VERIFONE USER PROCESSES Process Name: Acronyms & Definitions Document Number: VFI_EF06.1 Approved by: Acronyms & Definitions i_VUPT For Entity/Department: INC Focus Area: VeriFone Order to Cash Revision: 0 First Issued: 08/09/2011 Last Revised: 1. Acronyms & Definitions – The definitions in this glossary are meant to provide you with information about various acronyms and definitions used within VeriFone. The acronyms and definitions within this interaction are defined while explaining to the degree of functional information required for order processing job functions. a. COGS – COGS stands for Cost of Goods Sold. i. Cost of goods sold is a valuation that is comprised of costs including all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of goods made by the business include material, labor, and allocated overhead. b. CSR – CSR stands for Customer Service Representative. i. This acronym CSR is near synonymous with OA/OE/SSR. ii. As well, CSR is utilized within Oracle Application to assign to users a given dollar limit process, whereby applies a VFI Order Review Hold to an SO. c. DOA – DOA stands for Dead on Arrival. i. DOA is a term that describes equipment that fails, before or at the time of installation. DOA is subject to a time limit of 90 days from the ship date. If DOA is reported after 90 days from shipment, the CSR/OA/OE/SSR must receive regional controller approval before entering DOA SO. d. DPL – DPL stands for DENIED/RESTRICTED PARTIES LIST (MK Data's Denial List Service) i. The DPL identifies companies, countries, or persons that we are not allowed to do business. The DPL in the United States is controlled by the Bureau of Industry and Security. e. Floor – Floor is short for Floor Limit. i. The Floor Limit is the lowest sales price an item may be sold without regional controller approval. f. Freight Terms - Freight Terms equates to who pays and handles transportation. g. GM – GM stands for Gross Margin. i. Gross margin is the difference between revenue and cost. Gross margin is calculated by subtracting the COGS from the selling price and is typically expressed as a percentage. VFI_UC06.1 Acronyms & Definitions Page 1 h. Incoterms – Incoterms equates to where in the shipping process, risks and ownership transfer between the seller and the buyer. i. Incoterms stands for International Commercial Terms. Incoterms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions. ii. A series of three letter trade terms related to common sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods. iii. The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in the international trade. iv. They are intended to reduce or remove altogether, uncertainties arising from different interpretation of the rules in different countries. v. Incoterms are most frequently listed by category. 1. Terms beginning with F refer to shipments where the primary cost of shipping is not paid for by the seller. 2. Terms beginning with C deal with shipments where the seller pays for shipping. 3. Terms beginning with E occur when a seller's responsibilities are fulfilled when goods are ready to depart from their facilities. 4. Terms beginning with D cover shipments where the shipper/seller's responsibility ends when the goods arrive at some specific point. Because shipments are moving into a country, D terms usually involve the services of a customs broker and a freight forwarder. In addition, D terms also deal with the pier or docking charges found at virtually all ports and in determining who is responsible for each charge. vi. Ownership for a shipment will determine when VeriFone will recognize the sale. i. Incoterms – DDP – DDP means Delivered Duty Paid (aka Destination). i. DDP terms tend to be used in intermodal or courier-type shipments. This is an Incoterm whereby, the shipper/seller is responsible for dealing with all of the tasks involved in moving goods from the manufacturing plant to the buyer/consignee’s door. It is the shipper/seller’s responsibility to insure the goods and absorb all costs and risks, including the payment of duty and fees. j. Incoterms – DDU - DDU means Delivered Duty Unpaid. i. “Delivered duty unpaid” means that the seller fulfills his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities. The buyer has to pay any additional costs and to bear any risks caused by his failure to clear the goods for import in time. VFI_UC06.1 Acronyms & Definitions Page 2 k. Incoterms – EXW – EXW stands for Ex Works. (aka Origin/Ship Point within USA/Domestic) i. One of the simplest and most basic shipment arrangements places the minimum responsibility on the seller with greater responsibility on the buyer. ii. In an Ex-Works transaction, goods are basically made available for pickup at the shipper/seller’s factory or warehouse and ‘delivery’ is accomplished when the merchandise is released to the consignee’s freight forwarder. The buyer is responsible for making arrangements with their forwarder for insurance, export clearance and handling all other paperwork. iii. If a US Domestic PO is submitted to VeriFone without defined IncoTerms/FOB Terms, the default is Ship Point as per the UCC (Uniform Commercial Code). l. Incoterms – FOB FOB stands for Free on Board. i. One of the most commonly used-and misused-terms, FOB means the shipper/seller uses his freight forwarder to move merchandise to the port or designated point of origin. Though frequently used to describe inland movement of cargo, FOB specifically refers to ocean or inland waterway transportation of goods. ii. "Delivery" is accomplished when the shipper/seller releases the goods to the buyer's forwarder. The buyer's responsibility for insurance and transportation begins at the same moment. Within VeriFone Oracle Application FOB is represented as an IncoTerm dropdown Field. m. OA – OA stands for Order Administration. i. This acronym OA is near synonymous with CSR/OE/SSR. n. OCA – OCA stands for Order Compliance Administrator i. The order Compliance Administrator is the VeriFone regional audit authority. Their purpose is to ensure all orders meet internal and external compliance structures. o. OE – OE stands for Order Entry. i. This acronym OE is near synonymous with CSR/OA/SSR. ii. As well, OE is utilized to refer to Oracle Application Order Entry user navigation p. Oracle Ship Priority i. Depicts Order Service Level (i.e. Regular Order, Expedited, Contracted customer, or Deployment) to the warehouse and to what location the Shipment Transaction Delivery Number ticket drops to print. q. Origin –When goods are purchased F.O.B. origin, title to the goods passes to the consignee upon delivery of the shipment to the carrier at point of origin. r. PO – PO stands for Purchase Order. i. PO is the customer request for products and/or services entered by CSR/OA/OE/SSR. ii. As well, PO is utilized to relate to the Verifone Purchasing/Procurement Team submitting PO to our suppliers although this definition is not discussed in this Module. VFI_UC06.1 Acronyms & Definitions Page 3 s. POD – POD stands for Proof of Delivery. i. Proof of delivery is a method to establish the fact that the recipient received the contents sent by the sender. t. QC – QC stands for Quality Control. i. These are the steps taken by CSR/OA/OE/SSR users to ensure processes are adhered to beyond SOX. This function is also performed by OCA. u. SEC – SEC stands for Securities and Exchange Commission. i. The SEC (US) is the primary federal regulatory agency for the securities industry, whose responsibility is to promote full disclosure and to protect investors against fraudulent and manipulative practices in the securities markets. v. Ship Point - stands for the buyer takes delivery of goods being shipped to it by a supplier once the goods leave the supplier's shipping dock. Since the buyer takes ownership at the point of departure from the supplier's shipping dock, the supplier should record a sale at that point. w. SO – SO stands for Sales Order. i. A sales order is created as a direct result of a PO. A SO may comprise all or part of the PO. x. SOX – SOX stands for Sarbanes-Oxley Act. i. The Sarbanes-Oxley Act of 2002 created new standards for corporate accountability as well as new penalties for acts of wrongdoing. It changes how corporate boards and executives must interact with each other and with corporate auditors. It removes the defense of "I wasn't aware of financial issues" from CEOs and CFOs, holding them accountable for the accuracy of financial statements. The Act specifies new financial reporting responsibilities, including adherence to new internal controls and procedures designed to ensure the validity of their financial records. y. SSR - SSR stands for Sales Support Representative. i. The acronym SSR is near synonymous with CSR/OA/OE. 2. Prepared By Document Owner(s) Project/Organization Role i_VUPT E-Forms/VFI Globally 3. Project Closure Report Version Control Version Date Author Change Description 1 08/15/2011 i_VUPT None to Date VFI_UC06.1 Acronyms & Definitions Page 4