Procurement Glossary
Unfamiliar with a procurement term? This glossary defines the key terms used across the Borong platform and our resource library. Definitions are written in plain language and reflect how these terms are used in practice.
A
Approved Vendor List (AVL)
A pre-approved list of suppliers that an organisation has vetted and authorised for procurement use. Purchases must be made from vendors on the AVL to comply with procurement policy and maintain a verified supply base.
Audit Trail
A time-stamped digital record of all procurement activity, documenting each requisition, approval, purchase order, goods receipt, and invoice event. A complete audit trail is required for regulatory compliance, internal governance, and external audit.
B
B2B (Business-to-Business)
Commerce conducted between two businesses. B2B procurement platforms facilitate purchasing between enterprise buyers and their supplier networks, as distinct from B2C (business-to-consumer) commerce.
C
Catalogue Management
The process of maintaining a curated library of approved products and services available for purchase through a procurement platform. Catalogue management ensures users order from pre-approved items at agreed prices, reducing off-contract purchasing.
Contract Compliance
The degree to which purchases are made at negotiated contract rates rather than off-contract prices. Low contract compliance indicates that employees are bypassing agreed supplier terms, eroding the value of negotiated contracts.
Cost Centre
An organisational unit to which costs are allocated for budgeting and reporting. In procurement, purchase orders are assigned to a cost centre to track spend by department, project, or function.
cXML (Commerce eXtensible Markup Language)
A standard data protocol used to transmit procurement documents, including purchase orders and punchout sessions, between buyers and suppliers. cXML is supported by SAP Ariba, Coupa, Oracle, and most enterprise procurement platforms.
E
eProcurement
The use of digital platforms to manage the procurement process, replacing manual, paper-based, or email-driven workflows with automated, governed processes. eProcurement covers requisition, approval, ordering, invoice processing, and spend reporting.
ERP (Enterprise Resource Planning)
An integrated software system used to manage core business functions including finance, procurement, inventory, and operations. Common ERP platforms include SAP, Oracle, Microsoft Dynamics 365, NetSuite, SQL Account, and AutoCount.
G
GLC (Government-Linked Company)
A company in which a government holds a significant ownership stake. In Malaysia, GLCs are typically required to follow formal procurement governance frameworks including approved vendor lists, documented procurement policies, and audit-ready purchasing records.
Goods Receipt
A record confirming that ordered goods have been received by the buyer. The goods receipt is one of three documents verified in three-way matching, alongside the purchase order and supplier invoice.
H
Halal Certification
Official certification confirming that a product meets Islamic law requirements for permissibility. In procurement, halal certification is a compliance requirement for food, beverage, pharmaceutical, and personal care category purchases in relevant markets.
I
Indirect Spend
Purchasing of goods and services that support business operations but are not directly incorporated into a finished product. Indirect spend includes office supplies, MRO, IT consumables, facilities, and staff welfare. It is the primary target of eProcurement platforms.
Invoice Processing
The workflow of receiving, reviewing, matching, and approving a supplier invoice for payment. Efficient invoice processing relies on accurate three-way matching between the purchase order, goods receipt, and invoice.
L
Long-Tail Procurement
See Tail Spend. The term emphasises the distribution shape - a small number of suppliers account for most spend (the head), while a large number of suppliers each receive a small amount (the long tail).
M
Maverick Spend
Purchasing that occurs outside an organisation's approved channels, contracts, or policies. Also called off-contract or rogue spend. It typically results from employees sourcing informally rather than through an approved procurement process.
MIDAS
Borong's AI-powered price benchmarking system. MIDAS analyses transaction data across the Borong network to establish market-based price benchmarks for procurement categories. It generates real-time alerts when a supplier prices outside benchmarks or agreed contract rates, and provides granular spend analytics for procurement and finance teams. Because Borong does not buy or resell products, MIDAS benchmarks are not influenced by platform margin.
MRO (Maintenance, Repair and Operations)
Goods and services used to maintain facilities and operational infrastructure, rather than being incorporated into finished products. MRO procurement is a high-volume, high-fragmentation category typically managed as indirect spend.
O
OCI (Open Catalog Interface)
SAP's native catalog integration standard, used to connect SAP ERP environments to external supplier catalogues. OCI is the preferred punchout protocol for SAP-based organisations, including SAP ERP, SAP S/4HANA, and SAP Business One.
Off-Contract Spend
Purchasing made at prices outside a supplier's contracted or benchmarked rates. In the context of MIDAS, off-contract pricing is a supplier-side condition: an alert fires when a supplier prices outside established benchmarks or agreed rates.
P
Procurement
The process by which an organisation acquires goods, services, or works from external suppliers. Procurement covers the full cycle from identifying a need and selecting a supplier through to purchase, receipt, and payment.
Procure-to-Pay (P2P)
The end-to-end procurement workflow from purchase requisition through to supplier payment. A complete P2P process covers: requisition, approval, purchase order issuance, goods receipt, invoice matching, and payment.
Purchase Order (PO)
A formal document issued by a buyer to a supplier authorising the purchase of specified goods or services at an agreed price, quantity, and delivery schedule. A purchase order is legally binding and is the foundation of the procurement audit trail.
Purchase Requisition
An internal request submitted by an employee to purchase goods or services. A purchase requisition triggers the approval workflow and, once approved, is converted into a purchase order.
Punchout
A standard integration protocol that connects an enterprise buyer's ERP or procurement system to an external supplier catalogue. The user launches the external catalogue from within their procurement system, selects items, and returns them as structured line items into a purchase requisition. The two main punchout protocols are cXML and OCI.
R
RFP (Request for Proposal)
A document sent to suppliers inviting a detailed proposal for a defined scope of goods or services. An RFP is used for complex or high-value procurements where the buyer evaluates supplier capability and approach alongside price.
RFQ (Request for Quotation)
A document sent to one or more suppliers requesting a price for specified goods or services. An RFQ is used when the specification is defined and the buyer requires competitive pricing from multiple suppliers.
S
SKU (Stock Keeping Unit)
A unique identifier assigned to a specific product variant in a catalogue or inventory system. SKUs enable precise product identification across ordering, inventory management, and supplier invoicing.
SME (Small and Medium Enterprise)
A business classification based on employee count or annual revenue. In Malaysia, SMEs are defined by SME Corp Malaysia. SME procurement typically involves smaller spend volumes and a need for simpler, more accessible procurement tools.
Source-to-Pay (S2P)
A procurement process scope that extends procure-to-pay to include the upstream sourcing phase: supplier identification, evaluation, negotiation, and contracting. Source-to-pay represents the full commercial lifecycle of a supplier relationship.
Spend Under Management (SUM)
An organisation's total external spend that flows through the procurement function's approved processes, contracts, or platforms, expressed as a proportion of total spend. Spend under management is the headline indicator of procurement maturity.
Strategic Sourcing
A systematic approach to optimising an organisation's supply base by analysing spend data, assessing supplier markets, and developing sourcing strategies by category. Strategic sourcing applies primarily to high-spend, high-complexity categories.
Supplier Consolidation
The deliberate reduction of an organisation's active supplier base, migrating spend from fragmented tail suppliers to a smaller group of preferred, contracted vendors. Consolidation reduces administrative overhead, improves negotiating leverage, and makes compliance monitoring practical.
T
Tail Spend
The portion of an organisation's procurement spend that flows to a large number of low-value suppliers. In a typical enterprise, these suppliers represent 80 percent of the vendor count but only 20 percent of total spend. Tail spend is characterised by high transaction volume, low individual value, and poor governance.
Three-Way Matching
The process of verifying that a purchase order, goods receipt, and supplier invoice are consistent before approving payment. Three-way matching is the core control in accounts payable and prevents payment errors, duplicate payments, and supplier fraud.
V
Vendor Management
The processes used to select, onboard, monitor, and manage supplier relationships. Vendor management includes compliance documentation, performance tracking, and relationship oversight across the active supplier base.
Suggest a Term
If a procurement term used in our materials is missing from this glossary, contact our content team.
Want the Full
Framework?
The glossary covers the terms. Research & Guides covers the frameworks: tail spend, supplier consolidation, ERP integration, and procurement KPIs.