Glossary of wholesale trade and document exchange
Terms that come up in supply contracts, invoices and correspondence with counterparties. A brief note on each, and where there is a tool or a detailed article — a link to it.
A
Acceptance
Full and unconditional agreement to an offer. It can be expressed by an action: paying an invoice-contract counts as acceptance.
Accounts receivable
The amount owed to a company by its buyers and other debtors. Overdue receivables are debts whose payment date has already passed.
Amount in words
A sum of money written out in words: “twelve thousand three hundred roubles 00 kopecks”. It is stated in invoices, contracts and powers of attorney so that the amount cannot be altered.
Tool: Amount in words
Annuity payment
Payment on the loan, the same entire term: at the beginning it has more interest, by the end - more principal debt. The opposite is differential payment, which decreases every month.
Tool: Loan calculator
B
B2B portal
A website for selling to companies: a catalogue with personal prices, orders, invoices and correspondence with buyers in one place.
Solution: B2B portal for wholesale customers
Balance
The balance of settlements as of a given date: the difference between shipments and payments. In a reconciliation statement the balance shows who owes whom and how much.
Banking day
A day on which a bank processes payments. The term is not defined by law; in a contract it is usually treated as a working day.
BIC
Bank identification code: 9 digits that identify the payee’s bank and its correspondent account.
Tool: Details check
C
Certificate of completed work
The primary document by which the parties confirm that work has been completed or services provided, and record their value. It is signed by both parties.
Claim
A written demand that a counterparty perform an obligation: pay, deliver, or replace goods. In monetary disputes between companies it is mandatory before going to a commercial (arbitrazh) court.
Closed catalogue
A catalogue available only to confirmed buyers or by password. Outsiders and search engines do not see it.
Solution: Closed catalogue
CommerceML
An open standard for exchanging commercial data in XML. 1C uses it to send the catalogue, prices and stock to a website and to receive orders.
Commercial proposal
A document in which the seller offers goods on specific terms: price, quantity, deadlines, validity period. If it contains all the essential terms of a contract, it is a legal offer.
Company details card
A sheet with a company’s details: name, INN, KPP, OGRN, address, bank details, director. It is given to a counterparty for preparing a contract and an invoice.
Tool: Company details card
Cost price
The sum of the costs of the goods before sale: purchase price, delivery to the warehouse, duties, packaging. Markup is calculated from it.
Counterparty
The other party to a contract: for the seller — the buyer, for the buyer — the supplier.
D
Daily penalty (penya)
A penalty charged for each day of delay as a percentage of the unperformed obligation: for example, 0.1% of the debt per day.
Dealer
A company that buys goods from a manufacturer or distributor and sells them in its own name, usually to end customers in its region.
Dealer portal
A section of the supplier’s website where, after signing in, a dealer sees their prices and stock, places orders and receives invoices.
Deferred payment
A contract term under which the buyer pays for the goods a certain time after shipment. In effect, trade credit from the supplier.
Delivery time
The period within which, or the date by which, the supplier must hand over the goods. It is counted in calendar or working days — these are different periods, and the contract must say which.
Differential payment
Payment on a loan in which the principal debt is repaid in equal shares, and interest is accrued on the balance. The first payments are the largest, the overpayment is less than with an annuity.
Tool: Loan calculator
Distributor
A company that buys goods from a manufacturer in large consignments and sells them to dealers and retail chains. It usually has special terms and an assigned territory.
E
EDO
Electronic document exchange: exchanging documents in electronic form with an electronic signature through an operator. A document signed with a qualified signature is equivalent to a paper one bearing a seal.
F
Fine
A penalty in a fixed amount or as a percentage of the amount, recovered once for the breach itself, regardless of how long it lasts.
Framework contract
A contract with the general terms of cooperation: ordering procedure, payment, liability. The parties agree the specific goods, quantities and prices through orders or specifications.
H
Higher leasing costs
Overpayment under the lease agreement in excess of the value of the property in percentage: advance, payments and redemption minus the cost divided by the cost. Price increases per year are always lower than the funding rate.
I
INN
Taxpayer identification number: 10 digits for an organisation, 12 for a sole proprietor. It is used to check a counterparty in the state register.
Tool: Details check
Interest under Article 395 of the Civil Code
Interest for the use of another party’s money when payment is late. It is charged at the Bank of Russia key rate unless the contract sets a penalty.
Invoice
A document with the seller’s details, a list of goods and the amount, against which the buyer transfers money. The law does not prescribe its form; an invoice is not a primary document.
Tool: Invoice with a QR code
Invoice-contract
An invoice that includes the essential terms of the deal. It is an offer: paying such an invoice signifies the buyer’s agreement and concludes a contract without a separate document.
K
Key rate
The interest rate at which the Bank of Russia lends to banks. Interest for the use of another party’s money and the statutory penalty are calculated from it.
Tool: Bank of Russia key rate
KPP
Tax registration reason code: 9 characters showing on what basis an organisation is registered with the tax authority. Sole proprietors have no KPP.
L
Leasing
Financial lease: The leasing company buys the property and puts it into use for monthly payments, and at the end of the term, the property usually goes to the lessee for a redemption payment.
Letter of guarantee
A letter in which the debtor confirms an obligation and names the date by which it will be performed. It is not a guarantee in its own right, but serves as evidence that the debt was acknowledged.
M
Margin
Profit as a percentage of the selling price. Goods bought for RUB 1,000 and sold for RUB 1,250 — a margin of 20%. For the same profit, margin is always lower than markup.
Markup
Profit as a percentage of the cost price of the goods. Goods bought for RUB 1,000 and sold for RUB 1,250 — a markup of 25%.
Minimum order amount
The threshold amount below which the supplier does not accept or does not deliver an order. It covers the costs of picking, documents and delivery.
Minimum order quantity
The smallest quantity of an item that the supplier is prepared to ship. It protects against orders that cost more to process than they earn.
O
Offer
A proposal to conclude a contract that contains all the essential terms and shows an intention to be bound if it is accepted.
OGRN
Primary state registration number: 13 digits for an organisation. A sole proprietor has an OGRNIP of 15 digits.
Order multiple
The step in which a product can be ordered: with a multiple of 12, quantities of 12, 24 and 36 pieces are available. It usually equals the quantity in the factory pack.
P
Payment order
An account holder’s instruction to the bank to transfer money to a payee. It contains the parties’ details, the amount and the payment purpose, and confirms that payment was made.
Tool: Payment order
Payment QR code
A code holding the payee’s details, the amount and the payment purpose. The buyer scans it in a banking app and does not enter the details by hand.
Penalty (neustoyka)
A sum of money the debtor pays the creditor for breaching an obligation. It is set by contract or by law and takes the form of a daily penalty or a fine.
Pickup
A way of handing over goods in which the buyer collects them from the supplier’s warehouse. The buyer’s representative needs a power of attorney.
Power of attorney M-2
The standard form of a power of attorney to collect goods and materials. It is issued to the employee who collects goods from the supplier on behalf of the organisation.
Prepayment
Payment for goods, in full or in part, before they are handed over to the buyer. On a prepayment received, a VAT payer calculates the tax and issues an advance VAT invoice.
Price list
A list of goods with prices. In wholesale there are usually several prices — retail, wholesale, dealer — in separate columns or separate price lists.
Price request
A buyer’s request to a supplier with a list of goods and the quantities for which they want a price. Known internationally as an RFQ (request for quotation).
Price tiers
A price that depends on quantity: one price up to 10 pieces, lower from 10, lower still from 100. The buyer sees the benefit when ordering.
Price type
A named price level in an accounting system: “Retail”, “Wholesale”, “Dealer”. A buyer or a buyer group is assigned one of the types.
Primary document
A document that records a fact of economic activity: a shipment, a payment, the completion of work. Accounting records are kept on the basis of primary documents.
Product range (nomenclature)
The list of a company’s goods and services in its accounting system, with their units of measure, groups and characteristics.
Production calendar
The calendar of working days, days off and public holidays for the year, including moved days off. Periods in working days and standard working time are calculated from it.
Purchase payment
Payment at the end of the lease agreement, after which the property becomes the property of the lessee. Often symbolic – for example, 1000 rubles.
Tool: Leasing calculator
R
Reconciliation statement
A document in which the parties compare shipments and payments for a period and record the outstanding debt. It is not a primary document, but when signed by the debtor it interrupts the limitation period.
RRP
Recommended retail price: the price at which the manufacturer advises selling the product to the end customer. Wholesale discounts are often calculated from it.
S
SKU (article number)
The manufacturer’s or seller’s product code by which an item is found in the catalogue and in documents. In stock management this code is called an SKU.
Specification
An appendix to a supply contract in which the name, quantity, price and delivery time of a particular consignment are agreed. Without these terms a framework contract cannot be performed.
Stock
The quantity of a product in the warehouse at a given moment. Free stock is what is not reserved for other orders.
Supply contract
A contract under which the supplier undertakes to hand over goods to the buyer for use in business. Its essential terms are the name and quantity of the goods.
T
TORG-12
Delivery note: the primary document for the transfer of goods from seller to buyer. The form is not mandatory but remains the most familiar; it does not replace the VAT invoice.
Transfer and acceptance certificate
A document confirming that property, goods or documents have been handed over from one party to the other. From the moment of signing, the risk of accidental loss usually passes to the recipient.
U
UKD
Universal correction document: issued when the price or quantity changes after shipment. It combines the correction VAT invoice and the document recording the parties’ consent to the change.
UPD
Universal transfer document: combines the VAT invoice and the primary document for the transfer of goods or the result of work. With status 1 it replaces the VAT invoice and the delivery note; with status 2 — only the delivery note or completion certificate.
V
VAT
Value added tax: an indirect tax that the seller includes in the price and remits to the budget. A buyer that is a VAT payer deducts it on the basis of the VAT invoice.
VAT invoice (schet-faktura)
The document on the basis of which the buyer deducts the VAT charged by the seller. VAT payers issue it no later than five calendar days from the date of shipment or receipt of a prepayment.
W
Wholesale trade
The sale of goods in consignments for resale or for use in business. It is documented by a supply contract, not a retail sale contract.
Working day
A day that is not a day off or a public holiday under the production calendar. A period in working days is longer than the same period in calendar days.
The definitions are for reference and do not replace the text of the law. The rules are given as of the date the page was updated.