Skip to main content

Voldemort

Menu
Book a demo
procurement glossary

Procurement Glossary: Key Terms Explained

Your go-to glossary for procurement terms and definitions. Understand purchase orders, purchase requisitions, goods receipt (GRN), three-way matching, invoice matching, sourcing terms, and supplier management terminology—so your teams can work with clarity and confidence.
Explore the Platform
Jump to Terms
A–Z reference terms
End-to-end workflow coverage
Linked deep-dive resources
Practitioner-built insights
Office Supplies RFPs 5,260 MRO RFPs 3,118 Janitorial RFPs 1,904 Safety & PPE RFPs 2,441 IT Hardware RFPs 1,842 Lab Supplies RFPs 906 Furniture RFPs 712 Software & SaaS RFPs 1,356 Facilities & Maintenance RFPs 1,528 Professional Services RFPs 987 Logistics & Freight RFPs 1,203 Marketing Services RFPs 654 Telecom & Connectivity RFPs 841 Fleet & Vehicles RFPs 439 Packaging RFPs 568 Construction & Trades RFPs 1,077
Find the term you need
Search our comprehensive list of procurement definitions.

Purchasing & Requisitioning Terms

Key terms for initiating and authorizing purchases.

View all in this section

Purchase Requisition

A formal request submitted by an internal user to procure goods or services. It captures what's needed, the quantities, and preferred suppliers, and triggers the approval workflow before any purchase order is created. A requisition is only an internal ask — it creates no obligation to a supplier.

Related workflow: Purchase Requisition Software

Purchase Order

A legally binding document issued by a buyer to a supplier, specifying the goods or services, quantities, prices, terms, and delivery details. It authorizes the supplier to deliver. Unlike a purchase requisition, a PO is an external commercial commitment, not just an internal request.

Related workflow: Purchase Order Software

Approval Workflow

The structured path of reviews and approvals that a requisition or purchase order follows, based on policy, spend thresholds, roles, and delegation rules. A well-designed approval workflow enforces spending policy and keeps a clear audit trail, without slowing down legitimate purchases.

Related workflow: Approval Workflow Software

Purchase Requisition vs Purchase Order

Quick comparison
Purchase Requisition
  • Internal request to fulfill a need
  • Not a legal commitment
  • Requires approval before PO
Purchase Order
  • External commitment to supplier
  • Legally binding document
  • Authorizes delivery of goods/services

Receiving & Invoicing Terms

Terms that govern receipt of goods and invoice validation.

View all in this section

Goods Receipt (GRN)

A confirmation that goods (or completed services) have been received, verifying that the quantity and condition match what the purchase order specified. The GRN becomes the basis for invoice verification — without it, an invoice can only be checked against what was ordered, not what actually arrived.

Related workflow: Invoice Processing

Three-Way Matching

The process of matching the purchase order, the goods receipt (GRN), and the supplier invoice to ensure accuracy before payment is approved. If the three don't align within tolerance, the invoice is flagged for review instead of paid automatically — one of the strongest controls against overbilling and duplicate payments.

Related workflow: Invoice Processing

Invoice Matching

Validation of a supplier invoice against the purchase order and, where applicable, the goods receipt (or a service entry for non-PO spend), to detect discrepancies before payment is released. Two-way matching checks the invoice against the PO only; three-way matching adds the GRN for a stronger control.

Related workflow: Invoice Processing

Sourcing & Bidding Terms

Common terminology for sourcing events and supplier selection.

View all in this section

RFP

Request for Proposal. A formal document inviting suppliers to propose a solution to a defined business need, typically covering approach, qualifications, pricing, and timeline. Used when the buyer knows the problem but wants suppliers to propose how to solve it.

RFI

Request for Information. Used to collect information about suppliers' capabilities, experience, and solutions ahead of a more formal sourcing event. An RFI helps narrow a supplier list and understand the market before committing to an RFP or RFQ.

RFQ

Request for Quotation. Invites suppliers to quote prices for a clearly defined, already-specified item or service. Unlike an RFP, an RFQ is used when the requirement itself is settled and price is the main differentiator.

Sealed Bidding

A competitive process where suppliers submit confidential bids that stay unopened until a specified deadline, at which point every bid is opened and evaluated together. Common in public-sector and formal competitive procurement, sealed bidding is designed to prevent bid-shopping.

Go deeper: RFx Process Guide

Understand RFx processes, best practices, and evaluation methods.

Explore Guide
Related concepts:Strategic SourcingeAuctionsSupplier Selection

Supplier & Risk Terms

Terms related to supplier performance, risk, and spend governance.

View all in this section

Supplier Qualification

The process of evaluating a supplier's capabilities, certifications, financial stability, and compliance to determine eligibility to do business. Qualification typically happens before a supplier can bid or receive a purchase order, and is often revisited periodically.

Related workflow: Supplier Management

Maverick Spend

Purchases made outside approved suppliers, contracts, or purchasing processes — for example, buying directly from a non-contracted vendor instead of using a supplier with negotiated pricing. It typically leads to higher costs and weaker compliance visibility, which is why reducing it is a common procurement KPI.

Related workflow: Procurement Analytics

Spend Under Management

The percentage of an organization’s total spend that flows through approved processes and contracted suppliers, rather than being made ad hoc. A higher percentage generally signals stronger policy compliance, negotiating leverage, and cost control.

Related workflow: Procurement Analytics
Frequently asked questions
A purchase requisition is an internal request to buy something — it starts the process but creates no obligation to a supplier. A purchase order is the external, legally binding document sent to a supplier once the requisition is approved. In short: a requisition asks permission internally; a purchase order commits externally.
A GRN confirms that ordered goods or services were actually received, in the quantity and condition expected. It's the second leg of three-way matching — without a GRN, an invoice can only be verified against what was ordered, not against what was actually delivered.
Three-way matching compares the purchase order, the goods receipt (GRN), and the supplier invoice before payment is approved. If the three don't agree within tolerance, the invoice is flagged instead of paid automatically — one of the most effective controls against overbilling, duplicate payments, and invoice errors.
An RFI (Request for Information) gathers general information about potential suppliers before a formal event. An RFP (Request for Proposal) asks suppliers to propose a solution to a defined need. An RFQ (Request for Quotation) asks for pricing on an already-specified item or service. See our RFx Process Guide for the full comparison.
Maverick spend is any purchase made outside approved suppliers, contracts, or purchasing processes — for example, buying directly from a non-contracted vendor. It typically costs more, forfeits negotiated pricing, and reduces compliance visibility, which is why reducing it is a common procurement KPI.
No. In sealed bidding, suppliers submit confidential bids once, which are opened and evaluated together after a fixed deadline. In a reverse auction, suppliers can see their competitive standing and revise their price in real time while the event runs. Both are competitive sourcing formats, but they run very differently.