--- title: Contract Lifecycle Management Glossary: Terms Defined | Aavenir url: https://aavenir.com/glossary/ description: Plain definitions of contract lifecycle management terms, from auto renewal and redlining to obligations, liability caps and service level agreements. updated: 2026-11-07 --- [Home](https://aavenir.com/) / [Resources](https://aavenir.com/resources/) / Glossary Resources ยท Glossary # The contract management glossary, in plain English. Short, plain definitions of the terms legal, procurement and finance teams meet in contract work. Each entry explains what the term means and why it matters once a contract is signed. A to Z ## Every term, defined in plain English. Pick a letter or scroll. Each term opens its own page with how it works, why it matters and the questions people ask. ABCDEFIKLMNOPQRSTVW ### A - [Accounts payable Accounts payable is the money a business owes suppliers for goods and services received but not yet paid, shown as a liability, and the team that pays it.](https://aavenir.com/glossary/accounts-payable-ap/) - [Accounts payable automation Accounts payable automation uses software to capture supplier invoices, extract their data, match them to orders and route approvals with little manual entry.](https://aavenir.com/glossary/ap-automation-apa/) - [Acquisition cost Acquisition cost is the total cost a company records for an asset such as equipment, after discounts, incentives, closing costs and other spending, before sales tax.](https://aavenir.com/glossary/acquisition-cost/) - [Agile reporting Agile reporting shares frequent, focused updates from live data, so stakeholders see where things stand and teams can adjust plans quickly.](https://aavenir.com/glossary/agile-reporting/) - [Agile supply chain An agile supply chain responds quickly to changes in demand, in both volume and variety, using current data and flexible processes and partners.](https://aavenir.com/glossary/agile-supply-chain/) - [Approved supplier An approved supplier is a vendor that has passed the buyer's qualification, or won a formal tender, for set goods or services, so purchases of those items go to it.](https://aavenir.com/glossary/approved-supplier/) - [Automated Clearing House The Automated Clearing House (ACH) is the United States network that moves money electronically between bank accounts, without checks or cards.](https://aavenir.com/glossary/automated-clearing-house-ach/) ### B - [Best and final offer A best and final offer (BAFO) is the last, improved proposal a buyer asks shortlisted suppliers to submit near the end of a request for proposal process.](https://aavenir.com/glossary/bafo/) - [Bid analysis Bid analysis is evaluating and comparing supplier bids against set criteria such as cost, capability and risk, so the award goes to the best overall offer.](https://aavenir.com/glossary/bid-analysis/) - [Blanket purchase order A blanket purchase order, or standing order, is a long term order with one supplier for repeated deliveries of goods or services at agreed prices and terms.](https://aavenir.com/glossary/blanket-purchase-order/) - [Breach of contract A breach of contract happens when a party fails to perform an obligation in a contract, performs it late or badly, or makes clear it will not perform, without.](https://aavenir.com/glossary/breach-of-contract/) - [Buyer's guide A buyer's guide helps a company make a purchasing decision by explaining what to look for in a product, which features matter and what to ask vendors.](https://aavenir.com/glossary/buyers-guide/) ### C - [Category management Category management groups spend into categories of similar goods or services and manages each one as a business unit with its own strategy.](https://aavenir.com/glossary/category-management/) - [Category workbench A category workbench is one hub where category managers see spend, contracts, suppliers and plans together, to make better sourcing and spend decisions.](https://aavenir.com/glossary/category-workbench/) - [Centralized procurement Centralized procurement is a model where one department, usually at headquarters, buys goods and services for the whole organization and every branch.](https://aavenir.com/glossary/centralized-procurement/) - [Change order A change order is a written, agreed change to the scope of work in an existing contract, which can also adjust its price, schedule or budget.](https://aavenir.com/glossary/change-order-co/) - [Cloud computing for supply chain Cloud computing delivers storage, servers, databases and software over the internet, letting supply chain partners share data and tools without local systems.](https://aavenir.com/glossary/cloud-computing/) - [Cognitive search Cognitive search uses AI to understand the meaning and context of a query, so a contract search returns relevant clauses and answers, not just keyword matches.](https://aavenir.com/glossary/cognitive-search/) - [Conformed contract A conformed contract is a clean version of a contract revised to include every agreed change, so one document shows the current terms in full.](https://aavenir.com/glossary/conformed-contract/) - [Contract A contract is a legally binding agreement that sets out the rights and duties of the parties, usually an exchange of goods, services, money or promises.](https://aavenir.com/glossary/contract/) - [Contract abstraction Contract abstraction is pulling the key terms of a contract, such as parties, dates, values, renewal, liability and obligations, out of the document and into.](https://aavenir.com/glossary/contract-abstraction/) - [Contract addendum A contract addendum is a document added to an existing contract that adds new terms or detail, such as a new service, location or schedule, without rewriting.](https://aavenir.com/glossary/contract-addendum/) - [Contract approval Contract approval is the step where the right people review and authorize a contract before signature, based on rules such as contract value, type, risk and.](https://aavenir.com/glossary/contract-approval/) - [Contract attachments Contract attachments are the additional documents attached to a contract, such as exhibits, schedules and appendices, that hold its supporting detail.](https://aavenir.com/glossary/contract-attachments/) - [Contract audit A contract audit checks whether a contract's terms are being met by both parties, in what was delivered, what was billed and how obligations were kept.](https://aavenir.com/glossary/contract-audit/) - [Contract clause library A contract clause library is a central set of approved clauses, with fallback positions and guidance, that drafters and reviewers reuse instead of writing or.](https://aavenir.com/glossary/contract-clause-library/) - [Contract execution Contract execution is when all parties sign the final agreed contract, making it binding, and carrying out its obligations begins from the effective date.](https://aavenir.com/glossary/contract-execution/) - [Contract expiry Contract expiry is the end date of a contract, when the rights and obligations it sets stop applying unless the contract renews, is extended or is replaced.](https://aavenir.com/glossary/contract-expiry/) - [Contract extension A contract extension continues an existing contract for an extra period, usually under an extension option, sometimes with changes to terms such as price.](https://aavenir.com/glossary/contract-extension/) - [Contract lifecycle management Contract lifecycle management is the process of managing a contract from the first request through drafting, negotiation, approval, signature, obligations and.](https://aavenir.com/glossary/contract-lifecycle-management/) - [Contract management Contract management is handling contracts from drafting and negotiation through approval, signature, tracking and renewal, to get their value and limit risk.](https://aavenir.com/glossary/contract-management/) - [Contract obligations Contract obligations are the duties each party agrees to perform under a contract, such as paying on time, meeting service levels, keeping insurance in force.](https://aavenir.com/glossary/contract-obligations/) - [Contract renewal Contract renewal is extending a contract for a new term, either automatically under an auto renewal clause or by a decision and new agreement before the.](https://aavenir.com/glossary/contract-renewal/) - [Contract request stage The contract request stage is the first step of the contract lifecycle, where a business user asks for a contract and supplies the details to draft it.](https://aavenir.com/glossary/contract-request-stage/) - [Contract scorecard A contract scorecard measures how a contract is performing over time against agreed measures, so both parties share one view of progress and results.](https://aavenir.com/glossary/contract-scorecard/) - [Contract template A contract template is a standard preapproved form with fixed language and blanks for deal details, used to create contracts quickly when the same agreement recurs.](https://aavenir.com/glossary/contract-template/) - [Contract termination Contract termination is ending a contract before or at the end of its term, under a right in the contract or by agreement, and closing out what each party.](https://aavenir.com/glossary/contract-termination-lifecycle-management/) - [Contract type A contract type is the category a contract belongs to, based on how price is set, how the parties commit and how terms are formed, such as fixed price.](https://aavenir.com/glossary/contract-type/) - [Contract versions Contract versions are the successive drafts of an agreement made during redlining and negotiation, tracked so everyone knows which text is current and final.](https://aavenir.com/glossary/contract-versions/) ### D - [Dashboard A dashboard is a visual display that tracks key performance indicators and metrics in one place, so people can see at a glance how a business or process is doing.](https://aavenir.com/glossary/dashboard/) - [Decentralized procurement Decentralized procurement gives local branches, sites or business units their own purchasing authority instead of buying through a central team.](https://aavenir.com/glossary/decentralized-procurement/) - [Direct cost A direct cost is a cost that can be traced directly to producing a specific product or service, such as the materials and labor that go into it.](https://aavenir.com/glossary/direct-cost/) - [Direct cost calculation Direct cost is the cost traced wholly to making a specific product or service. The basic formula adds direct materials, direct labor and other direct expenses.](https://aavenir.com/glossary/calculate-direct-cost/) - [Direct procurement Direct procurement is sourcing and buying the raw materials, goods and services that go straight into the products or services a company produces and sells.](https://aavenir.com/glossary/direct-procurement/) - [Direct purchase A direct purchase is buying goods or services straight from the supplier without intermediaries, often the materials and components needed for production.](https://aavenir.com/glossary/direct-purchase/) - [Direct spend Direct spend is money spent on the materials, components and services that go straight into the products a business sells, and it forms part of cost of goods sold.](https://aavenir.com/glossary/direct-spend-in-procurement/) - [Dynamic discounting Dynamic discounting lets a buyer pay suppliers early in exchange for a discount, where the discount is larger the earlier the payment is made.](https://aavenir.com/glossary/dynamic-discounting/) ### E - [E-billing E-billing, or electronic billing, is sending, receiving and paying bills online, so businesses exchange invoices and payments digitally instead of on paper.](https://aavenir.com/glossary/e-billing/) - [Electronic procurement Electronic procurement, or eProcurement, is buying supplies, equipment, works and services through web based or networked systems instead of paper and email.](https://aavenir.com/glossary/e-procurement/) - [Electronic purchasing Electronic purchasing, or ePurchasing, moves buying from paper and email to digital systems, from the first requisition through ordering to paying the supplier.](https://aavenir.com/glossary/e-purchasing/) - [Electronic signature An electronic signature is a way to sign a document electronically to show agreement, recognized in law in most countries, including the United States under.](https://aavenir.com/glossary/e-signature/) - [Electronic sourcing Electronic sourcing, or eSourcing, runs sourcing online: finding and inviting suppliers, collecting and comparing bids, negotiating and awarding contracts.](https://aavenir.com/glossary/e-sourcing/) - [Electronic tendering Electronic tendering, or eTendering, is sending and receiving tenders online instead of on paper, from publishing the requirement to receiving bids and awarding.](https://aavenir.com/glossary/e-tendering/) - [ESG compliant sourcing ESG compliant sourcing is choosing suppliers on environmental, social and governance factors as well as cost and quality, and writing those standards into contracts.](https://aavenir.com/glossary/esg-compliant-sourcing/) ### F - [Financial savings management Financial savings management covers estimating procurement savings, projecting them into the budget and tracking what is realized in actual spend.](https://aavenir.com/glossary/financial-savings-management/) - [Financial supply chain management Financial supply chain management treats the money flowing between trading partners as one process, covering procure to pay, working capital and order to cash.](https://aavenir.com/glossary/financial-supply-chain-management/) ### I - [Indirect procurement Indirect procurement is buying what a business needs to run, such as facilities, utilities, staffing, software and office supplies, rather than to make its products.](https://aavenir.com/glossary/indirect-procurement/) - [Indirect spend Indirect spend is money spent on goods and services that keep a business running, such as supplies, software and facilities, but do not go into its products.](https://aavenir.com/glossary/indirect-spend-in-procurement/) - [Inventory management system An inventory management system is the software, hardware and processes that track and maintain stock, from raw materials and supplies to finished goods.](https://aavenir.com/glossary/inventory-management-systems/) - [Invoice approval Invoice approval is reviewing and authorizing a supplier invoice before it is recorded and paid, to confirm the goods or services arrived at the agreed price.](https://aavenir.com/glossary/invoice-approval/) - [Invoice data extraction Invoice data extraction is capturing supplier invoice details, such as number, supplier, amounts and lines, as structured data that can be checked, matched and paid.](https://aavenir.com/glossary/invoice-data-extraction/) - [Invoice management Invoice management is how accounts payable receives, validates, approves and pays supplier invoices, then records each payment in the company books.](https://aavenir.com/glossary/invoice-management/) - [Invoice matching Invoice matching is the accounts payable check that compares a supplier invoice with the purchase order and the receipt before the invoice is paid.](https://aavenir.com/glossary/invoice-matching/) - [Invoice reconciliation Invoice reconciliation matches invoices to purchase orders, receipts, payments and bank statements to confirm every figure agrees and every entry is right.](https://aavenir.com/glossary/invoice-reconciliation/) - [Item master data Item master data is the record of key information about each inventory item, such as its description, dimensions, cost, suppliers and current stock level.](https://aavenir.com/glossary/item-master-data/) ### K - [Key performance indicator A key performance indicator is a measurable value that shows how well an organization, team or process is progressing toward an important goal, and where to focus.](https://aavenir.com/glossary/key-performance-indicator-kpi/) ### L - [Late tender A late tender is a bid received after the stated closing date and time. Learn why most buyers reject late tenders and how to avoid them.](https://aavenir.com/glossary/late-tender/) - [Lean procurement Lean procurement applies lean principles to buying: it removes waste from the procurement process so teams deliver more value with less time, effort and cost.](https://aavenir.com/glossary/lean-procurement/) - [Legal hold A legal hold, or litigation hold, is an instruction to preserve documents and data that may be relevant to litigation, an investigation or a regulatory inquiry.](https://aavenir.com/glossary/legal-hold/) ### M - [Mass contracts Mass contracts is the ability to create, send and manage the same standard contract to many recipients in one operation, instead of one at a time.](https://aavenir.com/glossary/mass-contracts/) - [Master service agreement A master service agreement is a contract that sets the general terms for a long running relationship, so that each new piece of work can be agreed quickly in a.](https://aavenir.com/glossary/master-service-agreement/) - [Maverick spending Maverick spending is buying outside agreed procurement policy, such as from non preferred suppliers or off contract, which loses negotiated savings and adds risk.](https://aavenir.com/glossary/maverick-spending/) ### N - [Negotiation Negotiation is the process two or more parties use to settle differences and reach an agreement both can accept and honor, such as the terms of a contract.](https://aavenir.com/glossary/negotiation/) - [Net 30 Net 30 is an invoice payment term meaning the buyer must pay the full amount within 30 calendar days of the invoice date. Learn how it works and what to check.](https://aavenir.com/glossary/net-30/) - [Net 45 Net 45 is a payment term meaning the buyer must pay the full invoice amount within 45 days of the invoice date, after which late payment penalties may apply.](https://aavenir.com/glossary/net-45/) - [Net 90 Net 90 is a payment term giving the buyer 90 days from the invoice date to pay in full, sometimes with a discount offered for paying earlier.](https://aavenir.com/glossary/net-90/) - [Notes payable Notes payable are written promises to repay borrowed money with interest by a set date, recorded as a liability on the borrower's balance sheet until they are paid.](https://aavenir.com/glossary/notes-payable/) ### O - [Open tendering Open tendering is a competitive procurement method where any qualified supplier may bid for a contract for goods, services or works, in a public process.](https://aavenir.com/glossary/open-tendering/) ### P - [Panel arrangement A panel arrangement is a group of suppliers selected in advance to provide defined goods or services, so buyers can order from them under agreed terms.](https://aavenir.com/glossary/panel-arrangement/) - [Pricing template A pricing template is a structured form in a sourcing event where suppliers enter detailed pricing for each item or service, so bids can be compared line by line.](https://aavenir.com/glossary/pricing-template/) - [Procure to pay Procure to pay, also called purchase to pay, is the process and software that run every step from requesting a purchase to paying the supplier.](https://aavenir.com/glossary/p2p-procure-to-pay-or-purchase-to-pay/) - [Procure to pay process The procure to pay process is how an organization buys and pays for the goods and services it needs, from the first requisition to invoice approval and payment.](https://aavenir.com/glossary/procure-to-pay-process/) - [Procure to pay software Procure to pay software connects purchasing and accounts payable in one system, handling requisitions, purchase orders, receipts, invoices and supplier payments.](https://aavenir.com/glossary/p2p-software/) - [Procurement analytics Procurement analytics is gathering, classifying and analyzing purchasing data from many sources to produce insights that improve sourcing, suppliers and spend.](https://aavenir.com/glossary/procurement-analytics/) - [Procurement contract management Procurement contract management is managing the contracts behind what an organization buys, from negotiating terms to checking compliance and recording changes.](https://aavenir.com/glossary/procurement-contract-management/) - [Procurement cycle The procurement cycle is the repeating set of steps for buying goods and services, from identifying a need to choosing a supplier, ordering, receiving and paying.](https://aavenir.com/glossary/procurement-cycle/) - [Procurement optimization Procurement optimization is improving how an organization buys, across people, process, data and technology, so procurement creates more value.](https://aavenir.com/glossary/procurement-optimization/) - [Procurement planning Procurement planning is deciding what to buy, when, from which kind of supplier and by which method, so goods and services arrive when they are needed.](https://aavenir.com/glossary/procurement-planning/) - [Procurement process The procurement process is the set of steps for finding suppliers, agreeing terms and buying goods, services or works, often through competitive bidding.](https://aavenir.com/glossary/procurement-process/) - [Procurement profiling Procurement profiling is gathering and analyzing spend data to see buying patterns and find chances to buy better, with fewer suppliers or better terms.](https://aavenir.com/glossary/procurement-profiling/) - [Procurement value Procurement value is the total benefit procurement brings, from savings to innovation, risk reduction, growth and responsible sourcing, against what is spent.](https://aavenir.com/glossary/procurement-value/) - [Product master data management Product master data management keeps one trusted record of each product, including specifications, materials, suppliers and attributes, shared across systems.](https://aavenir.com/glossary/product-master-data-management/) - [Proposal A business proposal is a written offer from a seller explaining how it will meet a buyer's needs, with its approach, capabilities, timeline and terms.](https://aavenir.com/glossary/proposal/) - [Provider performance management Provider performance management is how healthcare organizations measure and manage the providers they contract with, against quality, cost and contract terms.](https://aavenir.com/glossary/provider-performance-management/) - [Proximity search Proximity search finds contracts or clauses where chosen words or phrases appear close together, which makes results more precise than a plain keyword search.](https://aavenir.com/glossary/proximity-search/) - [Purchase description A purchase description states the essential features and functions an item or service must have to meet the buyer's needs when no specification exists.](https://aavenir.com/glossary/purchase-description/) - [Purchase order A purchase order is a formal document a buyer sends a seller listing the items, quantities and agreed prices it wants to buy. Learn how it works.](https://aavenir.com/glossary/purchase-order/) - [Purchase order management Purchase order management is the process and software for handling purchase orders from creation and approval through delivery, invoicing and closure.](https://aavenir.com/glossary/purchase-order-management/) - [Purchase requisition A purchase requisition is an internal request an employee submits to buy goods or services for the organization, which starts approval and the purchasing process.](https://aavenir.com/glossary/purchase-requisition/) - [Purchase to pay Purchase to pay, or procure to pay, is the process from requesting a purchase through ordering, receiving, invoicing and paying the supplier.](https://aavenir.com/glossary/purchase-to-pay/) ### Q - [Quotation A quotation is a document a seller gives a buyer offering goods or services at a stated price under stated conditions, before the buyer commits.](https://aavenir.com/glossary/quotation/) ### R - [Reporting Reporting presents information in an organized format for a purpose. In procurement it shows spend, suppliers, orders, invoices and contracts.](https://aavenir.com/glossary/reporting/) - [Request for information A request for information (RFI) is a formal questionnaire that collects written information about suppliers' capabilities in a format that can be compared.](https://aavenir.com/glossary/request-for-information-rfi/) - [Request for proposal A request for proposal (RFP) invites qualified suppliers to propose a solution to a defined need, with their approach, capability, price, timeline and terms.](https://aavenir.com/glossary/request-for-proposal-rfp/) - [Request for quotation A request for quotation (RFQ) asks suppliers to quote prices and terms for specific, clearly defined products or services. Learn when to use one.](https://aavenir.com/glossary/request-for-quotation/) - [Request for supplier qualification A request for supplier qualification (RFSQ) gathers suppliers' credentials and competences to find who is qualified, or to narrow the field for a specific need.](https://aavenir.com/glossary/request-for-supplier-qualification-rfsq/) - [Request for tender A request for tender (RFT) is an open invitation to suppliers to submit offers, usually sealed bids, in a set format for clearly defined work.](https://aavenir.com/glossary/request-for-tender-rft/) - [Response to questionnaire A response to questionnaire is the set of answers a supplier gives to a buyer's predefined sourcing questions, used to evaluate and shortlist suppliers.](https://aavenir.com/glossary/response-to-questionnaire/) - [RFP debrief An RFP debrief is a meeting between a buyer and bidders after a request for proposal, explaining where each proposal was strong, where it was weak and why.](https://aavenir.com/glossary/rfp-debrief/) - [RFx software RFx software runs requests for information, proposal and quotation in one system, with templates, supplier responses, scoring and side by side comparison.](https://aavenir.com/glossary/rfx-software/) - [RFx tools RFx tools are the features within sourcing software that build, send, collect and score requests for information, quotation and proposal, cutting sourcing time.](https://aavenir.com/glossary/rfx-tools/) - [Risk analysis Risk analysis is identifying and assessing what could harm a business, project or decision, judging how likely and serious each risk is, so it can be reduced.](https://aavenir.com/glossary/risk-analysis/) - [Risk management plan A risk management plan sets out how an organization identifies, assesses, responds to and monitors the risks that could affect a project or the business.](https://aavenir.com/glossary/risk-management-plan/) ### S - [S2P software Source-to-pay (S2P) software runs buying in one system, from sourcing and supplier selection to contracts, purchase orders, invoices and payment.](https://aavenir.com/glossary/s2p-software/) - [Savings tracking Savings tracking is monitoring the savings procurement plans and delivers, from the figure negotiated in a deal to what actually shows up in spend.](https://aavenir.com/glossary/savings-tracking/) - [Savings tracking software Savings tracking software plans, records and measures cost saving initiatives, giving procurement and finance one view from target to realized savings.](https://aavenir.com/glossary/savings-tracking-software/) - [ServiceNow GRC ServiceNow GRC is the suite of ServiceNow applications that helps organizations manage policies, risks, audits and third parties on one platform.](https://aavenir.com/glossary/servicenow-grc/) - [ServiceNow IT service management ServiceNow IT service management is a cloud platform for running IT services, with incident, problem, change and request workflows in one system.](https://aavenir.com/glossary/servicenow-it-service-management-itsm/) - [ServiceNow knowledge ServiceNow Knowledge is the annual ServiceNow conference where customers, partners and experts meet to learn about the platform and how work runs on it.](https://aavenir.com/glossary/servicenow-knowledge/) - [ServiceNow Sourcing and Procurement Operations ServiceNow Sourcing and Procurement Operations is a set of ServiceNow apps that runs buying requests, sourcing, purchase orders and supplier work on the platform.](https://aavenir.com/glossary/servicenow-sourcing-and-procurement-operations/) - [ServiceNow TPRM ServiceNow Third-Party Risk Management is a ServiceNow application that automates vendor questionnaires, risk assessments and follow up in one place.](https://aavenir.com/glossary/servicenow-tprm/) - [ServiceNow VRM ServiceNow Vendor Risk Management was the ServiceNow application for finding, assessing and reducing vendor risk. It is now ServiceNow Third-Party Risk Management.](https://aavenir.com/glossary/servicenow-vrm/) - [Should cost analysis Should cost analysis estimates what an item ought to cost from materials, labor, overhead and margin, so buyers can test quotes and negotiate from facts.](https://aavenir.com/glossary/should-cost-analysis/) - [Solicitation A solicitation is a buyer's formal request to suppliers to submit information, quotes, proposals or bids, the step that starts identifying and selecting suppliers.](https://aavenir.com/glossary/solicitation/) - [Source to pay Source to pay is the end to end procurement process, from spend analysis and sourcing through contracting and purchasing to processing invoices and paying suppliers.](https://aavenir.com/glossary/s2p-source-to-pay/) - [Source to settle Source to settle is the connected cycle of sourcing and buying, from requisition and sourcing events through orders and receipt to paying the supplier invoice.](https://aavenir.com/glossary/source-to-settle/) - [Spend analysis Spend analysis is collecting, cleaning, classifying and analyzing spend data to see what you buy, from whom and on what terms, and where to cut cost and risk.](https://aavenir.com/glossary/spend-analysis/) - [Spend analysis technology Spend analysis technology collects, cleans, classifies and presents spend data from many systems, so procurement and finance can see where money goes.](https://aavenir.com/glossary/spend-analysis-technology/) - [Spend leakage Spend leakage is spending with suppliers that are not approved or under contract, or spending that misses agreed terms such as contracted rates.](https://aavenir.com/glossary/spend-leakage/) - [Spend management Spend management is controlling and getting the most value from what an organization spends with suppliers, from sourcing and contracts to payment.](https://aavenir.com/glossary/spend-management/) - [Spend taxonomy A spend taxonomy is the hierarchy of categories used to classify what an organization buys, from broad groups down to specific items and services.](https://aavenir.com/glossary/spend-taxonomy/) - [Straight through processing Straight through processing (STP) is a fully automated flow, most often for payments, that runs on electronic transfers from start to finish with no manual step.](https://aavenir.com/glossary/straight-through-processing-stp/) - [Supplier diversity Supplier diversity is a program that includes suppliers owned by minority, women, veteran, small and other underrepresented business owners in purchasing.](https://aavenir.com/glossary/what-is-supplier-diversity/) - [Supplier evaluation Supplier evaluation is assessing potential and current suppliers with quantitative and qualitative measures, to approve the right ones and monitor how they perform.](https://aavenir.com/glossary/supplier-evaluation/) - [Supplier information management Supplier information management captures, stores, updates and analyzes all supplier data in one place, so it stays accurate, complete and compliant.](https://aavenir.com/glossary/supplier-information-management/) - [Supplier master data management Supplier master data management is the processes and technology that keep one accurate, secure and trusted record of every supplier across all systems.](https://aavenir.com/glossary/supplier-master-data-management/) - [Supplier network management Supplier network management coordinates the flow of materials, documents and information between a company and its suppliers across the whole network.](https://aavenir.com/glossary/supplier-network-management/) - [Supplier performance management Supplier performance management is measuring, analyzing and improving how suppliers perform, to cut cost, reduce risk and drive steady improvement.](https://aavenir.com/glossary/supplier-performance-management/) - [Supplier performance review A supplier performance review regularly checks how a supplier delivers against its contract on quality, delivery, cost, service levels and compliance.](https://aavenir.com/glossary/supplier-performance-review/) - [Supplier portal A supplier portal is a secure site where a company and its suppliers share registration details, documents, orders, invoices and messages in one place.](https://aavenir.com/glossary/supplier-portal/) - [Supplier rationalization Supplier rationalization, also called supply base reduction, is choosing the right number and mix of suppliers, usually by consolidating spend with fewer of them.](https://aavenir.com/glossary/supplier-rationalization/) - [Supplier relationship management Supplier relationship management (SRM) is a planned approach to managing suppliers, segmenting them by importance and setting a strategy for each group.](https://aavenir.com/glossary/supplier-relationship-management-srm/) - [Supplier segmentation Supplier segmentation is grouping suppliers by criteria such as spend, risk and importance, so limited resources go where they make the most difference.](https://aavenir.com/glossary/supplier-segmentation/) - [Supplier sourcing Supplier sourcing is identifying, evaluating and selecting suppliers that meet your needs on cost, quality, delivery and performance.](https://aavenir.com/glossary/supplier-sourcing/) - [Supplier's market A supplier's market is one where there are few suppliers compared with demand, which gives sellers the stronger hand to set prices and terms.](https://aavenir.com/glossary/suppliers-market/) - [Supply base management Supply base management is managing the full set of suppliers a company buys from, current and future, to control risk, behavior, cost and information.](https://aavenir.com/glossary/supply-base-management/) - [Supply chain control tower A supply chain control tower brings supply chain data together in near real time, so teams can spot issues, decide and act before problems spread.](https://aavenir.com/glossary/supply-chain-control-tower/) - [Supply chain mapping Supply chain mapping documents every company, supplier and site involved in making and moving your products, to build a map of the supply network.](https://aavenir.com/glossary/supply-chain-mapping/) - [Supply chain optimization Supply chain optimization is running a supply chain at peak efficiency, delivering to customers at the lowest total cost while meeting service goals.](https://aavenir.com/glossary/supply-chain-optimization/) - [Supply chain resilience Supply chain resilience is the ability to resist disruption, limit its effect on revenue, cost and customers, and recover quickly when things go wrong.](https://aavenir.com/glossary/supply-chain-resilience/) - [Supply chain sustainability Supply chain sustainability is managing the environmental, social and ethical impact of suppliers, from emissions and waste to labor and human rights.](https://aavenir.com/glossary/supply-chain-sustainability/) - [Supply chain visibility Supply chain visibility (SCV) is the ability to track orders and shipments from source to destination, including the events and milestones along the way.](https://aavenir.com/glossary/supply-chain-visibility-scv/) - [Supply management Supply management is finding, buying and managing the goods, services and suppliers an organization needs, from sourcing and contracts to performance.](https://aavenir.com/glossary/supply-management/) - [Supply positioning model The supply positioning model sorts purchases by spend and supply risk into four quadrants, so procurement can pick the right strategy for each category.](https://aavenir.com/glossary/supply-positioning-model/) - [Sustainable procurement Sustainable procurement is buying in a way that weighs social, environmental and economic impact alongside price and quality, while still meeting business needs.](https://aavenir.com/glossary/sustainable-procurement/) ### T - [Transaction costs Transaction costs are the costs of an exchange beyond the price, such as searching, negotiating, contracting, monitoring and resolving disputes.](https://aavenir.com/glossary/transaction-costs/) - [Two-way invoice matching Two-way invoice matching compares an invoice with its purchase order to check quantities, prices and terms agree before the invoice is approved and paid.](https://aavenir.com/glossary/two-way-invoice-matching/) ### V - [Vendor agreement A vendor agreement is a contract between a buyer and a supplier setting out the goods or services provided, the price, payment terms and conditions of performance.](https://aavenir.com/glossary/vendor-agreement/) - [Vendor collaboration portal A vendor collaboration portal is a shared software platform where buyers and suppliers exchange orders, documents, invoices and messages in one place.](https://aavenir.com/glossary/vendor-collaboration-portal/) - [Vendor compliance Vendor compliance is a supplier meeting the requirements a buyer sets, from how orders are shipped to the legal, policy and contract standards it must follow.](https://aavenir.com/glossary/vendor-compliance/) - [Vendor contract management Vendor contract management is managing the contracts a company has with its suppliers, from sourcing and onboarding through negotiation, obligations, invoices.](https://aavenir.com/glossary/vendor-contract-management/) - [Vendor managed inventory Vendor managed inventory (VMI) is a supply agreement where the supplier takes charge of inventory decisions for stock held at the buyer's or retailer's site.](https://aavenir.com/glossary/vendor-managed-inventory/) - [Vendor management Vendor management is how an organization selects, contracts, onboards, monitors and pays its suppliers, to control cost and risk and get the service promised.](https://aavenir.com/glossary/vendor-management/) - [Vendor network management Vendor network management is running the shared environment where buyers and suppliers connect, trade, exchange documents and move goods and information.](https://aavenir.com/glossary/vendor-network-management/) - [Vendor onboarding Vendor onboarding is collecting and verifying the information needed to approve a new supplier, so your organization can contract with, buy from and pay it.](https://aavenir.com/glossary/vendor-onboarding/) - [Vendor performance review A vendor performance review is a structured assessment of how well a vendor meets its contract, measured against agreed targets and service levels.](https://aavenir.com/glossary/vendor-performance-review/) - [Vendor portal A vendor portal is a secure online system where a company and its vendors register, share documents, track orders and invoices and communicate.](https://aavenir.com/glossary/vendor-portal/) - [Vendor ratings Vendor ratings, or supplier ratings, are scores or grades given to suppliers through a formal evaluation of measures such as price, quality and delivery.](https://aavenir.com/glossary/vendor-ratings/) - [Vendor relationship management Vendor relationship management builds trust and shared value with suppliers through clear expectations, regular communication and fair terms.](https://aavenir.com/glossary/vendor-relationship-management/) - [Vendor risk assessment A vendor risk assessment identifies and rates the risks a supplier brings, such as security, financial, operational and compliance risk, and their impact on you.](https://aavenir.com/glossary/vendor-risk-assessment/) - [Vendor scorecard A vendor scorecard rates a vendor on agreed measures such as quality, delivery, cost, service and compliance, so performance can be compared and acted on.](https://aavenir.com/glossary/vendor-scorecard/) - [Vendor self service portal A vendor self service portal lets vendors update their own details, submit documents and invoices, and check order and payment status without calling.](https://aavenir.com/glossary/vendor-self-service-portal/) - [Vendor sourcing Vendor sourcing is finding, assessing and selecting the vendors that will supply the goods and services you need, at the right quality, cost and risk.](https://aavenir.com/glossary/vendor-sourcing/) - [Vendor validation Vendor validation is confirming that a supplier is legitimate and that its details are correct, so the business does not pay fake or outdated suppliers.](https://aavenir.com/glossary/vendor-validation/) ### W - [Wet signature A wet signature is a signature made by hand on a physical document with a pen or seal, the traditional way of signing a legally binding contract.](https://aavenir.com/glossary/wet-signature/) How to use it ## Look up a term, then see it in practice. ### Definitions first Every entry opens with a one or two sentence definition you can quote in a policy or a brief. ### Why it matters Each term explains where it shows up in a real contract and what goes wrong when it is missed. ### Linked to the work Entries point to the guide or product page where the term turns into a task. Next step ## See these terms tracked, not just defined. Aavenir AI finds obligations, renewal dates and liability caps in your contracts and gives each one an owner. [Schedule a demo](https://aavenir.com/demo/) Frequently asked questions (FAQ) ## Common questions ### ### What is contract lifecycle management? Contract lifecycle management, or contract lifecycle management, is managing a contract from request and drafting through approval, signature, obligations and renewal, usually on one system of record that legal, procurement and finance share. [Read the entry](https://aavenir.com/glossary/contract-lifecycle-management/). ### ### What is enterprise contract intelligence? Enterprise contract intelligence is software that reads every agreement an enterprise has signed, understands what each one says, owes and is owed, and turns that into action. [See Aavenir Atlas](https://aavenir.com/solutions/ai-contract-intelligence/). ### ### What is a contract obligation? A contract obligation is a duty one party commits to in an agreement, such as delivering a service level, keeping insurance or giving notice before renewal. [See Obligationflow](https://aavenir.com/solutions/contract-obligation-management-software/). Have a question we have not answered? [Ask the Expert](https://aavenir.com/contact/)