Business operations
glossary.

kWp means kilowatt peak: the rated power output of a solar panel or array under standard test conditions. It is how UK solar systems are sized, quoted and registered with the network operator, and it is a laboratory maximum rather than what the roof produces on an average day.

A supplier scorecard is a structured tool for measuring and tracking supplier performance against criteria such as on-time delivery, order accuracy, product quality, and pricing adherence.

A supplier statement is a document a supplier sends periodically, usually monthly, listing every invoice, credit note and payment on your account and ending at the balance it believes you owe. It is checked against your purchase ledger rather than paid from.

A contracting arrangement in which the contractor both supplies all required materials and carries out the installation, taking full responsibility for material costs, sourcing, and quality under a single combined price.

A formal competitive process in which a buyer invites contractors or suppliers to submit priced proposals for a defined project. The buyer issues an invitation to tender (ITT) with scope, specifications, and a deadline; respondents submit bids for evaluation before contract award.

Three-way matching is an accounts payable control that compares a purchase order, delivery note, and supplier invoice to confirm all three agree before payment is authorized. It prevents overpayments and catches delivery discrepancies before they cost your business money.

A billing arrangement where a contractor charges for all labor hours at a pre-agreed rate plus the actual cost of materials used, typically with a markup, rather than agreeing a fixed total price before work begins.

The full cost of acquiring, operating, maintaining, and disposing of a product or service over its useful life. TCO analysis looks beyond the purchase price to include freight, quality failures, maintenance, and disposal costs.

An arrangement where a supplier provides goods or services now and allows the buyer to pay within an agreed period - typically 30, 60, or 90 days from the invoice date. Trade credit is the most common form of short-term financing between businesses.

A trade discount is a reduction from a supplier's list price given to trade buyers - resellers, contractors, and distributors - based on the commercial relationship. It is applied before invoicing and does not appear as a separate line item on the invoice.

The total elapsed time from receiving a customer request or order to delivering the completed output. Includes internal processing time, supplier lead time, and transit - not just production time.

A turnkey contract is an agreement where a contractor takes full responsibility for designing, procuring, installing, and commissioning a complete project or system, handing the client a fully operational result at a single agreed price.

The total income a business generates from selling goods or services over a set period, usually a financial year, before costs are deducted. Calculated excluding VAT. Also referred to as revenue or sales income.

A unit rate is a fixed price per measurable unit of work - such as per square metre, per cubic metre, or per item installed. The total cost is calculated by multiplying the rate by the actual quantity of units completed.

The practice of offering a customer a higher-value product, premium variant, or additional service at the point of quoting or ordering, increasing average order value without the cost of acquiring a new customer.

The percentage of available capacity - equipment hire days or staff billable hours - that actively generates revenue in a measured period. The primary efficiency metric for hire businesses and service teams.

A systematic process of reviewing project components, materials, and methods to find alternatives that deliver equivalent function at lower cost or improved performance at the same budget, without compromising quality or client requirements.

The inventory of materials and parts carried in a field operative's service vehicle. Van stock allows jobs to be completed on site without a separate parts order or a return trip to a depot, supporting higher first-time fix rates.

A variable cost is a business expense that rises and falls in direct proportion to output or sales volume. Variable costs only arise when the business is producing or fulfilling orders - when no work is done, variable costs are zero.

A variation order is a written instruction that authorizes and prices a change to the agreed scope, cost or programme of a project. It records what was instructed, by whom, and at what price, before the additional work starts.

A supply chain arrangement where the supplier monitors the buyer's stock levels and takes responsibility for replenishment, shipping goods when inventory falls below an agreed minimum without waiting for the buyer to raise a purchase order.

A pricing reduction offered to customers who order above a set quantity threshold. The more units ordered, the lower the price per unit. Volume discounts are standard in promotional merchandise, construction materials, and office furniture procurement.

A sales forecasting method that multiplies each open opportunity's value by its estimated closing probability, giving a more realistic revenue forecast than the raw total of all open deals.

Wet hire is hiring equipment together with an operator supplied by the hire company. The operator stays the supplier's worker for the duration, which is what separates wet hire from dry hire and what decides where responsibility sits.

Win rate is the percentage of active sales opportunities - qualified leads or submitted quotes - that result in a confirmed order. It measures how effectively a business converts prospects into customers and is tracked as a key indicator of sales process health.

The difference between a business's current assets (cash, outstanding invoices, stock) and its current liabilities (supplier invoices, short-term obligations). A positive working capital position means the business has enough liquid resource to fund operations without relying on credit.

A works programme is the master schedule document for a construction project, setting out the sequence, timing, and duration of every work package, trade activity, and project milestone from site mobilization through to practical completion.

The total value of jobs that have been started but not yet completed and invoiced. WIP represents costs already committed on active projects before revenue is recognized or payment collected from the customer.

A works order is an internal document instructing a team, workstation or sub-contractor to carry out defined work on a specific job, stating the work, the materials, who is responsible and the dates. It is signed off when the work is complete.

An accounting entry that removes an unrecoverable debt or asset from the balance sheet. In business operations, it most commonly applies to customer invoices that cannot be collected after all recovery efforts have been exhausted.