Business operations
glossary.

A visual project scheduling tool that maps tasks, milestones, and dependencies as horizontal bars across a timeline. Gantt charts show what needs to happen, in what order, and by when - giving teams a shared view of schedule and progress.

An internal document confirming that goods from a supplier order have been physically received and checked against the original purchase order. Forms the third document in three-way matching alongside the PO and supplier invoice.

The difference between revenue and the direct costs of delivering a product or service, expressed as a percentage of revenue. Gross margin shows how much money remains after covering cost of goods sold before overheads are deducted.

Gross profit is revenue minus the direct costs of producing or delivering your goods and services. It shows how much is left to cover operating expenses before arriving at net profit.

A handover pack is the bundle of documents and certificates given to a customer at project completion - including completion certificates, compliance records, O&M manuals, as-built drawings, and warranties. It frequently triggers the final payment milestone.

A legally binding contract between an equipment owner and a hirer that defines the hire period, rates, permitted use, liability for damage or loss, and return conditions. Standard practice in AV, events, and plant and equipment hire businesses.

Incoterms are eleven standardized ICC trade rules that define who pays for freight, arranges customs clearance, provides insurance, and bears the risk of loss at each stage of an international shipment between buyer and seller.

A periodic assessment of work completed on a construction project, used to calculate the amount due for an interim payment from the client to the contractor. Required by law on contracts exceeding 45 days in duration.

A confidential finance facility that lets a business release cash against its unpaid invoice book - typically 80-90% of outstanding value - while retaining full control of credit management and customer relationships. Customers are unaware of the arrangement.

A short-term funding arrangement where a business releases cash from its outstanding sales invoices before customers pay, typically receiving 70-90% of the invoice value within 24-48 hours from a specialist lender.

A physical or digital folder holding all documents for a specific production order, including the client brief, approved artwork, decoration specification, supplier purchase orders, and delivery instructions.

A method of recording all costs - labor, materials, and overhead - against a specific job or project. Shows whether individual jobs are profitable and where actual costs exceeded or came in under the original estimate.

A central record linking all cost, revenue, and operational information for one customer order or project. Connects the accepted quote, purchase orders, works orders, delivery notes, and invoices under a single job reference number.

Job scheduling is the process of allocating work tasks, people, and equipment to specific jobs and time slots, ensuring the right resource is assigned to each job at the right time across a business's active workload.

A document given to a field operative before a site visit, summarizing scope of work, materials required, hours allocated, safety requirements, and what must be signed off on completion. Used in electrical, plumbing, construction, and AV service businesses.

A stock and purchasing strategy where materials or goods are ordered and received only when they are needed, rather than held in bulk. JIT reduces storage costs and frees working capital but requires reliable supplier relationships.

A Key Performance Indicator (KPI) is a quantifiable measure that tracks whether a business is on course to meet a specific objective. Unlike general metrics, a KPI is tied to a defined goal, a target value, and a regular review schedule.

A key account is a customer the business has decided to serve on standing agreed terms - a fixed price list, named contacts, agreed lead times and set credit terms - rather than negotiating each order separately.

The process of assembling multiple individual items into a single packaged set ready for dispatch. Common in promotional merchandise and AV hire, kitting requires coordinating inbound components from multiple suppliers against a single outbound delivery deadline.

The process of assigning estimated labor hours to specific jobs, tasks, or cost codes before work begins, then tracking actual hours worked against those estimates to measure efficiency and protect job profitability.

The hourly or daily cost figure used to price labour in quotes and job estimates. It comes in two forms: the internal cost rate of employing a worker, and the charge-out rate billed to the customer.

The total cost to acquire goods and take delivery of them at your location. Landed cost includes the supplier's quoted price plus international freight, import duties, port and handling charges, and any currency conversion costs - giving the true cost per unit before margin is applied.

Lead conversion rate is the percentage of leads that become paying customers, calculated by dividing converted leads by total leads received and multiplying by 100. It measures how effectively the early sales process turns enquiries into orders.

Lead generation is the process of identifying potential customers and capturing enough contact detail to start a sales conversation. It comes before qualification, scoring and nurturing, and produces the raw material the rest of the sales process works on.

The process of maintaining regular, relevant contact with potential customers who are not yet ready to buy, building trust over time so that your business is the natural choice when they are ready to make a purchasing decision.

Lead qualification is the process of assessing whether an incoming inquiry has genuine potential before investing time in a formal proposal. It evaluates budget, authority to purchase, specific need, and confirmed timeline.

A methodology that ranks sales prospects by assigning numerical values to their attributes and behaviors, helping sales teams prioritize outreach and focus effort on leads most likely to convert.

Lead time is the total time between placing an order with a supplier and receiving the goods. It covers the supplier's production schedule, transit time, and handling, and determines when a job can start or progress.

A document issued by a client to a contractor confirming the intention to enter a formal contract, while authorizing a limited scope of preliminary work to proceed before that contract is executed.

A pre-agreed financial penalty written into a construction contract - a fixed daily or weekly sum payable when a contractor misses the agreed completion date. Set at tender stage to give both parties certainty about the cost of delay without requiring litigation.

A product or service intentionally priced below cost to attract a new customer, with the expectation that follow-on orders or higher-margin work will recover the initial financial loss.

A claim made by a contractor or sub-contractor to recover direct financial costs caused by employer-initiated delays, disruptions, or changes during a construction project. Loss and expense claims are a standard feature of JCT and other construction contracts.

The complete lighting unit comprising the light source, housing, driver or ballast, and optical components that control and distribute light into a space. Also called a light fitting or light fixture in everyday usage.

A lump sum is a single agreed price for the full scope of a construction project or trade contract. The contractor bears cost risk - if actual costs exceed the lump sum, the contractor absorbs the difference.

An MCS certificate is the document an MCS certified installer raises on the MCS Installations Database and gives to the customer within 10 working days of commissioning a small-scale renewable installation such as solar PV, a heat pump or battery storage. It is the proof energy suppliers ask for before paying Smart Export Guarantee rates.

MCS certification - the Microgeneration Certification Scheme - is the UK quality mark for small-scale renewable energy, certifying both installers and products for solar PV, heat pumps, battery storage, and other low-carbon technologies.

Internal financial reports prepared monthly or quarterly to help business owners and managers track performance, monitor cash flow, and make informed decisions. Unlike year-end statutory accounts, they are not a legal requirement and are not filed with Companies House or HMRC.

The gradual reduction of gross or net profit margins over time, typically driven by cost increases, pricing pressure, discounting, or operational inefficiency that is not offset by equivalent gains in revenue or productivity.

Markup calculates profit as a percentage of cost; margin calculates profit as a percentage of selling price. A 25% markup produces a 20% gross margin - not 25%. Confusing the two leads to systematic underpricing across every job in a project-based business.

A master service agreement is a framework contract that sets the standard legal and commercial terms for a business relationship, so individual projects can be confirmed through shorter statements of work without renegotiating legal terms from scratch each time.

A document that describes, step by step, how a specific work activity will be carried out safely, covering the hazards identified, the control measures to be applied, the equipment and PPE required, and the personnel responsible.

A defined event in a project marking the end of a phase or acceptance of a deliverable. Milestones trigger stage payments, authorize next phases, or confirm handover. They are completion events, not tasks or durations.

The lowest number of units a supplier will accept in a single order. MOQs recover fixed setup and tooling costs regardless of run length. In promotional merchandise, MOQs determine which products are viable for small campaigns and shape inventory purchasing decisions.

The process of deploying the people, equipment, and resources required to start a phase of work on site, including site setup, equipment transport, workforce briefing, and temporary facility installation before productive work begins.

The percentage of total revenue left as profit after all costs - direct costs, overhead, tax, and interest - are paid. Calculated by dividing net profit by total revenue. The most complete measure of whether a business is actually profitable.

Net terms are a deferred payment agreement in B2B invoicing that specifies when a buyer must pay after receiving goods or services. Net 30, Net 60, and Net 90 refer to the number of calendar days allowed before payment is due from the invoice date.

On-time in full (OTIF) measures whether orders are delivered on schedule and complete. Both the delivery date and the full quantity must be met - partial deliveries or late shipments both count as failures against the metric.

A contract arrangement where the contractor shares actual cost records with the client throughout a project. The client pays verified direct costs plus an agreed margin for overhead and profit, rather than a fixed price set at tender.