Glossary of ERP and distribution terms

Short, plain definitions of the terms used across these docs. Each entry notes whether it applies to Prophet 21, Epicor Kinetic, both or the distribution industry in general. Use the filter buttons to narrow the list. The definitions are ours and describe how the terms are used day to day. They are not official Epicor or standards-body definitions. When a term is covered in depth elsewhere on this site, the related guide is the better place to start.

For formulas, see the distribution KPI formula sheet.

AllIndustryEpicor KineticProphet 21 and KineticProphet 21

ABCDEFGHILMNOPRSTUVW

A

ABC analysisIndustry

Ranking items by their share of annual sales, cost of goods sold or pick volume, then grouping them into classes such as A, B and C. The classes set how often items are counted and how closely they are managed.Read the guide: ABC analysis and cycle counting

Access scopeEpicor Kinetic

A Kinetic security object that narrows what a caller can reach, such as a set of services, BAQs or functions. Assigning one to an API key limits the damage a leaked key can do.Read the guide: Calling the Kinetic REST v2 API

Advance ship notice (ASN)Industry

An electronic notice, X12 transaction set 856, that tells the customer what is in a shipment before it arrives: cartons, items, quantities and tracking. Late or wrong ASNs often trigger chargebacks. Also called: 856.Read the guide: EDI for distributors

API keyEpicor Kinetic

A key sent in the x-api-key header on Kinetic REST v2 calls. It identifies the calling application, not the user, and is used alongside normal user authentication.Read the guide: Calling the Kinetic REST v2 API

Application StudioEpicor Kinetic

The tool for changing Kinetic browser screens. Changes are saved as layers on top of the base application instead of edits to it.Read the guide: Epicor Functions, BPMs or customizations?

B

BackorderIndustry

The part of a customer order that could not ship because stock was short, kept open to ship when stock arrives. A backorder is a promise still owed to the customer, not a cancelled sale.Read the guide: Fill rate, OTIF and backorder rate

BAQ (Business Activity Query)Epicor Kinetic

A query designed inside Kinetic against its tables, with joins, filters, calculated fields and subqueries. BAQs feed dashboards, reports, grids and REST callers.Read the guide: BAQ fundamentals, and the calculated-field mistakes that make totals wrong

BPM (Business Process Management)Epicor Kinetic

Server-side directives that run when a business object method is called or when table data changes. Used to validate, default, block or extend standard behavior.Read the guide: Epicor Functions, BPMs or customizations?

Bridge letterIndustry

A letter from a service organization covering the gap between the end of its last SOC report period and today, stating whether controls changed. Also called: Gap letter.Read the guide: Security and data sharing with vendors

Build versus buyIndustry

The decision between creating a capability yourself and purchasing it as a product or service, weighed on fit, total cost, control and risk over several years.Read the guide: Build, buy or partner

Business objectEpicor Kinetic

A server-side service that owns a business entity, such as a sales order or customer, and exposes the methods that read and change it. REST v2 service names follow the pattern Erp.BO.{Name}Svc. Also called: BO, service.

C

Calculated fieldEpicor Kinetic

A BAQ column defined by an expression rather than read from a table. It is evaluated at the grain of the query it sits in, which is the root of most wrong totals.Read the guide: BAQ fundamentals, and the calculated-field mistakes that make totals wrong

Cash conversion cycleIndustry

The number of days between paying suppliers for inventory and collecting cash from customers for it. It equals days sales outstanding plus days inventory outstanding minus days payable outstanding. Also called: CCC.Read the guide: The cash conversion cycle

ChargebackIndustry

A deduction a customer takes from a payment for a compliance failure, such as a missing ASN, a wrong label or a late delivery. Chargebacks need tracking by reason so they can be disputed or prevented.Read the guide: EDI for distributors

CompanyBoth

The legal or accounting entity that most records belong to. In Kinetic the company ID is part of every REST v2 URL. In Prophet 21 most master and transaction tables carry a company_id column.

Complementary user entity controls (CUEC)Industry

Controls a vendor's SOC report assumes you, the customer, operate. If you do not, the vendor's controls may not protect you as described. Also called: CUEC.Read the guide: Security and data sharing with vendors

Concentration riskIndustry

The exposure created when many critical processes, or many of your vendors, depend on the same provider, so one failure stops several things at once.Read the guide: Fourth parties and concentration risk

Crystal ReportsBoth

A report designer and runtime from SAP used for printed and emailed documents. Prophet 21 transactional forms such as invoices and pick tickets are commonly Crystal designs.Read the guide: Custom transactional forms with Crystal Reports

CutoverIndustry

The planned window in which a business stops transacting in its old system and starts in the new one, including the final data loads and reconciliations.Read the guide: ERP go-live cutover checklist

Cycle countIndustry

Counting a small set of locations or items on a regular schedule instead of counting everything at once. Fast-moving or high-value items are usually counted more often.Read the guide: ABC analysis and cycle counting

D

Data directiveEpicor Kinetic

A BPM that fires on a change to a table rather than on a method call. In-transaction directives run inside the save and can change or stop it. Standard directives run after the commit.Read the guide: Epicor Functions, BPMs or customizations?

Data processing agreement (DPA)Industry

A contract that governs how a provider processes personal data on your behalf: purposes, security, subprocessors, breach notice and deletion. Also called: DPA.Read the guide: Contracts, SLAs and data rights

Days on handIndustry

How many days the current inventory would last at the recent rate of cost of goods sold. It is the days in a period divided by inventory turns for that period. Also called: DOH, days of supply.Read the guide: Inventory turns, days on hand and GMROI

Days payable outstandingIndustry

The average number of days a company takes to pay its suppliers, measured as average accounts payable divided by cost of goods sold, times the days in the period. Also called: DPO.Read the guide: The cash conversion cycle

Days sales outstandingIndustry

The average number of days it takes to collect from customers after a sale, measured as average accounts receivable divided by revenue, times the days in the period. Also called: DSO.Read the guide: The cash conversion cycle

Drop shipIndustry

A sale where the supplier ships directly to the distributor's customer, so the goods never pass through the distributor's warehouse. The distributor still buys from the supplier and invoices the customer. Also called: direct ship.

DynaChange Business RulesProphet 21

Compiled .NET code that Prophet 21 calls on defined events, such as a field changing or a window saving, to validate or set values. The code layer of P21 customization. Also called: business rules, DynaChange rules.Read the guide: DynaChange Rules, Designer, a report or an integration?

DynaChange DesignerProphet 21

The Prophet 21 tool for changing how a window looks and behaves without code: hiding, relabeling, moving or requiring fields and assigning those designs to users or roles.Read the guide: DynaChange Rules, Designer, a report or an integration?

E

Economic nexusIndustry

A state's right to require a remote seller to collect its sales tax once the seller's sales or transactions into the state pass a threshold. It followed the 2018 South Dakota v. Wayfair decision.Read the guide: Sales tax for distributors

Electronic data interchange (EDI)Industry

The exchange of business documents such as purchase orders, advance ship notices and invoices between companies in a standard machine-readable format, most often ANSI X12 in North America.Read the guide: EDI for distributors

EOQ (economic order quantity)Industry

The order quantity that balances the cost of placing orders against the cost of carrying inventory, under steady demand. In practice it is rounded to pack sizes and supplier minimums.Read the guide: Safety stock, reorder point and EOQ

Epicor FunctionsEpicor Kinetic

Named, server-side routines grouped into libraries. A published function can be called from BPMs, from Application Studio, from other functions or over REST. Also called: EFx.Read the guide: Epicor Functions, BPMs or customizations?

Exponential smoothingIndustry

A forecasting method in which each new forecast is a weighted blend of the latest actual and the previous forecast, with the weight set by a smoothing constant called alpha.Read the guide: Demand forecasting basics for distributors

F

Fan-outBoth

Row multiplication caused by joining a parent to a child table. Any parent-level amount summed after the join is counted once per child row.Read the guide: BAQ fundamentals, and the calculated-field mistakes that make totals wrong

Fill rateIndustry

The share of demand shipped from stock on the first shipment. It can be measured by line, by unit or by order, and the three give different numbers.Read the guide: Fill rate, OTIF and backorder rate

First partyIndustry

You, or in software the platform publisher itself: the people, systems and features a business owns and answers for directly, as opposed to those supplied by an outside business.Read the guide: First party and third party, explained

FOB (free on board)Industry

A term that names the point where risk in transit passes from seller to buyer. In US domestic sales FOB origin passes it at the shipping point and FOB destination at the delivery point; the Incoterms rule FOB is a different, sea-freight term.Read the guide: Landed cost, freight terms and Incoterms

Forecast biasIndustry

The average signed error of a forecast over time. A positive or negative bias shows a forecast that is consistently too low or too high, which accuracy measures alone can hide.Read the guide: Demand forecasting basics for distributors

Fourth partyIndustry

A vendor of your vendor: a subcontractor, subprocessor or cloud provider that your third party depends on, with which you usually have no contract. Also called: Subprocessor.Read the guide: Fourth parties and concentration risk

G

GMROI (gross margin return on inventory investment)Industry

Gross margin dollars earned for each dollar of average inventory held at cost. It combines margin and turns in one number.Read the guide: Inventory turns, days on hand and GMROI

GTIN (Global Trade Item Number)Industry

A GS1 number that identifies a trade item at one packaging level, such as an each or a case. The number inside a UPC barcode is a GTIN-12.Read the guide: Units of measure and packaging levels

H

HypercareIndustry

The period of close support right after go-live, typically until the first month-end close is complete, when issues are triaged daily.Read the guide: ERP go-live cutover checklist

I

IncotermsIndustry

A set of 11 three-letter trade terms published by the International Chamber of Commerce that allocate costs, tasks and risk between buyer and seller in a sale of goods. Incoterms is a trademark of the ICC.Read the guide: Landed cost, freight terms and Incoterms

Independent software vendor (ISV)Industry

A company that builds software sold for use with another publisher's platform, such as an add-on for an ERP. Its product is third party to both you and the platform publisher. Also called: ISV.Read the guide: ERP add-ons and independent software vendors

InterchangeIndustry

The fee the card issuer earns on each card transaction, set by the card networks and paid by the merchant through its processor. It is usually the largest part of the cost of accepting cards.Read the guide: Credit card fees and surcharges

Inventory record accuracyIndustry

The share of counted locations or items where the system quantity matches the physical count within an agreed tolerance. It measures whether the records can be trusted, not how much value was adjusted. Also called: IRA.Read the guide: ABC analysis and cycle counting

Inventory turnsIndustry

How many times average inventory is sold and replaced in a period, measured as cost of goods sold divided by average inventory at cost. Also called: inventory turnover.Read the guide: Inventory turns, days on hand and GMROI

Inventory-to-sales ratioIndustry

Inventory at the end of a month divided by sales for that month. It reads as months of supply and is published for wholesale trade by the U.S. Census Bureau.Read the guide: Inventory turns, days on hand and GMROI

Item masterProphet 21

The company-wide definition of a product in Prophet 21 (the inv_mast table). Stocking, costing and quantities per warehouse live in location-level records (inv_loc).

L

Landed costIndustry

The full cost of getting an item to where it is stocked or sold: supplier price plus inbound freight, duty, brokerage, insurance and related fees.Read the guide: Landed cost, freight terms and Incoterms

LayerEpicor Kinetic

A saved set of Application Studio changes applied over a base Kinetic screen. Because the base is untouched, layers are the upgrade-friendly way to change the UI.Read the guide: Epicor Functions, BPMs or customizations?

Lead timeIndustry

The time from deciding to replenish an item to having it available to sell. It usually covers order processing, supplier processing, transit and receiving.Read the guide: Safety stock, reorder point and EOQ

Level 3 dataIndustry

Line-item detail such as item descriptions, quantities, unit prices and tax sent with a commercial card transaction. Supplying it can qualify a B2B sale for lower interchange. Also called: Level III.Read the guide: Credit card fees and surcharges

Lot numberIndustry

An identifier for a quantity of product made or received together. Lot tracking lets a distributor trace which customers received product from a lot during a recall. Also called: batch number.Read the guide: Lot and serial traceability

M

Managed service provider (MSP)Industry

A firm that runs part or all of your IT on a recurring contract, such as help desk, devices, network, backups and security monitoring. Also called: MSP.Read the guide: Outsourced business services

MarkupIndustry

Profit expressed as a percentage of cost. A 25 percent markup on cost is a 20 percent gross margin on price.Read the guide: Pricing and margin in distribution

Master services agreement (MSA)Industry

The umbrella contract that sets the legal terms for a vendor relationship, under which individual orders and statements of work are placed. Also called: MSA.Read the guide: Contracts, SLAs and data rights

Merchant wholesalerIndustry

A wholesale business that takes title to the goods it sells, as opposed to an agent or broker that arranges sales for a commission. It is the main category in US Census wholesale statistics.Read the guide: Wholesale distribution at a glance

Method directiveEpicor Kinetic

A BPM attached to a business object method. Pre-processing runs before the method, base processing can replace it and post-processing runs after it.Read the guide: Epicor Functions, BPMs or customizations?

Middleware serverProphet 21

The Prophet 21 server tier, typically on IIS, that hosts the web client and the APIs. Sized and scaled with concurrent users and integration traffic.Read the guide: How a Prophet 21 system fits together

N

NAICSIndustry

The North American Industry Classification System, a numeric code for the industry a business belongs to. Wholesale trade is sector 42.Read the guide: Wholesale distribution at a glance

Net realizable valueIndustry

The expected selling price of inventory, less the costs to complete and sell it. Inventory valued at average cost or FIFO is written down when its net realizable value falls below cost. Also called: NRV.Read the guide: Inventory adjustments and shrink

O

ODataBoth

An open protocol for REST queries with standard options such as $filter, $select, $expand, $top and $skip. Kinetic REST v2 and parts of the Prophet 21 API follow it.Read the guide: Calling the Kinetic REST v2 API

Open quantityBoth

What is still owed on an order line or release: required or ordered quantity minus what has shipped or been canceled. Deriving it from any other quantity is a common reporting defect.Read the guide: Reading Prophet 21 data with SQL, safely

Order header and lineBoth

The two main levels of a sales order. In Prophet 21 they are oe_hdr and oe_line. Kinetic adds a third level, the release (OrderRel), below the line.Read the guide: Reading Prophet 21 data with SQL, safely

OTIF (on time in full)Industry

The share of orders or lines delivered by the promised date and in the full quantity ordered. Its value depends on how on time and in full are defined, so the definition should be stated with the number.Read the guide: Fill rate, OTIF and backorder rate

P

Play environmentProphet 21

A common name for a non-production copy of a Prophet 21 system used for testing, training and rehearsing imports. Refresh it from production before a rehearsal. Also called: test environment, sandbox.Read the guide: How a Prophet 21 system fits together

Pocket marginIndustry

The margin left after every off-invoice cost of a sale is taken out of the invoice price: rebates, freight allowances, payment terms and similar leaks.Read the guide: Pricing and margin in distribution

Professional employer organization (PEO)Industry

A firm that co-employs your staff to run payroll, benefits and HR administration, sharing some employer responsibilities with you. Also called: PEO.Read the guide: Outsourced business services

R

Read-only loginBoth

A SQL Server login mapped to a database user that can only read, used for reporting and analysis so that a mistake cannot change ERP data.Read the guide: Reading Prophet 21 data with SQL, safely

Recovery point objective (RPO)Industry

The most data, measured in time, a business can afford to lose after an outage. It decides how often database and log backups are taken.Read the guide: SQL Server care for an on-premises ERP database

Recovery time objective (RTO)Industry

The longest a business process can be down after an outage before the impact is unacceptable. It sets how fast a system or vendor must restore service. Also called: RTO.Read the guide: Vendor due diligence checklist

Reorder pointIndustry

The stock level that triggers a replenishment order. It is usually expected demand over the lead time plus safety stock. Also called: ROP.Read the guide: Safety stock, reorder point and EOQ

Resale certificateIndustry

A form a buyer gives a seller to show that goods are bought for resale, so the sale is exempt from sales tax. The seller must keep a valid, current certificate on file to support the exemption. Also called: exemption certificate.Read the guide: Sales tax for distributors

REST v2Epicor Kinetic

The current generation of Kinetic REST endpoints, rooted at /api/v2/odata/{Company}/ for business objects and BAQs. Requires an API key in addition to user authentication.Read the guide: Calling the Kinetic REST v2 API

Return merchandise authorization (RMA)Industry

A numbered approval to return goods, issued before the goods come back. It records the reason, the expected condition and whether the customer gets a credit or a replacement.Read the guide: Returns and RMAs

Return to vendor (RTV)Industry

Sending goods back to the supplier for credit or replacement, usually against the supplier's own authorization number. Unclaimed RTV credits are a common source of lost margin.Read the guide: Returns and RMAs

S

Safety stockIndustry

Extra inventory held to cover variation in demand and lead time. Its size depends on how much variation there is and on the service level you target.Read the guide: Safety stock, reorder point and EOQ

Scheduled importProphet 21

A Prophet 21 service that watches a folder for files in a defined layout and loads them through the import process on a schedule. The classic file-based integration path.Read the guide: Planning a Prophet 21 data import

Segregation of dutiesIndustry

A control that splits conflicting tasks between different people, such as setting up vendors and paying them, so no one person can commit and hide an error or fraud. Also called: SoD.Read the guide: ERP security roles and access reviews

Service creditIndustry

A partial refund or credit a provider owes when it misses an SLA. Usually capped at a small share of monthly fees and often the sole remedy for the miss.Read the guide: Contracts, SLAs and data rights

Service levelIndustry

The target chance of not running out during a replenishment cycle, or more loosely the share of demand met from stock. Say which meaning a number uses.Read the guide: Safety stock, reorder point and EOQ

Service level agreement (SLA)Industry

The measurable commitments a provider makes, such as uptime or response time, and the remedy, often a service credit, when it misses them. Also called: SLA.Read the guide: Contracts, SLAs and data rights

Ship and debitIndustry

A special pricing arrangement in which the distributor buys at standard cost, sells at an agreed lower price and then debits or claims the difference from the supplier.Read the guide: Vendor rebates and special pricing

ShrinkIndustry

Inventory that disappears between receipt and sale through theft, damage, spoilage or recording errors. Measured as the value lost as a percentage of sales or of inventory. Also called: shrinkage.Read the guide: Inventory adjustments and shrink

SKU (stock keeping unit)Industry

A distinct item a business stocks and tracks, identified by its own item number. The same product in two pack sizes is usually two SKUs.Read the guide: Units of measure and packaging levels

SOC 2 reportIndustry

An independent auditor's report on a service organization's controls for security and, optionally, availability, processing integrity, confidentiality and privacy. Type 2 tests the controls over a period. Also called: SOC 2 Type 2.Read the guide: Security and data sharing with vendors

Source code escrowIndustry

An arrangement in which a software vendor deposits its source code with a neutral agent, released to the customer if agreed events occur, such as the vendor ceasing business. Also called: Escrow.Read the guide: Contracts, SLAs and data rights

Special pricing agreementIndustry

A supplier-approved cost for selling a product to a named customer or project below the distributor's normal cost. The distributor claims the difference back from the supplier after the sale. Also called: SPA.Read the guide: Vendor rebates and special pricing

SSCCIndustry

The Serial Shipping Container Code, an 18-digit GS1 identifier for one logistic unit such as a carton or pallet. It is printed as a GS1-128 barcode and referenced in the ASN.Read the guide: EDI for distributors

Statement of work (SOW)Industry

A document under a services contract that defines the deliverables, schedule, responsibilities, assumptions and price for one piece of work. Also called: SOW.Read the guide: Contracts, SLAs and data rights

SubqueryEpicor Kinetic

A query nested inside a BAQ whose results are joined like a table. The standard fix for fan-out is to aggregate child rows in a subquery before joining.Read the guide: BAQ fundamentals, and the calculated-field mistakes that make totals wrong

SubreportIndustry

A report embedded inside another Crystal report. Each subreport usually runs its own query, so a subreport placed in a detail section can run once per row and slow the report sharply.Read the guide: Crystal Reports techniques for ERP reports

SurchargeIndustry

An extra charge added to a sale paid by credit card to recover part of the cost of acceptance. Card network rules and some state laws limit how and whether it can be applied.Read the guide: Credit card fees and surcharges

T

Third partyIndustry

An outside business you rely on to supply a product or perform a service, such as a software vendor, add-on publisher, carrier, 3PL, payment processor or consultant. Also called: Vendor, Service provider.Read the guide: First party and third party, explained

Third-party logistics (3PL)Industry

A provider that runs warehousing, fulfillment or transportation on your behalf, usually billing for storage, handling and accessorial services. Also called: 3PL.Read the guide: Logistics providers, 3PLs and carriers

Third-party risk management (TPRM)Industry

The practice of identifying, assessing, contracting for, monitoring and exiting outside relationships in proportion to the risk each one carries. Also called: TPRM, Vendor risk management.Read the guide: Third-party risk management for mid-sized companies

Total cost of ownership (TCO)Industry

Every cost of a system or service over its life: purchase or setup, recurring fees and increases, internal staff time, upgrades, integration and eventual exit. Also called: TCO.Read the guide: Build, buy or partner

Transactional formProphet 21

A document printed or sent from a transaction: invoice, pick ticket, packing list, purchase order, acknowledgement, statement. In Prophet 21 these are usually Crystal designs.Read the guide: Custom transactional forms with Crystal Reports

Transition assistanceIndustry

A contract obligation for an outgoing vendor to help move data and service to you or a new provider, usually for a set period and rate.Read the guide: Leaving a vendor

U

Unit of measureIndustry

The unit a quantity is expressed in, such as each, box, case or pound. Items have a base unit and conversion factors to the units used for buying, stocking, selling and pricing. Also called: UOM.Read the guide: Units of measure and packaging levels

Use taxIndustry

Tax owed by the buyer on taxable purchases when the seller did not charge sales tax, such as supplies bought from an out-of-state vendor. The buyer self-assesses and remits it.Read the guide: Sales tax for distributors

V

Value-added reseller (VAR)Industry

A partner that resells a publisher's software and adds services such as implementation, training and support. Often the first call for a mid-market ERP customer. Also called: Partner, Reseller.Read the guide: Choosing and working with implementation partners and consultants

Vendor compliance programIndustry

A large customer's rules for its suppliers, covering labels, ASNs, routing and timing, enforced with chargebacks when a shipment breaks them. Also called: Vendor compliance manual.Read the guide: Selling through others, and being someone else's third party

Vendor rebateIndustry

Money a supplier pays back after the sale or purchase, usually for reaching a volume target or for selling to specific customers. Rebates change the true cost of goods, so they matter for margin reporting. Also called: supplier rebate.Read the guide: Vendor rebates and special pricing

W

Web clientProphet 21

The browser-based Prophet 21 user interface served from the middleware tier, as opposed to the installed Windows desktop client.Read the guide: How a Prophet 21 system fits together

Window functionIndustry

A SQL function that calculates across a set of rows related to the current row, such as a running total or a previous-period value, without collapsing the rows as GROUP BY does.Read the guide: T-SQL patterns for ERP reporting