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Glossary of Credit & Collection Terminology

Throughout the STA website, you may come across terms that require clarification. This glossary is designed to help you understand the terminology used across the STA International website as well as within the credit industry as a whole.

If there are any terms not covered in this glossary with which you remain unfamiliar, please get in touch with our team using the form or contact information available and we will be happy to assist you.

Accounts receivable

Money that is due for services performed or goods delivered.

Bad debt

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


Someone authorised and instructed to collect a debt on behalf of the person who is owed it. There are different types of bailiff who collect different types of debt, such as County Court Judgments, unpaid council tax, outstanding rent and so on.


Capital generally refers to the money a business currently has, but it can be combined with other words to offer a more precise meaning – for example, nominal capital refers to the amount of money that can be put into a Limited or Unlimited company in the form of shares.

Cash flow

Cash flow relates to the receipt of money to cover outgoings. A “positive” cash flow means that enough income is being received to cover the outgoings, while a “negative” cash flow means that there isn’t enough coming in to cover the outgoings.

Companies House

An executive agency within the Department for Business, Innovation & Skills with two main functions:

  1. To incorporate, re-register and strike-off companies as well as registering documents require to be filed under companies, insolvency and related legislation.
  2. To provide company information to the public, enforcing compliance with statutory requirements.

Company director

A person at the head of a company who supervises, regulates or controls its actions. Appointed by the company owner(s), a director has certain powers and duties relating to the management or administration of the company. Their powers are defined by the Articles of Association.

Company registration number

When a Limited company is formed, it is given a unique Company Number which it keeps until it is dissolved (even in the event of a name change). All companies are legally obligated to show this number on their letter headings.

County Court

The County Courts have had jurisdiction to hear claims relating to company debt since 1991. There are three different procedures that are applicable, depending on the amount being claimed:

  1. Small Claims track: debts up to £10,000 will be assigned here for a less formal hearing with help and guidance offered by the court.
  2. Fast track: debts between £10,000 and £25,000 will result in a more formal hearing in the County Court.
  3. Multi-track: claims exceeding £25,000 are assigned to the multi-track, which can be housed within the High Court, as opposed to the County Court.

County Court Judgment

A County Court Judgment (often abbreviated to CCJ) refers to the ruling of the court on a claim for payment – whether it is ruled that the payment must be paid in full or only partially, the CCJ is final.

County Court Judgment – satisfaction

The County Court will issue a certificate of satisfaction when the judgment has been paid in full. It is the payer’s responsibility to obtain the certificate of satisfaction.

County Court Judgment – cancellation

CCJs are only cancelled if they were entered accidentally; if the debt was paid before it was entered; or if the judgment is paid within one calendar month of being entered. It is the payer’s responsibility to obtain cancellation for the judgment in these cases.


Credit is the power to obtain finance, goods or services on a basis of trust by promising to pay for them at a predetermined time in the future.

Credit insurance

Credit Insurance is purchased to protect a business's accounts receivable from loss due to credit risks, such as protracted default or insolvency.

Credit reference

A credit reference is the information returned as a result of an enquiry to a credit reference agency, with information compiled from electoral rolls, CCJ data and commercial enquiries.

Credit scoring

Credit scoring is concerned with assessing the likelihood that credit will be repaid on time – the method used involves assigning a score to various attributes of a potential customer.

Debt collection agency

A company which operates an independent debt recovery service for accounts that become overdue.


The Scottish equivalent of a CCJ.

High court enforcement officer

A high court enforcement officer executes the judgments and orders of the High Court and County Courts of England and Wales.


Insolvency is defined as a company’s inability to pay debts that are due or where the debts owed exceed the company’s assets or financial ability to pay. To be declared insolvent, the debts owed must exceed £750.

International debt collection

If a debt collection case has to be taken to another country for any reason, it becomes classed as international debt collection, rather than UK debt collection.

Late Payment of Commercial Debts (Interest) Act 1998

This Act was introduced as a means of encouraging customers to pay their debts on time, otherwise companies who are owed can charge statutory interest.


Liquidation is the term used to describe the winding up of a company, usually because it has become unable to pay its debts. It involves the selling of the company’s assets and the division of any proceeds to the companies it owes money to.


Receivables refer to anything that is owed to a business. This might be cash, or it might be other goods and/or services.

Registered company

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

Registered office

The address of the company which is recorded at Companies House and which all documents are sent to. It can be found by referring to company headed paper or by carrying out a company search.


An often subjective measure of a business’s ability to meet its short and long-term financial commitments and obligations.

Statutory interest

This refers to the right of companies who are owed late payments on commercial debts to charge interest on them under the Late Payment of Commercial Debts (Interest) Act 1998.


Tracing refers to the use of a variety of techniques to track down customers who have “disappeared” without paying their debts, whether this was by mistake or on purpose.

Trading address

The address where the company’s business is carried out if this is different to the registered office.

Winding up order

An order made by the Court that a company should be wound-up and a liquidator appointed to manage its affairs.