API (application programming interface)
An API is a door a piece of software leaves open so other software can ask it for information, or send information to it, without a person logging in and typing. Most modern business systems have one, from accounting software to job management and inventory apps. An API doesn't connect anything on its own; it's what an integration or connector uses to do the work.
For example, a wholesaler's online store can use the inventory system's API to check stock on hand before accepting an order, instead of someone updating stock levels on the website each morning.
Audit trail
An audit trail is the record of who changed what, and when: who created an invoice, who approved a purchase order, who edited a price. It lets you answer 'how did this number get here?' without relying on anyone's memory. It matters most when information moves between systems, because each system keeps its own trail and the gaps sit between them.
For example, a construction company can see that a supplier invoice was approved by the site manager on Tuesday and changed by accounts on Thursday, before it was paid.
Connector (sync)
A connector is a ready-made link between two specific products that copies information from one to the other, either on a schedule or as it changes. People often call it a sync. Many come from an app marketplace and are switched on rather than built. They work well when your process matches what the connector expects, and tend to fail quietly when it doesn't: records skipped, duplicated or only half copied.
For example, a trades business's job app may sync finished invoices to the accounting system but not the materials used on the job, so the job looks more profitable in one system than the other.
Data silos
Data silos are pockets of information that sit in one system, spreadsheet or inbox and don't flow to the others. Each may be accurate on its own, but nobody can see the whole picture without collecting and combining them by hand. Silos are the usual reason two reports about the same thing give different answers.
For example, a labour hire business may keep timesheets in one app, pay rates in payroll and charge rates in a spreadsheet, so the margin on each placement is only known after someone pulls all three together.
Double data entry
Double data entry is typing the same information into more than one system, such as entering a customer order in the sales system and again in the accounting software. It costs time, and every retype is a chance for a typo or a missed record, which is how systems drift apart. It is not the same as double-entry bookkeeping, the accounting method where every transaction is recorded as a matching debit and credit; that one is a good thing.
For example, a food manufacturer's office may key each delivery docket into the production system, the invoicing system and a dispatch spreadsheet.
ERP (enterprise resource planning)
An ERP is one larger system that handles several parts of the business in one place, typically some mix of purchasing, inventory, production, projects and sales, sharing the same records instead of copying them between separate apps. The trade-off is a bigger project to set up, and your processes either need to fit the system or be changed to fit it.
For example, a manufacturer might run purchasing, stock and production in an ERP, so a job's materials and labour are recorded once and flow straight through to its cost.
Integration (systems integration)
Integration means connecting separate systems so information entered in one reaches the others automatically, in the right shape and at the right time. A connector is one kind of integration; others are built to suit when no ready-made link exists or the process is unusual. A good integration also handles the awkward cases, such as changes, cancellations and errors, and tells someone when something fails.
For example, each weighbridge ticket at a quarry or port can flow straight into the invoicing system, so nobody re-types tonnages at the end of the week.
Job costing
Job costing is tracking the money in and out of each job, project or contract (labour, materials, subcontractors, equipment and overheads) against what you quoted or charged for it. It tells you which jobs make money and which don't, rather than only the business-wide total. It only works if costs are tagged to the right job when they happen, not sorted out at month-end.
For example, a builder can see on Monday that a bathroom renovation has already used most of its materials budget with the tiling still to go.
Key-person risk
Key-person risk is the exposure a business carries when one person is the only one who knows how a process, system or spreadsheet works. While they're there it usually runs fine; when they're on leave, sick or move on, the work stalls or mistakes creep in. The fix is usually to write it down, simplify it and move it out of one person's head or private spreadsheet.
For example, a cleaning company's payroll may depend on one person who knows which spreadsheet columns to adjust for weekend and public holiday rates.
Landed cost
Landed cost is the full cost of getting stock into your warehouse and ready to sell: the supplier's price plus freight, insurance, customs duty, brokerage and other charges. If stock is valued at the supplier price alone, margins look better than they really are. The tricky part is that those extra charges often arrive on separate invoices, weeks after the goods.
For example, a wholesaler importing a container of homewares spreads the shipping and customs bills across every product in it, so each item shows what it really cost to land.
Legacy system
A legacy system is older software the business still depends on but which is hard to change, connect or support, because the vendor has stopped updating it, the original developer has gone, or it was built for how the business used to work. It often still does its core job well, which is why it's kept. The risk builds quietly until something forces a change.
For example, a transport company might still quote and dispatch from an Access database built years ago that nobody wants to touch.
Master data
Master data is the core reference records the business runs on: customers, suppliers, products, staff, jobs and sites. Getting it right means one agreed record for each, one place where it is created and changed, and every system using that same record. When each system keeps its own version, you get duplicates, old addresses and prices that don't match.
For example, a food wholesaler that sets up each new customer once, in one system, with the other systems picking it up, avoids having 'Smith's Cafe' and 'Smiths Café Pty Ltd' as two different customers.
Near-real-time reporting
Near-real-time reporting means your reports are updated within minutes or hours of the work happening, not weeks later after month-end. It doesn't need to be live to the second; it needs to be fresh enough to act on while there's still time to change the outcome. It depends on information being captured once, where the work happens, and flowing through without waiting for someone to re-key it.
For example, a construction company can see this week's costs against each job's budget on Friday, instead of finding an overrun when the month's accounts close.
Process mapping
Process mapping is drawing out how a piece of work actually moves through the business, step by step: who does what, in which system, and what gets handed to whom. It's best done with the people who do the work, and it often uncovers steps nobody knew were there, such as re-keying, waiting and workarounds. It's the starting point for fixing a process before buying or building anything.
For example, mapping a trades business's jobs from first call to paid invoice might show that finished jobs wait days for paperwork before they can be invoiced.
RCTI (recipient-created tax invoice)
An RCTI is a tax invoice the buyer creates on behalf of the supplier, instead of the supplier sending one. It's common where the buyer knows the amount owing first, such as payments to subcontractors, owner-drivers or growers. The ATO has rules about when RCTIs can be used and what they must show, so check the requirements before setting them up.
For example, a business paying owner-drivers can issue each driver an RCTI every week from completed runs, instead of waiting for every driver to send an invoice.
Reporting layer (dashboard)
A reporting layer pulls figures from all your systems into one place, tidies them up and presents them as reports and dashboards, without anyone copying and pasting into a spreadsheet. The dashboard is the screen you look at; the reporting layer is the plumbing behind it that keeps the numbers consistent. Tools such as Power BI are often used for this.
For example, a cleaning company can see revenue, labour cost and margin for each contract on one screen, drawn from its rostering, payroll and accounting systems.
Single source of truth
A single source of truth is one agreed place everyone takes a number or record from, so there's only one answer to 'what's the figure?'. It doesn't have to mean one system for everything: each piece of information has one home, and other systems and reports read from that home rather than keeping their own copy. Once you have it, meetings stop being arguments about whose spreadsheet is right.
For example, a construction company decides that committed costs live in the job system, and the WIP report, the cash flow forecast and the board pack all read from there.
SOP (standard operating procedure)
An SOP is a short written description of how a regular task is done in your business: the steps, who does them, which system they use and what 'done' looks like. Good SOPs are written for the person doing the job, kept short, and updated when the process changes. They're the simplest protection against key-person risk, and a must before automating anything.
For example, a food business might have an SOP for receiving deliveries: check temperatures, match the delivery to the purchase order, record any shortages, then file the docket.
WIP (work in progress)
WIP is the value of work that has been started but not yet finished or fully billed. A WIP report compares, job by job, what has been spent, what has been claimed or invoiced and how far through the job really is, so you can see where you're over- or under-billed. It's central in construction, and just as useful for any business that bills by project.
For example, a builder's WIP report might show a job is half complete but only a third has been claimed: money the business has earned but not yet asked for.
Workflow automation
Workflow automation means letting software carry out the routine, rule-based steps of a process: moving information along, sending it for approval, chasing it when it stalls and filing it when it's done. People still make the decisions that need judgement; the automation handles the passing around. It works best on a process that has already been mapped and simplified, otherwise you just automate the mess.
For example, a wholesaler's supplier invoices can be matched to purchase orders automatically, with only the ones that don't match sent to a person to check.
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