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Glossary of Credit Management Terms. Letter
B
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. (http://www.payontime.co.uk/documents/vetting/request.html)
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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