What does VPP stand for on an invoice?

Have you spotted the “VPP” acronym on your latest invoice? Are you wondering what it might mean? With an estimated 550 billion invoices sent globally per year, it’s no surprise confusing terms may occasionally pop up here and there.

The answer to what this acronym means depends heavily on the context in which the invoice is sent. When included on an invoice, VPP can stand for several things, including vendor payment programme, value priced product, and value payable post. Exactly what it stands for will depend on what’s being sold and by who. Here are some of the possible terms and their expanded meanings.

Value payable post

The VPP on your invoice could mean value payable post, which essentially delays payment until delivery. When you receive the item or service, you’ll need to pay the amount listed, usually by cash to the person delivering the item.

Volumetric production payment

If you’re purchasing gas or oil, the VPP on your invoice likely means volumetric production payment. In this instance, VPP allows the owner of a gas or oil field to get cash upfront in exchange for a portion of their future gas or oil production. As the buyer, you’re paying upfront for the right to receive a specific amount of gas or oil from a particular well or field over a set period.

Vehicle purchase programme

If you’re purchasing a truck, car, or lorry, it’s possible the VPP refers to a vehicle purchase programme. This is a plan offered up by the supplier that could contain a range of possible beneficial payment programmes. For example, if the car is supplied via your employer, the VPP could refer to a special employee discount or spread out payment plan. 

Another example is if you are a veteran purchasing a motorbike from a dealership. The VPP in this context could refer to a special maintenance package programme offered to veterans. Ask the company or person exactly what the vehicle purchase programme entails to be sure you want to be included.

Vendor payment programme

If the VPP stands for vendor payment programme, this would refer to a specific agreement between the buyer and seller that specifies how and when the invoices must be paid. It could, for example, refer to an instalment based payment plan that spreads the cost of the items or it could refer to a late payment fee structure. Again, ask your supplier for clarification so you know when and how to pay.

Volume purchase programme

If you’re purchasing in bulk, it’s possible VPP stands for volume purchase programme, which could refer to a bulk purchase agreement that includes special discounts. An example of a volume purchase programme could be a company purchasing 200 licences for a new software they’re rolling out to employees and getting a reduced cost due to the large number of licences.

What does VPP stand for on an invoice?

Consider your specific industry and circumstances when figuring out what VPP means. If you work in the automotive or mechanic industry or if the invoice is for a car, it’s possible VPP stands for vehicle purchase programme. On the other hand, if you work in gas and oil, chances are it means volume production payment.

The best course of action is likely to ask the company that sent you the invoice what VPP means and if you need to do anything to address it. If there is no reason for the VPP to be there and the invoice is one you’re unsure of, assess the situation carefully to ensure you are making a legitimate payment. Speak to your bank or a financial advisor if you need support understanding what constitutes a legitimate invoice. 

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Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

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