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Home page Credit management advice The A to Z glossary of credit keywords

The A to Z Glossary of Credit Keywords

There are 166 entries in this glossary.
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B

Term Definition
Bad debt

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

Bad debt ratio

A comparison between total sales and those for which payment is not recoverable and therefore written off as losses.

Balance sheet

A statement showing the assets and liabilities of a business at a certain date. The balance sheet forms part of the accounts of a company, and is normally prepared annually.

Bank reference

The information returned as a result of a written request which is sent to the applicant's bank asking for its opinion regarding the financial standing of the applicant. The response can take one or two weeks to be received and will be couched in predefined phraseology.

Bankruptcy

A person is declared bankrupt by a Court which may happen at his own request or as a result of action taken by a creditor. A receiver will be appointed and assets be realised as effectively as possible.

Behaviour scoring

A scoring system for assessing the continued risk on an existing loan account. The score is recalculated regularly (typically monthly) and is used in both collections and marketing activities.

Bill of Exchange

Defined by Bills of Exchange Act 1882,s. 1 as an unconditional order in writing, addressed by one person (the drawer) to another (the drawee and afterwards acceptor), signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determined future time, a sum certain in money to, or to the order of, a specified person or to bearer (payee).

Bill of lading

A receipt from a carrier given to a shipper or consignor, undertaking to deliver the goods upon payment of the freight, to the person described in the bill. The delivery of this document to the consignee is sufficient to transfer property in the goods. It is a document of title and a document of carriage.

Borrowing ratio

A ratio which shows total debt as a percentage of shareholders' funds, and aims to measure to what extent the subject is financed by external funds.

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