Glossary
BPO & Outsourcing Glossary
Direct answer
This glossary defines the business process outsourcing (BPO) terms buyers meet most often — from back office, SLA, and SOP to order to cash, procure to pay, KYC, RCM, and RLHF. Each entry is a short, plain-English definition you can quote or share.
Core BPO & delivery
Business process outsourcing (BPO)
Contracting an external provider to run a defined business process — such as payroll, support, or KYC — instead of staffing it entirely in-house.
Back office
Internal operations that keep a business running but don't face customers: finance, payroll, compliance, and data work. See Actigy's services.
Front office
Customer-facing work such as support and sales.
Nearshore / offshore / onshore
Delivery-location models: a nearby country, a distant lower-cost country, or the same country as the client.
KPO (knowledge process outsourcing)
Outsourcing of higher-judgement, specialised work (analysis, research, compliance review) rather than routine tasks.
FTE (full-time equivalent)
A unit of staffing equal to one full-time person, used to size and price a team.
SLA (service level agreement)
A documented commitment on turnaround, availability, or quality that delivery is measured against.
KPI (key performance indicator)
A metric that shows whether a process is hitting its goals — e.g. accuracy, days in AR, or CSAT.
SOP (standard operating procedure)
A documented, step-by-step description of how a task is performed, so delivery is repeatable.
Maker-checker
A control where one person performs a task and a second reviews it before it is finalised, reducing errors in sensitive work.
QA sampling
Reviewing a sample of completed work against a quality standard to measure and protect accuracy.
Pilot
A scoped, time-boxed first phase that proves quality and throughput before scaling to full volume.
Knowledge transfer (KT)
The structured handover of process knowledge, edge cases, and systems from the client to the delivery team.
Cost-to-quality ratio
The quality of output you get per dollar spent — Actigy's core metric. See the cost-to-quality guide.
Finance & accounting
Gross-to-net
The payroll calculation from gross earnings to net take-home pay after taxes and deductions. See payroll outsourcing.
Accounts payable (AP)
Money a business owes suppliers; the process of capturing, approving, and paying invoices. See AP outsourcing.
Accounts receivable (AR)
Money owed to a business by its customers; the process of billing and collecting it.
3-way matching
An AP control that matches an invoice to its purchase order and goods receipt before payment, preventing overpayment and fraud.
Order to cash (O2C)
The end-to-end process from a customer order to collected payment: order entry, fulfilment, invoicing, and cash application.
Procure to pay (P2P)
The end-to-end process from sourcing and purchasing a good or service to paying the supplier.
Reconciliation
Matching two sets of records (e.g. bank statement vs ledger) to confirm they agree and to surface discrepancies.
Month-end close
The recurring process of finalising the books for a period: accruals, reconciliations, journals, and reporting. See accounting outsourcing.
Compliance & risk
KYC (know your customer)
Verifying a customer's identity and assessing risk at onboarding and over time. See KYC outsourcing.
CDD / EDD
Customer due diligence and its deeper variant, enhanced due diligence, applied to higher-risk customers.
AML (anti-money laundering)
Controls and operations that detect and prevent money laundering. See AML outsourcing.
Transaction monitoring
Automated screening of transactions for suspicious patterns, which generate alerts for analysts to review.
Sanctions screening
Checking customers and transactions against sanctions and watch lists.
PEP (politically exposed person)
A person in a prominent public role who carries higher financial-crime risk and warrants extra scrutiny.
SAR / STR
A suspicious activity report / suspicious transaction report, filed with regulators when warranted; the decision to file stays with the client's officer.
Insurance & healthcare
FNOL (first notice of loss)
The first report of an insurance claim, which starts the claims lifecycle. See claims outsourcing.
Claims adjudication
Determining whether and how much an insurance claim should be paid; final authority stays with licensed adjusters.
Subrogation
An insurer's recovery of a paid claim's cost from a responsible third party.
Revenue cycle management (RCM)
The financial process in healthcare from patient encounter to collected payment. See medical billing.
Charge entry
Recording the billable services from a patient encounter into the billing system.
Clean claim
A claim with no errors that a payer can process and pay on first submission — a key RCM quality metric.
Denial management
Working, appealing, and root-causing denied claims to recover revenue and prevent repeats.
Days in AR
The average time it takes to collect payment after billing; a core revenue-cycle health metric.
Eligibility verification
Confirming a patient's insurance coverage and benefits before service to reduce denials.
Credentialing
Verifying and enrolling a provider with payers so they can bill for services.
HIPAA / BAA
The US health-data privacy law, and the business associate agreement that governs a vendor handling that data.
Support, IT & AI
Service desk
A single point of contact that handles IT requests and incidents for users. See IT outsourcing.
ITIL
A widely used framework of best practices for IT service management (incidents, requests, changes).
Ticket triage
Categorising, prioritising, and routing incoming support tickets to the right queue.
Escalation
Passing an issue to a higher tier or to engineering, with the context needed to act.
Regression testing
Re-running tests after changes to confirm existing functionality still works. See QA outsourcing.
Data annotation / labeling
Tagging data (text, image, audio) so machine-learning models can learn from it. See AI outsourcing.
RLHF
Reinforcement learning from human feedback — humans rank model outputs to align an AI model's behaviour.
Human-in-the-loop (HITL)
A workflow where people review, correct, or approve automated or AI-generated output.
Content moderation
Reviewing user or AI-generated content against a safety policy.
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Related reading
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