The Procurement Glossary » Enterprise Resource Planning (ERP)
Enterprise Resource Planning (ERP)
Technology & Systems
Also known as: ERP
Definition
An integrated software system that manages core business processes — finance, procurement, inventory, HR — on a shared database.
Explanation
ERP systems provide the transactional backbone for purchasing: purchase orders, goods receipts, invoices and the general ledger. Procurement tools often integrate with ERP so sourcing and supplier data flow into the system of record without re-keying.
Example
Approved purchase orders sync automatically from the procurement platform into the ERP for goods receipt and payment.
Related terms
- General Ledger (GL) — The central accounting record holding all of a company's financial transactions.
- API Integration — Connecting two software systems through an application programming interface so they can exchange data automatically.
- Purchase Order (PO) — A buyer's official document authorising a purchase from a supplier, stating items, quantities, prices and terms; once accepted it forms a contract.
- Three-Way Matching — An invoice-control check comparing the purchase order, the goods-receipt record and the supplier invoice before payment.
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Frequently Asked Questions
What is Enterprise Resource Planning (ERP)?
An integrated software system that manages core business processes — finance, procurement, inventory, HR — on a shared database. ERP systems provide the transactional backbone for purchasing: purchase orders, goods receipts, invoices and the general ledger. Procurement tools often integrate with ERP so sourcing and supplier data flow into the system of record without re-keying.
Can you give an example of Enterprise Resource Planning (ERP)?
Approved purchase orders sync automatically from the procurement platform into the ERP for goods receipt and payment.
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