which a concrete need, a contact person and a realistic chance of closing have been identified. It sits between the still-unqualified lead and the won order and is tracked in the sales pipeline with a value, a probability and an expected close date.

Order Confirmation

An order confirmation is a commercial document with which the seller bindingly confirms a received customer order and puts the agreed terms in writing – items, quantities, prices, delivery and payment conditions. In sales, it marks the transition from a quote to a binding order.

Order Lead Time

Order lead time is the time span from the receipt of a customer order to its complete delivery. It is a key metric for the speed and reliability of order processing and is made up of processing, waiting and transport times.

Order picking

Order picking is the process of collecting items from stock to fulfil a specific order. The picker removes the ordered line items in the correct quantity from their storage locations and stages them for packing and shipping – guided by a pick list or a mobile device.

Order Processing

Order processing covers every step a company takes to handle a customer order from the initial order through delivery and invoice – order entry, availability check, picking, shipping and invoicing. It is the operational heart of the order-to-cash process.

Order-to-Cash

Order-to-cash (O2C) is the entire commercial business process from receiving a customer order to collecting payment. It covers order entry, availability checks, delivery, invoicing, and receivables and dunning management, mapping the sales-side value creation of a business.

Overselling

Overselling occurs when a retailer sells more units of an item than are actually available. The ordered goods are not in stock, so the order cannot be fulfilled as promised – typically because stock is not kept in sync across multiple sales channels.

Packaging Act (VerpackG / LUCID)

Germany’s Packaging Act (VerpackG) requires anyone who first places filled packaging on the market to register in the LUCID packaging register and license their packaging with a dual system.

Packaging Unit

A packaging unit (German: Verpackungseinheit, VPE) is the fixed quantity of a product defined in the item master that is packed together and handled as a closed unit for purchasing, storage or sale – for example a carton of 12 bottles or a pallet of 48 cartons.

Parallel operation

Parallel operation is the phase of an ERP implementation in which the old and new systems run live at the same time for a limited period. Transactions are recorded in both systems so that results can be reconciled and the new ERP validated before the legacy system is switched off.

Parameterization

Parameterization means adapting an ERP system to your own business processes solely through its intended settings and parameters – without changing the program code. The standard stays intact but behaves according to the chosen values, such as number ranges, posting rules or document workflows.

Partial Delivery

A partial delivery is the shipment of only part of the ordered quantity of a customer order; the remaining line items or quantities are delivered later as a back order.

Patch Management

Patch management is the controlled process by which software fixes (patches) for a system are systematically recorded, assessed, tested and deployed. In an ERP context, patch management keeps the application secure, stable and up to date without jeopardising ongoing operations.

Payment Service Provider (PSP)

A payment service provider (PSP) is a specialised provider that technically processes online payments between buyer, merchant and bank. It bundles several payment methods – such as credit card, PayPal, purchase on account or direct debit – through a single interface and handles authorisation, routing and securing of the transaction.

Payment Terms

Payment terms are the contractually agreed rules by which an invoice must be settled — above all the payment period, payment method, early-payment discount and consequences of default. They define by when, how and on what conditions the invoice amount falls due.

Penetration Test

A penetration test is a planned, authorized attack on an IT system designed to uncover its weaknesses before real attackers exploit them. Experts probe in a controlled way whether and how far they can break into a network, an application or — as with an ERP system — into business-critical data.

Peppol

Peppol is an international network with uniform standards that lets companies and public authorities exchange e-invoices and other procurement documents securely and automatically, without having to build a separate interface for every partner.

Permission

A permission is the authorization assigned to a user, role or group to perform a specific action in the ERP system – such as viewing, creating, editing or deleting data.

Perpetual Inventory

Perpetual inventory is a stocktaking method in which stock is not counted physically on a single cut-off date, but continuously throughout the financial year, and reconciled against the book inventory. Every item is counted at least once a year.

Physical Inventory (Stocktaking)

A physical inventory is the complete recording of all of a company’s assets and liabilities by quantity and value on a given cut-off date – in retail, above all the stock of goods. It is required by law and reconciles the book inventory with the stock actually on hand.

Pick and Pack

Pick and pack is the two-stage fulfillment process in the warehouse: first the items of a customer order are taken from their storage locations (pick), then packed ready for shipping (pack). Together these two steps form the heart of order fulfillment in mail order and e-commerce.

Pick-by-Light

Pick-by-light is a paperless, guided order-picking method in which lights at the shelf bin signal to the picker which storage location to pick from and how many units to take. Each pick is confirmed at the push of a button and reported back to the system in real time.

Pick-by-Voice

Pick-by-voice is a voice-directed order picking method: warehouse staff receive their pick tasks through a headset as spoken prompts and confirm each pick by voice command – keeping their hands free.

PIM (Product Information Management)

PIM (Product Information Management) is the central management of all of a company's product information – descriptions, attributes, images, prices and channel-specific data – in one system. From there, the data is delivered in structured form to shops, marketplaces, catalogs and the ERP system.

PPS (Production Planning and Control)

PPS (Production Planning and Control) is the planning and operational management of manufacturing: it defines which product is made in what quantity, with which materials, machines and dates. The goal is to produce orders on time and economically while making optimal use of material, capacity and inventory.

Predictive Analytics

Predictive analytics refers to analytical methods that use statistics and machine learning to derive forecasts of future events from historical data — such as expected sales, demand, delivery delays or customer churn.

Price List

A price list is a structured collection of prices for items or services that applies to a specific customer group, currency, unit of measure and a defined validity period. It is the basis from which an ERP system automatically determines the correct sales price for quotes and orders.

Primary Requirements

Primary requirements are the demand for sellable products – end products, merchandise and saleable spare parts – within a defined planning period. They derive from customer orders and sales forecasts and form the starting point of all demand and material planning.

Process Cost Accounting

Process cost accounting is a cost management method that does not spread overhead uniformly via percentage surcharges but assigns it to individual business processes and their volume drivers on a cause-based basis.

Procurement

Procurement covers every task through which a company secures the goods, materials and services it needs in the right quantity, quality and time on economical terms – from identifying demand through supplier selection and ordering to goods receipt and invoice verification.

Procurement Logistics

Procurement logistics covers all processes that move required goods and materials, both physically and in terms of information, from the supplier to their availability inside your own company – that is, transport, goods receipt, put-away and the associated stock control. It is the logistics side of procurement and connects the supply market with warehouse and production.

Product Catalog

A product catalog is the structured, maintained directory of every article a company offers – with names, descriptions, images, prices, categories and attributes. It bundles assortment data so it can be output consistently across shops, marketplaces and sales channels.

Product Feed

A product feed is a structured file that bundles all sales-relevant product data – title, description, price, image, availability and identifiers such as GTIN – in a machine-readable format. It delivers assortments automatically to shops, marketplaces, price comparison sites and advertising channels like Google Shopping.

Product Variant

A product variant is a specific, sellable version of a base item that differs from other variants of the same product only in certain attributes such as size, colour or material. Each variant has its own article number, its own stock and often its own price.

Production Order

A production order is the binding instruction to manufacture a specific product in a defined quantity by a set date. It bundles the bill of materials, routing, material and capacity requirements into a single controllable process and is the central transactional record in the ERP system through which manufacturing is planned, released, confirmed and settled.

Profit and Loss Statement (P&L)

The profit and loss statement (P&L) is the part of the annual financial statements that offsets all income and expenses of a period against each other and derives the net income or net loss for the year – the company’s overall result.

Project Methodology (Agile vs. Waterfall)

Project methodology (agile vs. waterfall) refers to the fundamental delivery model of an ERP implementation: the waterfall model works through phases such as analysis, design, build and rollout strictly one after another, while agile methods deliver the project in short, iterative cycles with continuous adaptation and early user involvement.

Provision (accrual)

A provision is a liability on the balance sheet for an obligation to a third party that is probable in principle but still uncertain in amount or timing. It charges expense in the year it is caused, even though the cash outflow happens later.

Purchase Order Management

Purchase order management covers all the tasks and processes a company uses to order goods and services from suppliers – from demand through order proposal, purchase order and order confirmation to tracking open orders. In the ERP system it is the operational core of purchasing and the bridge between demand planning and goods receipt.

Purchase Requisition (BANF)

A purchase requisition (German: BANF) is an internal, formal procurement request from a department to purchasing. It reports a specific need but does not itself place an order with a supplier.

Purchasing Terms

Purchasing terms are the conditions agreed between a company and its suppliers for a purchase – above all prices, discounts, rebates, cash discounts, payment and delivery terms, and minimum quantities. In the ERP system they are stored in the supplier master and price lists and automatically control which price applies to an order.

Quantity Discount Tier

A quantity discount tier is a volume-based pricing rule that links an item's discount or unit price to the ordered quantity across several tiers: the larger the order quantity, the higher the discount. It automates sales conditions.

Quotation

A quotation is a seller's declaration of intent to supply a (potential) customer with specific goods or services on defined terms – price, quantity, delivery time and payment conditions. It is the first binding sales document and the precursor to the order.

Real-Time Reporting

Real-time reporting means analyzing business data the instant it is created – so metrics, reports and dashboards show the current actual state without an overnight delay, instead of a stale figure from the previous day.

Release and Update Cycle

The release and update cycle describes the rhythm and form in which a software vendor delivers new versions, features, bug fixes and security updates. In an ERP context it determines how often a company receives new features, how long a version is maintained and how much effort applying updates involves.

Reorder Point

The reorder point is the stock level that, once fallen below, triggers a new order. It is set so that the remaining stock covers consumption during the replenishment lead time without running into shortages.

Reorder Point Method

The reorder point method is a consumption-driven planning technique that triggers a replenishment order as soon as available stock reaches or falls below a fixed threshold – the reorder point. The reorder point is sized so that the remaining stock bridges the replenishment lead time.

Reorder Proposal

A reorder proposal is a recommendation generated automatically by the ERP or inventory management system, indicating which item to reorder, in what quantity and from which supplier. It is created as soon as the available stock falls below a defined threshold and must be checked and approved by the purchasing planner.

Replenishment Control

Replenishment control is the process that automatically refills stock before it drops below a critical threshold – it decides when and in what quantity to reorder or reproduce.

Replenishment Lead Time

Replenishment lead time is the entire span from recognising a demand to the reordered goods being available in stock. It covers not only the supplier’s delivery time, but also internal processing, transport and put-away times, and is a central figure for the reorder point, safety stock and order trigger.

Reporting

Reporting is the systematic process of preparing, consolidating and delivering company data as structured reports and key figures, so that decision-makers can make well-founded decisions and monitor whether targets are being met.

Requirements Specification (Lastenheft)

A requirements specification (German: Lastenheft) is the document created by the client that captures every requirement for a system – in ERP projects it describes, from the company’s perspective, what the ERP system must deliver, without prescribing a technical solution.

REST API

A REST API is a programming interface that exchanges data over the web protocol HTTP: every resource such as a product, order or customer has its own address (URL) and is read or modified with standard commands. In an ERP, the REST API connects the system to shop, marketplace, payment and shipping.

Retention Obligation

The retention obligation is the legal duty to keep documents relevant for tax and commercial law – vouchers, books, invoices and business letters – for a defined period in an orderly, complete and legible form.

Return (Retoure)

A return is the sending back of already delivered goods from the customer to the seller – for example because of dissatisfaction, a wrong delivery or a defect. It triggers its own process: receiving and inspecting the returned goods, followed by a credit note, refund or exchange.

Return-to-Sender (RTS)

Return-to-Sender (RTS) refers to a shipment that could not be delivered to the recipient and is therefore sent back to the sender by the carrier – for example due to a wrong address, a recipient who could not be reached, a refused acceptance or an expired storage period. Unlike a classic customer return, the return is not initiated by the buyer but arises unintentionally during the delivery process.

Returns Management

Returns management is the systematic control of all product returns – from return registration through receipt, inspection and refund to restocking or disposal. The goal is to move returned goods back into the flow of stock and value quickly, cost-efficiently and in a bookkeeping-clean way.

Reverse Charge Procedure

The reverse charge procedure is a shift of the tax liability: not the supplying business but the recipient owes and reports the VAT. The issuer shows no tax on the invoice; the recipient calculates it themselves and — if entitled to input VAT deduction — deducts it again in the same step.

RKSV (Austrian Cash Register Security Regulation)

The RKSV (Registrierkassensicherheitsverordnung) is the Austrian regulation that protects cash registers against retroactive manipulation – every cash sale is cryptographically signed, chained and recorded immutably in the data collection log.

ROI (Return on Investment)

ROI (Return on Investment) is a profitability metric that relates the profit or benefit of an investment to its cost. Expressed as a percentage, ROI shows how much a sum spent – for example on an ERP system – brings back, making investments comparable.

Role and Permission Concept

A role and permission concept defines which users in an ERP may view, create, change or delete which data and functions. Instead of assigning rights to each user individually, permissions are bound to roles that employees receive according to their tasks.

Routing

A routing describes how a product is manufactured: it defines the individual operations in sequence and assigns each step the required resources, standard times and inspection specifications. Together with the bill of materials, which describes the "what", the routing defines the "how" of production.

RPO and RTO

RPO and RTO are the two key metrics of disaster-recovery and business-continuity planning. The RPO (Recovery Point Objective) defines the maximum amount of data loss a company can tolerate, while the RTO (Recovery Time Objective) defines the longest a system such as the ERP may stay down after an outage before it is productive again.

SaaS (Software as a Service)

SaaS (Software as a Service) is a delivery model in which software is used as a subscription over the cloud: the provider runs, maintains and updates it centrally, while users access it through a browser.

Safety Stock

Safety stock is a buffer of goods deliberately held above expected consumption to absorb fluctuations in demand and lead time. It safeguards your ability to deliver when you sell more than planned or a replenishment arrives late.

Sales Order

A sales order is a customer's binding order to be supplied with certain goods or services on agreed terms. In the ERP system it drives the entire process from order acceptance through to invoicing.

Sales Pipeline

A sales pipeline is the visual representation of all of a company's current sales opportunities along clearly defined sales stages – from initial qualification to close. It shows at a glance how many opportunities sit in each stage and what revenue can be expected from them.

Sample-Based Inventory Count

A sample-based inventory count is an inventory method permitted under German commercial law in which the entire stock is not counted; instead only a mathematically and statistically determined sample is physically recorded. From this sample the total stock is extrapolated by quantity and value.

Scalability

Scalability is the ability of an ERP system to grow along with rising load – more documents, users, items or transactions – without a drop in performance or a system replacement, by expanding resources and functionality.

Scope Creep

Scope creep is the gradual, uncontrolled expansion of a project's scope: over the course of a project, new requirements, features and requests keep getting added without adjusting deadlines, budget and resources accordingly – one of the most common causes of cost overruns, delays and frustration in ERP projects.

Self-Service BI

Self-service BI is an approach in which business users with no IT or programming skills create their own reports, analyses and dashboards – using a graphical tool on a centrally provided, governed dataset.

SEPA Direct Debit

The SEPA Direct Debit is a standardised payment method within the Single Euro Payments Area (SEPA) in which the payee collects a due amount directly from the payer's account based on a mandate granted by the payer.

Serial Number Management

Serial number management is the seamless capture and tracking of individual items via a unique serial number. Every physical unit becomes individually identifiable, so its journey from goods receipt through sale to complaint and repair can be traced at any time.

Service Order

A service order is the document a company uses to plan, carry out and invoice a service – such as maintenance, repair, installation or support. It bundles the customer, the serviced object, appointment dates, materials used and labor hours into one traceable case.

Setup Time

Setup time is the time required to change over a workstation or machine from one job to the next before productive processing begins. It occurs once per lot – regardless of the quantity produced – and covers activities such as tool changes, mounting, adjusting and the first inspection of the machine.

Shipment Tracking

Shipment tracking is the seamless monitoring of a parcel from hand-over to the carrier through to delivery. A unique tracking number captures every stage of transport and makes it visible to sender and recipient in real time.

Shipping Carrier

A shipping carrier is a transport company that accepts packaged shipments from the sender, moves them across its network and delivers them to the recipient – including shipment tracking, returns handling and defined transit times. In an ERP context, it is the service provider to which goods issue is handed over and which supplies shipping labels and tracking data.

Shipping Label

A shipping label is the machine-readable address and freight label stuck onto a parcel that carries everything the carrier needs for transport and delivery: recipient and sender address, a unique tracking number as a barcode, plus routing and product information.

Shop Floor Data Collection (BDE)

Shop floor data collection (BDE) is the systematic capture of actual data from ongoing operations – above all order, machine and labour times as well as quantities, good parts and scrap counts. It supplies the feedback used to reconcile production orders, costing and capacity planning in the ERP with reality.

Shop System

A shop system is the software a company uses to run an online store: it presents products, guides customers through the ordering process and handles payment and order intake. The shop system forms the sales front end, while stock, prices and orders usually come from a connected ERP system.

Single Sign-On (SSO)

Single Sign-On (SSO) is an authentication method that lets a user log in once at a central point and then access multiple applications without re-entering a password. In an ERP context this means one identity for the ERP, shop, accounting and other systems instead of many separate logins.

SKU (Stock Keeping Unit)

A SKU (Stock Keeping Unit) is a unique, internally assigned identifier for a specific stockable and sellable product variant. It pinpoints every unit of inventory exactly and forms the basis for inventory management, picking and cross-channel selling.

SME (small and medium-sized enterprises)

SMEs (small and medium-sized enterprises) are businesses below defined thresholds for headcount, turnover and balance sheet total – under the EU definition, up to 249 employees and no more than EUR 50 million in annual turnover.

SOAP

SOAP (Simple Object Access Protocol) is a standardized protocol that software systems use to exchange structured data in the form of XML messages. In an ERP context, SOAP serves as an interface through which an ERP system handles strictly defined requests and responses with third-party systems such as accounting, logistics or legacy business applications.

Sourcing Strategy (Single/Dual/Global)

A sourcing strategy (single/dual/global) defines how many and which suppliers a company uses for a material group: single sourcing concentrates demand on one source, dual sourcing splits it across two, and global sourcing opens procurement to worldwide sources.

Stock Transfer

A stock transfer is the movement of inventory from one storage location to another within the same company – for example between two bins, warehouses or branches. The inventory value stays unchanged; no sale and no purchase takes place, only an internal move of goods is posted.

Storage Bin

A storage bin is the smallest uniquely identifiable location within a warehouse where items are physically placed. It is designated by a unique address – usually made up of aisle, rack, level and slot – and forms the finest level at which a system can pinpoint stock.

Subscription (Subscription Model)

A subscription (subscription model) is a business model in which customers pay recurringly for a product or service – usually monthly or annually – and receive ongoing access or delivery in return, instead of buying once.

Subsidiary Ledger

A subsidiary ledger is a detailed sub-account that breaks down a control account of the general ledger into individual accounts. Instead of showing only the total balance of "receivables" or "payables", the subsidiary ledger reveals which customer or supplier owes which amount. The most important subsidiary ledgers are accounts receivable, accounts payable and fixed-asset accounting.

Supplier Evaluation

Supplier evaluation is the systematic, regular assessment of suppliers against defined criteria such as quality, on-time delivery, price and service. It provides an objective basis for supplier selection, ordering decisions and supplier development, drawing in the ERP system on transaction data from goods receipt, invoice verification and complaints.

Supply Chain Act (LkSG)

The German Supply Chain Due Diligence Act (LkSG) obliges large companies to identify human-rights and environmental risks in their supply chain, address them through prevention and remedial measures, and document how they meet these due-diligence duties.

System Replacement

A system replacement is the replacement of an existing software solution – such as a merchandise management or ERP system – with a new system, including selection, data migration, process changeover and shutdown of the legacy system.

Takt Time

Takt time is the time interval in which a product must be completed to exactly match customer demand. It is calculated by dividing the available working time by the number of units required.

Test Migration

A test migration is a trial run of the data transfer into a new system – the data from the legacy system is loaded fully into the target system, but not put into production. It surfaces mapping errors, format problems and data gaps before the real go-live happens.

Total Cost of Ownership (TCO)

Total Cost of Ownership (TCO) is the full cost of an ERP system across its entire lifecycle — not just the license or subscription, but also rollout, customizing, integrations, data migration, training, hosting, maintenance and support. TCO reveals the true cost of a system decision.

Transaction Data

Transaction data is process- and time-related data created by individual business events – such as orders, delivery notes, invoices or stock postings. It documents what happened when and to which master data, and changes with every new event.

Two-Tier ERP

Two-tier ERP is an ERP strategy that pairs a large, central corporate ERP at headquarters with a leaner, often cloud-based ERP in subsidiaries or sites, connecting the two via interfaces.

UAT (User Acceptance Test)

A UAT (User Acceptance Test), in German Abnahmetest, is the final testing phase of an ERP rollout, in which the future users themselves check whether the configured system maps their real business processes without errors. Only a successful UAT provides the basis for formal acceptance and go-live.

Unit of Measure

A unit of measure is the unit stored in the item master in which an item is counted, stored, purchased and sold – such as piece, box, kilogram or litre. It defines what stock levels, prices and quantities refer to on every document.

User Training

User training is the targeted transfer of the practical knowledge employees need to operate a piece of software – such as an ERP system – safely and correctly in their day-to-day workflows. It enables end users to carry out their specific tasks in the new system on their own.

Value-Added Tax (VAT)

Value-added tax (VAT) is a general consumption tax on the turnover from supplies of goods and services. Companies charge it on their sales, deduct the input VAT they have paid and remit only the difference to the tax office – economically, it is borne by the final consumer.

Variant Manufacturing

Variant manufacturing is a production type in which numerous product-like variants are made from a shared base type, differing only in individual features such as dimensions, equipment or material. It builds on configurable bills of materials and routings, from which the ERP system derives the concrete production BOM for each customer request.

Vendor Lock-In

Vendor lock-in is a company’s dependence on a single provider, caused by high switching costs, proprietary data formats or missing open interfaces – which makes a switch expensive, risky or practically impossible.

Vendor Master Data

Vendor master data is the central, permanently stored collection of all information about a company’s suppliers – such as address, contacts, payment and delivery terms, bank details and tax numbers. In the ERP system it is the binding reference for purchasing, goods receipt and accounts payable.

Verfahrensdokumentation (Procedural Documentation)

The Verfahrensdokumentation is the mandatory description of all processes and systems a business uses to capture, process, output and retain tax-relevant documents and data. It makes the bookkeeping traceable for a knowledgeable third party and is a core requirement of the GoBD.

Warehouse Management (WMS)

A Warehouse Management System (WMS) is software for the digital control of all warehouse processes – from put-away through picking to goods issue – with bin-level inventory tracking in real time.

Webhook

A webhook is an automatic notification that one system sends on its own via HTTP to a stored address of a target system when a specific event occurs. Instead of actively polling, the target system is informed immediately – in an ERP context about new orders, payments or stock changes, for example.

XRechnung

XRechnung is a purely structured XML invoice format that implements the European standard EN 16931 and serves as the German standard for electronic invoices to public authorities – with no visible image representation, but fully machine-processable.

XYZ Analysis

XYZ analysis is a method that classifies items by how predictable their demand pattern is. X items have steady, easily planned consumption, Y items fluctuate for seasonal or trend reasons, and Z items are consumed irregularly and are hard to forecast.

ZUGFeRD

ZUGFeRD is a hybrid e-invoice format that embeds a structured XML dataset compliant with EN 16931 into a PDF/A-3 file. The recipient sees a readable PDF, while software processes the embedded data automatically.