Procurement has its own language. Builders, trades, and suppliers use different terms to describe the same steps of a job, and digital tools introduce new concepts that aren’t always explained clearly.
This glossary is a practical reference that defines the core terms used across modern, connected procurement workflows.
Whether you’re estimating, managing suppliers, coordinating trades, or controlling costs, these definitions help you understand how information moves across the job.
This page explains why cost control is challenging and what a more reliable, predictable workflow looks like.
A
Approval Workflow
A clear sequence of steps required to approve quotes, variations, purchase orders, or scope changes.
Why it matters: Prevents bottlenecks and ensures decisions are documented.
Related: Variation management, Purchase orders
API (Application Programming Interface)
A connection method that lets two systems exchange information.
Why it matters: Enables integrations between BuiltGrid and tools like Xero or BusinessCraft.
Automation
Software-driven handling of repetitive tasks without manual effort.
Why it matters: Cuts admin time and reduces error rates in procurement.
B
Bill of Quantities (BoQ)
A detailed breakdown of materials, labour, and quantities for a project.
Why it matters: Supports accurate estimating and procurement.
Bill of Materials (BOM)
A structured list of components or products needed to complete a job.
Why it matters: Ensures suppliers and trades work from the same requirements.
Building Information Modelling (BIM)
A 3D digital model containing design, quantities, and planning data.
Why it matters: Links design decisions directly to procurement needs.
BusinessCraft
An ERP system used by builders and manufacturers.
Why it matters: BuiltGrid integrates with BusinessCraft to connect procurement with finance and operations.
C
Catalogue Management
Organising supplier products into a searchable, structured catalogue.
Why it matters: Speeds up pricing and reduces mistakes.
Compliance Documentation
Required licences, insurances, and certificates from trades or suppliers.
Why it matters: Keeps jobs compliant and reduces risk.
Connected Procurement
A workflow where builders, trades, and suppliers share one structured process for RFQs, quotes, POs, and changes.
Why it matters: Reduces delays, errors, and admin by centralising information.
Cost Codes
Project accounting codes used to track spend.
Why it matters: Links procurement activity to financial control.
Contract Management
Creating and managing contractual agreements with trades or suppliers.
Why it matters: Keeps obligations clear and reduces disputes.
D
Databuild
Estimating and construction management software.
Why it matters: Integrates with BuiltGrid to streamline data flow.
Digital Takeoff
Measuring and quantifying materials electronically from plans.
Why it matters: Speeds up estimating and improves accuracy.
Direct Procurement
Purchasing goods and services that directly affect project delivery.
Why it matters: Direct procurement has the largest impact on margin
E
E-Procurement
Electronic buying and selling of materials or trade services.
Why it matters: Forms the foundation for connected procurement.
Estimating Software
Tools for producing construction cost estimates.
Why it matters: When linked to procurement platforms, estimates flow directly into orders.
Enterprise Resource Planning (ERP)
Business systems used for finance, HR, operations, and procurement.
Why it matters: Connecting ERP and procurement ensures accurate job cost control.
F
Forecasting
Predicting future material or labour demand.
Why it matters: Helps avoid shortages and reduces risk.
Framework Agreements
Pre-negotiated supplier pricing or terms for long-term use.
Why it matters: Improves pricing accuracy and speeds up procurement.
Fulfilment
Preparing, packing, and delivering orders.
Why it matters: Poor fulfilment causes site delays and rework.
G
Gantt Chart
A visual project schedule.
Why it matters: Aligns procurement deadlines with construction milestones.
Goods Received Note (GRN)
A record confirming materials were received on site.
Why it matters: Supports reconciliation between delivery, PO, and invoice.
Gross Margin
Revenue minus cost of goods sold.
Why it matters: Procurement efficiency directly protects margin.
H
HazardCo
A safety management platform.
Why it matters: Integrates with procurement systems to ensure compliance visibility.
Hold Points
Quality checkpoints before work can progress.
Why it matters: Ensures materials and work meet required standards.
I
Integration
A technical link between systems.
Why it matters: Reduces double entry and keeps information consistent.
Inventory Management
Tracking stock and material usage.
Why it matters: Avoids over-ordering and reduces waste.
Invoice Automation
Digitised invoice processing.
Why it matters: Cuts admin and reduces errors when matching invoices to POs.
J
Job Management Software
Tools used by trades to schedule work and track progress.
Why it matters: Integrations reduce double handling between jobs and procurement.
Just-In-Time Procurement
Ordering materials only when required.
Why it matters: Reduces storage costs but requires reliable suppliers.
K
Key Performance Indicators (KPIs)
Metrics used to measure procurement or project performance.
Why it matters: Helps track efficiency and identify bottlenecks.
Knowledge Base
A digital library of process documentation.
Why it matters: Supports consistent procurement practice across teams.
L
Lead Time
Time from order placement to delivery.
Why it matters: Critical for scheduling and risk management.
Logistics Management
Coordination of transport and delivery.
Why it matters: Keeps projects moving and avoids site congestion.
Labour Productivity
Output per labour hour.
Why it matters: Procurement delays reduce productivity on site.
M
Material Takeoff (MTO)
Quantifying materials directly from design or plans.
Why it matters: Drives accurate procurement.
Milestones
Key checkpoints in a build.
Why it matters: Procurement must align with milestone timing.
Margin Erosion
Loss of profit due to inefficiencies.
Why it matters: Poor procurement contributes heavily to erosion.
N
Negotiated Tender
A direct negotiation process with a supplier rather than open tender.
Why it matters: Good for complex or specialised procurement.
Non-Conformance Report (NCR)
A record of work or materials not meeting standards.
Why it matters: Supports quality assurance and accountability.
O
Order Management
Tracking orders through placement, fulfilment, and delivery.
Why it matters: Reduces errors and improves supplier coordination.
Overheads
Indirect business costs.
Why it matters: Efficient procurement helps control overheads.
P
PriceAPlan
Estimating software.
Why it matters: Integrates with BuiltGrid to streamline quoting.
Procurement Cycle
The full end-to-end process from identifying needs to paying invoices.
Why it matters: Connected procurement shortens cycle time and reduces admin.
Purchase Order (PO)
A formal order placed with a supplier.
Why it matters: Accurate POs prevent disputes and mistakes.
Preferred Supplier List (PSL)
A curated list of approved suppliers.
Why it matters: Improves consistency and reduces risk.
Q
Quotation (Quote)
A supplier’s offer to provide goods or services at a specified price.
Why it matters: Structured quoting speeds up approvals.
Quality Assurance (QA)
Processes that ensure required standards are met.
Why it matters: Poor procurement impacts quality outcomes.
R
Request for Information (RFI)
A clarification request sent during procurement.
Why it matters: Keeps decisions documented and transparent.
Request for Proposal (RFP)
A structured request used for more complex procurement.
Why it matters: Helps evaluate suppliers on more than price.
Request for Quotation (RFQ)
A request sent to suppliers for pricing.
Why it matters: Standardised RFQs reduce delays and assumptions.
Reconciliation
Matching invoices to POs and deliveries.
Why it matters: Prevents overpayments and reduces disputes.
S
SimPRO
Job management software for trades.
Why it matters: Integrations connect job scheduling with procurement.
Specification
A detailed description of the materials or work required.
Why it matters: Clarity in specs prevents procurement errors.
Subcontractor Agreement
A contract with trade contractors.
Why it matters: Links procurement obligations to project delivery.
Supplier Relationship Management (SRM)
A structured approach to managing supplier performance and collaboration.
Why it matters: Strengthens long-term reliability.
Supply Chain Visibility
Clarity over sourcing, delivery, and fulfilment stages.
Why it matters: Supports planning and reduces risk.
T
Takeoffs
The process of quantifying materials from drawings.
Why it matters: Drives pricing and procurement accuracy.
Tender Management
Managing the process of requesting and evaluating bids.
Why it matters: Digital tendering improves speed and fairness.
Total Cost of Ownership (TCO)
The full lifecycle cost of an item.
Why it matters: Helps avoid short-term “false economy” decisions.
Trade Package
A bundle of work assigned to a specific trade.
Why it matters: Connects scope, pricing, and procurement.
U
Unit Rate
Cost per unit of material or work.
Why it matters: Essential for estimating and procurement.
User Permissions
Access controls within procurement software.
Why it matters: Protects data and ensures accountability.
V
Variation Order
A documented change to project scope or pricing.
Why it matters: Clear variation management prevents disputes.
Vendor Onboarding
The process of approving and activating a new supplier.
Why it matters: Ensures compliance and reduces risk.
Visibility Tools
Features that show real-time procurement status.
Why it matters: Improves decision-making across jobs.
W
Wunderbuild
Construction management and procurement software.
Why it matters: Part of the broader ecosystem of connected platforms.
Waste (Lean Procurement)
Any activity that adds time or cost without contributing value.
Why it matters: Connected procurement reduces procurement waste.
Workflow Automation
Digitised steps that move procurement forward automatically.
Why it matters: Reduces manual chasing and delays.
X
Xero
Cloud-based accounting software.
Why it matters: Integrations link procurement to finance in real time.
XML (Extensible Markup Language)
A structured data format used for exchanging information.
Why it matters: Allows systems to share procurement data reliably.
Y
Yield
Output relative to resources used.
Why it matters: Efficient procurement contributes to higher yield.
Z
Zero Defects
A quality goal focused on eliminating errors.
Why it matters: Accurate procurement supports defect-free delivery.
Zone Delivery
Organising deliveries by site areas.
Why it matters: Reduces congestion and improves job flow.
Closing
This glossary is a live resource. As procurement continues to digitise, new terms, tools, and workflows will emerge.
Connected procurement helps builders, trades, and suppliers work with clearer information, fewer delays, and less admin.
👉 Explore the Connected Procurement Guide
👉 See how BuiltGrid streamlines RFQs, quotes, POs, and variations