Collections - Glossary of Terms

For those new to Collections, or those with questions regarding special terms of our services, we have compiled this glossary explaining commonly used terms.

If you still can't find what you are looking for please feel free to contact us and ask your questions directly. We are here to help.

Trade Debt

Trade debt is debt that has been incurred if the debtor was buying from the creditor in the course of business. We do not handle or collect consumer debt.

Credit Insurance

An insurance policy covers the payment risk resulting from the delivery of goods or services on credit terms. Credit insurance usually covers a portfolio of buyers and pays an agreed percentage of an invoice or receivable that remains unpaid as a result of protracted default, insolvency or bankruptcy.

CSA

The Credit Servcie Association is an industry body that issue strict guidelines on best practice that all members must follow.

Bad Debt

Money owed to a company which is not deemed to be recoverable and therefore written off as a loss.

Company Registration Number

When a limited company is formed, it is given a Company Number, unique to itself, which it keeps, even it changes its name, until dissolved. All companies are required by law to show this number on their letter headings. All company registration numbers are 8 digits long.

Contractual Interest

Interest on late payment as stipulated in a seller's contract with the debtor. The seller should decide the rate of interestand credit period for the debto, and should obtain agreement from the debtor to meet these terms. A seller may be challenged in a court of lawif either the rate of the interest or the length of the crdit period is deemed unreasonable.

Limited Company

A company in which the liability of the members in respect of the companies debts is limited. It may be limited in shares, in which case the liability of the members on a winding-up is limited to the amount (if any) unpaid on their shares. This is by far the most common type registered company.

Sole Trader

An individual who runs an unincorporated business on his or her own. generally, a sole proprietor of a business is known as a sole trader.

Registered Company

A registered company is registered under the Companies Act, with the Registrar of Companies. A company must be registered either as limited private company, a public limited company or an unlimited company.

Partnership

A type of business unit in which two or more persons join together to carry on some form of joint business activity. In what is termed the an Ordinary or general partnership, all the partners jointly share the management of the business.