Debt & credit glossary
Plain-English definitions of 114 terms across debt recovery, credit, insolvency, the courts and finance — search, filter by topic, or browse A–Z.
- A
Accounts payable
Money your business owes suppliers for goods or services bought on credit but not yet paid for.
Finance & Accounting - A
Accounts receivable
Money your customers owe you for goods or services already supplied but not yet paid for.
Finance & Accounting - A
Accrual accounting
Recording revenue when earned and expenses when incurred, regardless of when cash actually moves.
Finance & Accounting - A
Administrator
An independent practitioner who takes control of a company during voluntary administration to investigate and recommend an outcome to creditors.
Insolvency - A
Affidavit
A written statement of evidence, sworn or affirmed to be true, often used to support steps in debt proceedings.
Legal & Court - A
Aged Receivables
A report grouping money owed by customers into time bands, such as current, 30, 60 and 90 days, to highlight overdue debt.
Credit Management - A
Ageing Debt
Debt grouped by how long it has been outstanding, used to track and prioritise overdue accounts for recovery.
Debt Recovery - B
Bad Debt
A trade debt judged unlikely to ever be collected, which is written off against profit once recovery is no longer realistic.
Credit Management - B
Bad debt write-off
An accounting entry removing a debt judged unlikely to be recovered from your active receivables.
Finance & Accounting - B
Bank reconciliation
Checking your accounting records against your bank statement so the two agree.
Finance & Accounting - B
Bankruptcy
A formal procedure for individuals who cannot pay their debts, where a trustee administers the person's affairs for the benefit of creditors.
Insolvency - B
Bankruptcy Notice
A formal notice requiring an individual debtor to pay a judgment debt or face possible bankruptcy proceedings.
Debt Recovery - B
Burden of Proof
The responsibility a party has to prove its claim — in civil debt matters, generally on the balance of probabilities.
Legal & Court - B
Business activity statement (BAS)
The ATO form on which registered businesses report and pay GST and certain other tax obligations.
Finance & Accounting - C
Cash conversion cycle
The time it takes to turn money spent on stock and supplies back into cash collected from customers.
Finance & Accounting - C
Cash flow
The movement of money into and out of a business over a period — the lifeblood of day-to-day trading.
Finance & Accounting - C
Cause of Action
The set of facts that gives a party a recognised right to bring a claim — for debt, often an unpaid contractual amount.
Legal & Court - C
Commission-Only Recovery
A recovery model where the agent is paid only a percentage of what is actually collected, with no fee on amounts not recovered.
Debt Recovery - C
Consent Order
An order a court makes by agreement of the parties, often to record settled terms in an enforceable form.
Legal & Court - C
Costs Order
A court order about who pays legal costs of a proceeding, and sometimes how much.
Legal & Court - C
Counterclaim
A claim brought back by a defendant against the plaintiff within the same proceeding.
Legal & Court - C
Credit Application
The form a new customer completes to open a trading account, capturing identity, references and acceptance of the terms of trade.
Credit Management - C
Credit Check
A review of a customer's financial standing, payment history and risk before extending credit or setting a limit.
Credit Management - C
Credit Controller
The person responsible for managing a business's receivables, from approving accounts to chasing overdue payments.
Credit Management - C
Credit Insurance
Cover that reimburses a business for part of its losses when a customer fails to pay an insured trade debt.
Credit Management - C
Credit Limit
The maximum amount of credit a supplier extends to a customer at any one time before further supply is held or paid up front.
Credit Management - C
Credit Note
A document reducing or cancelling an amount a customer owes, issued to correct an invoice, allow a return or settle a dispute.
Credit Management - C
Credit Policy
A documented set of rules governing how a business grants, monitors and collects credit, from onboarding through to recovery.
Credit Management - C
Credit terms
The conditions on which you supply customers on credit — when payment is due and what applies if it is late.
Finance & Accounting - C
Creditor
The person or business that is owed money by a debtor and has the right to seek repayment.
Debt Recovery - C
Creditor's Statutory Demand
A formal written demand served on a company for a due debt, which if ignored can support a presumption that the company is insolvent.
Insolvency - D
Days Sales Outstanding
A measure of the average number of days a business takes to collect payment after a credit sale, often shortened to DSO.
Credit Management - D
Debtor
The person or business that owes money to a creditor, whether an individual, a company or another entity.
Debt Recovery - D
Debtor days
The average number of days it takes your customers to pay you after a sale — also called DSO.
Finance & Accounting - D
Deed of Company Arrangement
A binding agreement between a company and its creditors, arising from administration, setting out how the company's affairs will be dealt with.
Insolvency - D
Default Judgment
A court judgment entered in the creditor's favour when the debtor fails to respond to a claim within the required time.
Debt Recovery - D
Defendant
The party a civil claim is brought against — in debt matters, usually the person or business said to owe the money.
Legal & Court - D
Demand Notice
A written notice formally requiring payment of an overdue debt by a stated date, often before further action.
Debt Recovery - D
Deregistration
The removal of a company from the register, after which it ceases to exist as a legal entity and generally cannot be sued.
Insolvency - D
Dividend (Insolvency)
A payment made by a liquidator, administrator or trustee to creditors out of the funds available in an insolvency, in order of priority.
Insolvency - D
Doubtful debt provision
An estimate set aside in your accounts for receivables that may not be paid, before any are written off.
Finance & Accounting - D
Dunning
The structured process of reminding and pressing customers to pay overdue invoices through escalating letters and calls.
Credit Management - E
Early Payment Discount
A small reduction offered to customers who settle an invoice ahead of its due date, used to speed up cash collection.
Credit Management - E
Enforcement
The legal steps used to compel payment of a judgment debt, such as garnishees, writs and examinations.
Debt Recovery - E
Enforcement Warrant
A court warrant authorising an officer to take enforcement action, such as seizing property, to satisfy a judgment.
Debt Recovery - E
Examination Summons
A court order requiring a debtor to attend and answer questions about their finances so a judgment can be enforced.
Debt Recovery - E
External Administration
An umbrella term for formal procedures, such as liquidation, administration or receivership, where an external practitioner controls a company.
Insolvency - G
Garnishee Order
A court order directing a third party, such as a bank or employer, to pay a debtor's money to the creditor instead.
Debt Recovery - G
General ledger
The central record of all a business's financial transactions, organised into accounts.
Finance & Accounting - G
Gross margin
Sales revenue less the direct cost of goods sold, shown as an amount or a percentage of sales.
Finance & Accounting - G
GST (Goods and Services Tax)
Australia's broad-based consumption tax that registered businesses add to most sales and remit.
Finance & Accounting - I
Insolvency
When a person or company cannot pay its debts as and when they fall due. The starting concept behind most formal recovery and enforcement procedures.
Insolvency - I
Insolvent Trading
Where a company incurs debts while insolvent, potentially exposing its directors to personal responsibility for those debts.
Insolvency - I
Invoice
A document issued by a supplier requesting payment for goods or services, showing amounts, GST and the date due.
Credit Management - I
Invoice factoring
Selling your unpaid invoices to a finance company at a discount for immediate cash; they collect payment.
Finance & Accounting - I
Invoice finance
Borrowing against the value of your unpaid invoices to unlock cash before customers pay.
Finance & Accounting - J
Judgment
A court's formal decision in a case — in debt matters, often a finding that money is owed, which can then be enforced.
Legal & Court - J
Judgment Debt
A debt confirmed by a court judgment, which the creditor can then enforce using formal recovery tools.
Debt Recovery - J
Jurisdiction
The authority of a particular court or tribunal to hear and decide a given dispute.
Legal & Court - L
Letter of Demand
A formal written notice asking a debtor to pay an overdue amount by a set date before legal action is considered.
Debt Recovery - L
Liability
Legal responsibility for something — in debt matters, responsibility to pay an amount said to be owed.
Legal & Court - L
Limitation Period
The time within which a claim must generally be started — once it passes, recovery through the courts may be barred.
Legal & Court - L
Liquidation
The process of winding up a company, realising its assets and distributing the proceeds to creditors before the company is deregistered.
Insolvency - L
Liquidator
A registered insolvency practitioner appointed to wind up a company, realise its assets and distribute funds to creditors.
Insolvency - L
Liquidity
How easily a business can meet its short-term obligations with cash or assets quickly turned into cash.
Finance & Accounting - M
Magistrates Court
A lower court that commonly hears smaller civil claims, including many commercial debt matters.
Legal & Court - M
Mediation
A process where an independent person helps the parties try to reach their own agreement, without imposing a decision.
Legal & Court - M
Members' Voluntary Winding Up
A solvent winding up started by a company's members to close it down in an orderly way while it can still pay its debts.
Insolvency - M
Mercantile Agent
A licensed agent who collects overdue debts and repossesses goods on behalf of creditors, often under state licensing rules.
Debt Recovery - N
Net 30
A payment term meaning the full invoice amount is due within 30 days of the invoice date, with no discount for paying earlier.
Credit Management - N
Net profit
What remains from revenue after all costs, overheads and expenses — the business's bottom line.
Finance & Accounting - N
No Win No Fee
An arrangement where the creditor pays the recovery agent's collection fee only if money is successfully recovered.
Debt Recovery - O
Official Liquidation
A court-ordered liquidation in which a liquidator is appointed by the court to wind up an insolvent company.
Insolvency - O
Overdue Account
An account where payment has not been made by the due date and the amount owing is now past its payment terms.
Debt Recovery - O
Overdue invoice
An invoice that has passed its due date without being paid — the starting point for collection action.
Finance & Accounting - P
Part IX Debt Agreement
A formal, binding arrangement between an individual and their creditors offering a compromise as an alternative to bankruptcy.
Insolvency - P
Payment Arrangement
An agreed plan that lets a debtor clear an overdue amount by instalments over time instead of in a single payment.
Debt Recovery - P
Payment Terms
The agreed timeframe and conditions for a customer to pay an invoice, such as net 30 days from the invoice date.
Credit Management - P
Personal Guarantee
A promise by a director or owner to personally pay a company's debt if the company itself fails to do so.
Credit Management - P
Phoenix Activity
The improper practice of shifting a failing company's business to a new entity to avoid paying creditors, employees or tax.
Insolvency - P
Plaintiff
The party who starts a civil court claim — in debt matters, usually the creditor or business chasing the unpaid amount.
Legal & Court - P
PPSR Registration
Recording a security interest on the Personal Property Securities Register so it is protected if a customer becomes insolvent.
Credit Management - P
Pre-Legal Collection
The stage of recovering a debt through reminders, calls and demands before any court action is started.
Debt Recovery - P
Priority Creditor
A creditor whose claim is given preferential ranking in an insolvency, ahead of ordinary unsecured creditors when funds are distributed.
Insolvency - P
Proof of Debt
A formal claim lodged by a creditor in an insolvency to establish the amount owed and to participate in any distribution.
Insolvency - P
Provision for Doubtful Debts
An accounting estimate setting aside part of receivables expected not to be paid, before any debt is formally written off.
Credit Management - R
Receiver
A practitioner appointed, often by a secured creditor, to control and realise particular company assets and apply the proceeds to a secured debt.
Insolvency - R
Receivership
Where a receiver is appointed, usually by a secured creditor, to take control of and sell specific company assets to repay a debt.
Insolvency - R
Recovery Agent
A specialist who pursues overdue debts on a creditor's behalf, from reminders and negotiation through to legal enforcement.
Debt Recovery - R
Recovery of Costs
Reclaiming reasonable legal and recovery costs from a debtor in addition to the original debt, where allowed.
Debt Recovery - R
Recovery Rate
The proportion of an outstanding debt that is actually collected, usually expressed as a percentage.
Debt Recovery - R
Retention of Title
A clause keeping legal ownership of goods with the supplier until the customer has paid in full, often shortened to RoT.
Credit Management - S
Secured Creditor
A creditor whose debt is backed by a security interest over the debtor's property, giving it priority over unsecured creditors for that asset.
Insolvency - S
Service of Documents
The formal delivery of court documents to a party so they have proper notice of the proceedings.
Legal & Court - S
Settlement
An agreement that resolves a dispute, often on agreed payment terms, instead of continuing to a court decision.
Legal & Court - S
Skip Tracing
The process of locating a debtor who has moved or cannot be contacted, so a debt can be pursued.
Debt Recovery - S
Small Claims Tribunal
A lower-cost forum that handles smaller civil disputes, often with simpler procedures than a court.
Legal & Court - S
Solvency
The state of being able to pay debts as and when they fall due. The opposite of insolvency and a key concept in directors' duties.
Insolvency - S
Statement of Account
A periodic summary sent to a customer listing all invoices, credits and payments, and the total balance currently owing.
Credit Management - S
Statement of Claim
A court document that starts legal proceedings, setting out the debt claimed and why the debtor is said to owe it.
Debt Recovery - S
Statutory Demand
A formal demand on a company to pay a debt within 21 days, used as a step toward winding up an insolvent company.
Debt Recovery - S
Subpoena
A court order requiring a person to give evidence or produce documents for a proceeding.
Legal & Court - S
Summons
A court document requiring a person to attend court or respond — sometimes used to start or progress a debt matter.
Legal & Court - T
Tax invoice
An invoice that meets ATO requirements so a registered buyer can claim a GST credit on the purchase.
Finance & Accounting - T
Terms of Trade
The written commercial terms governing supply on credit, covering payment, title, interest, charges and dispute handling.
Credit Management - T
Trade credit
Supplying a customer now and letting them pay later under agreed terms, rather than at the time of sale.
Finance & Accounting - T
Trade Reference
A statement from an existing supplier about how a customer has paid, used to gauge creditworthiness before opening an account.
Credit Management - T
Turnover
The total sales revenue a business earns over a period, before costs are deducted.
Finance & Accounting - U
Unfair Preference
A payment or transfer to a creditor before insolvency that may be recoverable by a liquidator because it preferred that creditor over others.
Insolvency - U
Unsecured Creditor
A creditor owed money without any security over the debtor's property, ranking behind secured and priority creditors in an insolvency.
Insolvency - V
Voluntary Administration
A procedure where an independent administrator takes control of a financially distressed company to find the best outcome for creditors.
Insolvency - W
Winding Up
The formal process of closing down a company, settling its affairs and distributing assets, which ends in deregistration.
Insolvency - W
Working Capital
The funds tied up in day-to-day trading, calculated as current assets less current liabilities, including receivables and stock.
Credit Management - W
Writ of Execution
A court order authorising an enforcement officer to seize and sell a debtor's property to satisfy a judgment debt.
Debt Recovery
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