Glossary

Cash Flow Specialists, Inc.

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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

"A" credit customer
Consumers with impeccable credit, who can obtain a loan from traditional lenders.

ACH (Automated Clearing House)
A computer-based clearing and settlement facility for the interchange of electronic debits and credits among financial institutions. Basically acts as an intermediary that clears transactions through two or more financial institutions, similar to the Federal Reserve system.

Acceleration Clause
Language in a lease that secures payments for the full term of the lease.

Account Closed
Reason for returned check: checking account closed; check not bankable.

Accounts Payable
The amount of money a company owes for goods and services it has received, any outstanding debt that a company has.

Accounts Receivable
A collection of a company's outstanding invoices (invoices, which have not yet been paid by the company's customers).

Accounts Receivable Aging Report
A report showing how long invoices from each customer have been outstanding.

Activation
The process where a Customer selects a Biller account for bill presentment, agrees to Biller terms and conditions, and establishes the account within the Biller's and the CSP's systems.

Activator
A form designed to enable NRC clients to transmit information about a debt to NRC to begin the collection process. By using the activator to transmit debt information, the client does not need to submit (or copy) original debt information to begin the collection process. With paper-based NRC systems, the activator resembles a check in a one-write accounting system. With the electronic Tandem Online program, the activator is completed online and immediately transmitted to NRC for collection.

Advance Rate
The percentage of the face amount of an income stream that a funding source will advance to a client.

Agent
An individual or business, other than the Customer or Biller, that receives and originates bills or notices on behalf of the Customer or Biller.

Aggregator
A Customer Service Provider that aggregates bills and bill summaries from Consolidators, Biller Service Providers and Billers for viewing by the Customer.

Alienation
Harsh tactics used by conventional collection agencies in an attempt to salvage and collect bad debts. Those tactics cause the debtor to get mad at the credit grantor, and the credit grantor loses any future business from that debtor/customer. NRC uses collection tactics designed to educate debtors regarding their payment responsibilities to prevent alienation and to get the customer back into the credit grantor's business (if the creditor wishes them to return).

Amortization
The gradual, systematic payment of a debt, such as a mortgage or other loan, in installments of principal and interest for a definite time, so that at the end of that time, the debt will have been paid in full.

Articles of Incorporation
A document filed with an U.S. State by the founders of a corporation. After approving the articles, the state issues a Certificate of Incorporation the two documents together become the Charter of Incorporation.

Asset
Anything having commercial or exchange value that is owned by a business, institution or individual. A business' assets might include its real estate, equipment inventory, intellectual assets such as copyrights or trademarks, and accounts receivable.

Assignability
The ability to assign (or sell) an income stream to another individual or business.

Assignee
The person or business entity that is given, obtains, or buys the right to an asset.

Assignment
The transfer of the rights, title or interest of any debt instrument that is properly owned by another party.

Assignor
The person giving or selling an asset, and subsequently, forfeiting rights to that asset.

Attorney Demand
A written debtor demand from a collection attorney firm. It is included in the Primary Phase of the Tandem collection programs. Near the end of the Primary Phase collection cycle the debtor will receive a letter from a firm of collection attorneys demanding immediate payment of the amount owed. There is no additional charge for this pre-litigation attorney demand. In order for NRC to use this contact, the client must indicate that he or she will litigate if necessary.

Authentication
A reliable process that determines the identity of a party.

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"B" through "D" credit customers
These consumers have less than perfect to bad credit and usually cannot qualify for traditional financing. Also called sub-prime credit customers.

BAI (Bank Administration Institute)
The leading professional organization devoted exclusively to improving the performance of financial services companies through strategic research and information, education and training. BAI provides a comprehensive range of end-to-end solutions to address strategic and operational problems facing financial services organizations.

BAI Standards
The quality standards that many third-party providers and banks are held to in providing cash management services such as lockbox. Each year, BAI surveys third-party providers and financial institutions regarding their quality of processing for several cash management services. The survey averages often become the "de facto" quality standards for the coming year.

Bad Debt
Any debt that is delinquent and has been written off as uncollectible.

Balance sheet
A financial statement that shows a business' current financial condition, with assets on the left side and liabilities and net worth on the right side.

Balloon
The balance of principal that is due and owing in its entirety at a specified point in time, but in any event, less than the time required to fully amortize the debt.

Bankable Check
Check previously returned from the bank due to non-sufficient funds or account closed but can be redeposited. Checks, which are not bankable due to account or check problems, include returns due to Account Closed, Refer to Maker

Bank Routing Number
The first nine digits appearing across the bottom of a personal check that identify the financial institution.

Bankrupt Accounts (see also Bankruptcy)
Accounts that are listed within a bankruptcy filing and, thus, cannot be pursued by the credit grantor or a third-party agency.

Bankruptcy
A federal law that enables debtors with severe delinquency problems to get "forgiveness" on that debt. Once debts are included in a bankruptcy filing, it is a violation of federal law for either the credit grantor or any third-party collection source to pursue those debts. During qualifying and while determining the amount of debt a prospect has, bankruptcy amounts must be excluded from debt amount totals.

Batch
The accumulation of captured (sale) transactions waiting to be settled. Multiple batches may be settled throughout the day.

Batch Processing
A type of data processing and data communications transmission in which related transactions are grouped together and transmitted for processing, usually by the same computer and under the same application.

Beneficiary
The person or party entitled to receive the benefits, or proceeds, of the life insurance policy upon the death of the insured person.

Bill/Invoice
An electronic or paper document sent to a customer associated with a payment due.

Bill Consolidator
A Bill Service Provider that consolidates bills from other Bill Service Providers or Billers and delivers them for presentment to the Customer Service Provider.

Bill Detail
Information from a Biller that provides invoice line level information to a customer. This may include specific billing event information such as credit card charges, telephone calls, or kilowatts used. Also: Invoice Detail.

Bill Notification
A process whereby a Customer is notified that an electronic bill is available for review and payment.

Bill of Lading
A shipping document, which gives instructions to the company, transporting the goods.

Bill of Sale
A document used to transfer the title of certain goods from seller to buyer.

Bill Summary
The summary information from a Biller that is essential to a Customer to understand what is owed. Typical information may include; Amount Owed, Date Due, Biller, Biller's Account Number. Also: Summary Record, Summary, Invoice Summary, Invoice Summary Record, Bill Summary Record.

Biller
A company or organization that sends a Bill or Statement, usually a request for payment for a product or service, to a Customer.

BPP (Biller Payment Provider)
An agent of the Biller that accepts remittance information on behalf of the Biller.

BSP (Biller Service Provider)
A financial institution or non-financial entity acting as an intermediary between the biller and consumer for the exchange of electronic bill payment information. An agent of the biller that provides an electronic bill presentment and payment service for the biller.

Business-based income streams:
Cash flow instruments that are paid to a business by another business or government.

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Call Campaign
A series of three attempts by collectors to contact a debtor by telephone. Calls are typically made on weekdays, weekday evenings, and weekends.

Call Center
A functional area within an organization or an outsourced, separate facility that exists solely to answer inbound or place outbound telephone calls; usually a sophisticated voice operations center that provides a full range of high-volume, inbound or outbound call-handling services, including customer support, operator services, directory assistance, multilingual customer support, credit services, card services, inbound and outbound telemarketing, interactive voice response and web-based services.

Capture
Converting the authorization amount into a billable transaction record within a batch. Transactions cannot be captured unless previously authorized and the goods or services have been shipped or transmitted to the consumer.

Capture Date
The date on which a transaction is processed by an acquirer.

CAR (Courtesy Amount Recognition)
The technology that reads and recognizes the handwritten or typed courtesy (numeric) amount on checks.

Cash flow
The flow of cash through a business or household. In business terms, cash flow involves the flow of cash into a company in the form of revenues, and out of the company in the form of expenses.

Cash flow broker
Professional whose primary purpose is to unite income stream sellers with funding sources. They may operate as referral sources or as the primary liaison for cash flow transactions.

Cash flow industry
The buying, selling, and brokering of privately held debt in the secondary marketplace; the marketplace where businesses and individuals get help managing their cash flow needs.

Cash flow instrument
Future payment or series of payments. Also called a debt instrument or income stream.

Cash flow specialist
A cash flow professional who brokers cash flow transactions or buys cash flow instruments.

Cash flow transaction
Occurs whenever a funding source pays cash to an individual or business in exchange for an income stream.

Chattel mortgage
A mortgage on personal property, given to secure a debt. Typically used in the sale of a business. Also called a security agreement.

Check & List
Multiple payments on one list with a single check attached for the total- no scannable remittance document attached.

Check-only Payments
Payments received without a remittance coupon or payment document.

Check Writer
Individual who has written a personal check (usually does not apply to the presenter of a company check).

Checking Account Number
Second set of numbers (following the bank routing number) appearing on the lower left hand corner of the check.

Closed For Cause
Closing of a consumer's checking account by a financial institution due to non-sufficient funds, unpaid fees, etc.

Collateral
Something of value (land, a home, a car, etc.) that is pledged as security to ensure the payment of a debt. Collateral is promised to a lender until a loan is repaid. If the borrower defaults, the lender has the right, by law, to seize the collateral.

Collateral-based income streams
Cash flow instruments that are secured by collateral.

Collectibility
Refers to the funding source's ability to collect future income stream payments once they are purchased.

Collection Charges
Charges added to the delinquent account balance to offset (all or in part) the cost of outside collection activity. Collection charges can only be added when the document creating the debt advised the debtor that collection charges will be added if the account must be sent to an outside collection source for resolution.

Commercially Reasonable Time Frame
A period of time generally considered acceptable for a process within a given industry, taking into consideration the circumstances of the parties to the transaction.

Commercial Relationship
An agreement between parties to do business together for the purpose of EBPP. It may or may not include a contract.

Commission
Fee paid to a broker for executing or referring a cash flow transaction.

Consolidator
A Biller Service Provider that consolidates bills from other Bill Service Providers or Billers and delivers them for presentment to the Customer Service Provider.

Consumer-based income streams
Cash flows in which the party that owes payments is a consumer, a private individual.

Content Management
The delivery of business-critical information to consumers or business-to-business customers by drawing data from disparate sources. The composed documents may contain billing data, customer service information, marketing messages or other types of content. ACH Direct clients manage this process through tools, which empower them to control this critical information flow to customers.

Contingent Fee
A collection charge based on a percentage of the amount collected. This is how most conventional collection sources charge for their services.

Contingency-based income streams
Cash flows in which the recipient is not necessarily legally entitled to receive payments, or in which the amount of the payment is uncertain or contingent upon outside factors.

Conventional Collection Sources
Collection agencies, attorneys, or credit bureaus that charge for their services on a contingent-fee basis (i.e., they keep a percentage - typically 33 to 50 percent of what they collect).

Conversion
The process of converting a qualified prospect into an active client.

Corporation
A legal entity, chartered by an U.S. State or the federal government, and separate and distinct from the persons who own it. The courts regard it as an artificial person; it may own property, incur debts, sue or be sued.

Creditor
One who is owed payments on a debt by a debtor.

Credit Transaction
A payment transaction that pushes funds from the CSP or CPP to the BPP.

CAI (Customer Account Information)
A detail field within Remittance Information, usually the account number assigned to that customer by the Biller. This can also be used to mean the Customer's billing name and address as well as any other information that the Biller uses to identify the Customer.

Customer Consolidation
One of four models of electronic bill presentment and payment (EBPP). Bill content and payment instructions and/or a payment mechanism is sent to the customer via e-mail. Other models include: Biller Direct, Thick Consolidator and Thin Consolidator.

CPP (Customer Payment Provider)
An agent of the Customer that originates payments on behalf of the Customer.

CSP (Customer Service Provider)
An agent of the Customer that provides an interface directly to customers, businesses or others for bill presentment. CSP enrolls customers, enables presentment and provides customer care, among other functions.

Customer Transactions
Outbound invoices, statements and bills from clients to their customers and inbound payments received from customers to clients.

Cycle Billing
The preparation of monthly cardholder statements by group (cycle) for the purpose of evenly distributing the workload and receipt of cardholder payments.

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Data Encryption
The scrambling of sensitive information, such as account numbers or access codes, to prevent unauthorized use. The Data Encryption Standard (DES), the encryption format adopted by the financial industry, requires that information scrambling take place in a computer or terminal before transmission.

Debt instrument
Future payment or series of payments, or a debt that one party owes to another party. Also known as income streams or cash flow instruments.

Debit Transaction
A payment transaction authorized by the Customer, originated by the Biller that pull funds from the Customer's account.

Debtor
One who owes something and makes payments to a creditor.

Default
The omission or failure to perform or fulfill a legal duty, obligation, or promise (i.e. to pay a debt).

Delinquency Cycle
The cycle a credit grantor's accounts goes through - advancing through the various aging periods (30 days delinquent, 60 days, 90 days, etc.). Typically, when credit grantors focus their internal recovery efforts on the older delinquent accounts (120 days or more), many of the accounts in the earlier stages of the delinquency cycle (e.g., 30- to 60-day accounts) are missed and they begin to age. If the credit grantor focuses on the early accounts, the older ones just get older. The delinquency cycle develops because most credit grantors do not have the internal resources required to pursue all of their aged delinquencies.

Demand Draft
A single payment check without a scannable remittance document attached. This draft may be drawn on the Customer's account or the CPP account.

Direct Payment
Method of collection used in the ACH network for certain claims, generally those that are repeated over a period of time, under which the debtor gives the originator a standing authorization to debit his or her account.

Disputed Stop Payment
Stop payment placed by a check writer due to a complaint or dispute over goods or services.

Due diligence
Exhaustive research on a transaction, income stream, client, and/or payor. Due diligence may involve credit checks, appraisals, UCC searches, lien searches, or on-site visits with clients.

Dunning Letter Service
Service that distributes "dunning" or collection letters to customers that have paid for clients' services with NSF (Not Sufficiently Funded) checks.

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E-Cash
Electronic cash is a payment mechanism designed for the Internet. It is electronic money that can be passed along from person to person like cash. It is anonymous like cash, and has value immediately - it's cash, not a promise to pay later.

E-Check
The electronic equivalent of a paper check.

Electronic Banking
Form of banking in which funds are transferred through an exchange of electronic signals between financial institutions, rather than an exchange of cash, checks or other negotiable instruments.

Electronic Bill Delivery
A bill delivery system offered by Visa Interactive that allows banks to send consumers their bills through their personal computers or via telephone lines. This system now allows consumers to transfer funds through their bank to the billing agent itself.

EBPP (Electronic Bill Presentment and Payment)
The electronic presentation of statements, bills, invoices and related information sent by a company to its customers, and corresponding payment for goods or services.

ECA (Electronic Check AcceptanceSM)
A system which captures banking information off a paper check and converts it into an electronic item processed through the Automated Clearing House network. With ECA, checks are processed similarly to credit cards, and the paper check is returned to the consumer at the point of sale.

E-commerce (Electronic Commerce)
The transacting of business electronically rather than via paper.

EDI (Electronic Data Interchange)
The electronic communication of business transactions; specifically the exchange of trade-related documents, such as purchase orders, invoices and corporate Electronic Funds Transfer (EFTs) in a standard format. With EDI, electronically transmitted data replaces paper documents in the business accounts receivable cycle.

As more and more companies get connected to the Internet, EDI is becoming increasingly important as an easy mechanism for companies to buy, sell, and trade information. ANSI has approved a set of EDI standards known as the X12 standards.

EFS (Electronic Financial Services)
Financial services that are provided via electronic delivery channels (e.g. PCs, telephones, screen phones and ATMs). These services may be transaction and/or information oriented and may be provided by bank and non-bank providers.

EFT (Electronic Funds Transfer)
A transfer of funds between accounts by electronic means rather than conventional paper-based payment methods. EFT is any financial transaction originating from a telephone or electronic terminal, or from a computer or magnetic tape.

Electronic Payment
An alternative to paper checks for paying bills. Consumers can use PCs, telephones, screen phones or ATMs to send electronic instructions to their bank or bill payment provider to withdraw funds from their accounts and pay merchants. Payments may be made either electronically or by a paper check issued by the bill payment provider.

Enrollment
The process associated with a Customer establishing a relationship with a CSP.

Enveloping
A process whereby documents of the same type or purpose are grouped together, bound and sent to the same destination into an electronic envelope. This is done by an electronic data interchange management software function.

Equity
The value or interest an owner has in property over and above any indebtedness owed on the property.

Escrow
The system by which money documents, personal property, or real property is held in trust for another party by a disinterested third party until the terms and conditions of the escrow instructions are completed or terminated.

Extranet
A Web site that links businesses to consumers, suppliers, etc., for electronic commerce. These sites usually provide more consumer-specific information than public sites and may have security devices such as passwords for a user to gain access to more sensitive information.

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Face value
The current principal balance on an income stream.

Factor
A funding source that specializes in funding accounts receivable.

Factoring
The purchase of a business' accounts receivable at a discount.

Fair Credit Reporting Act (FCRA)
Federal law which dictates acceptable and non-acceptable practices and procedures involved in the reporting of credit information related to a consumer.

Fair Debt Collection Practices Act (FDCPA)
Federal law enacted in 1977 to eliminate abusive and deceptive debt collection practices and to ensure that debt collectors who refrain from using abusive and deceptive debt collection practices are not competitively disadvantaged.

Federal Reserve Bank
The bank of the United States of America. Loans and provides money to banking institutions and establishes interest borrowing rates.

Fictitious name
A legal statement filed when a person uses a name other than his or her own to operate a business.

Financial EDI
Electronic exchange of payments, payment information or financially related documents in standard formats between business partners.

Fixed Fee
Paying a specific amount per collection, as opposed to a contingent fee. NRC offers fixed-fee collection services. This is typically the most cost-effective way to recover delinquent accounts.

Fixed Fee Philosophy
NRC's unique solution to accounts receivable management. The fixed fee philosophy focuses on the early referral of delinquent accounts and the resulting highest possible recovery ratios. The cornerstones of the NRC fixed fee philosophy are a low, fixed-fee-per-account, preserving the creditor's image, and assisting credit grantors to maintain a healthy cash flow.

Foreclosure
A legal proceeding in court to seize property given as security for a debt that is in default.

Full-service Collections
A third-party collection source that utilizes a full range of collection tactics including written debtor contacts and multiple calls from professional collectors using predictive dialing equipment (see also Predictive Dialer) throughout the collection cycle. Those agencies that are not classified as full-service agencies may not make any phone calls to the debtor whatsoever, or may make phone calls only at the end of the collection cycle (and often at an additional fee).

Funding source
An individual investor or an investment company that buys income streams.

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Government-based income streams
Cash flows paid by a government entity, either directly or through an insurance company.

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Host (ing)
An Internet Service Provider (ISP) that stores Web sites on a server. ISPs generally charge a monthly fee to "host" a Web site.

HTML (Hypertext Markup Language)
The set of markup symbols or codes inserted in a file intended for display on a Web browser page. The markup tells the Web browser how to display a Web page's words and images for the user.

Hypothecation
Borrowing funds from a lender, investing those funds in a debt instrument, and giving the lender a security interest in the debt instrument as the collateral for the loan.

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IBOP (Internet Bill Delivery and Payment)
An Internet-based service that securely and reliably delivers richly formatted bills, statements, invoices, notices and associated advertising to any online consumer or business, and returns payment, remittance instructions and related information to the biller and/or designated payee.

IFX (Interactive Financial Exchange)
A standard for the exchange of financial data and instructions independent of a particular network technology or computing platform. It builds on previous industry experience including OFX and GOLD, which are currently implemented by major financial institutions and service providers to enable electronic exchange of financial data between their customers and themselves.

Income stream
A future payment or series of payments, or a debt that one party owes to another party. Also known as a debt instrument or cash flow instrument.

Institutional lenders
Savings and loan associations, local and regional banks, mortgage companies, finance companies, and commercial lenders.

Insurance-based income streams
Cash flows stemming from insurance companies and paid to individuals or businesses.

Intangible personal property
Something that has value but is not a tangible asset, for example, a trademark, copyright, patent, or trade secret.

Internet Check Acceptance
A payment system that allows consumers to enter their checking information on-line; electronic items are created and processed through the Automated Clearing House network.

ISP (Internet Service Provider)
A company that provides a connection to the Internet. Service providers sell access to the network. Services offered differ between ISPs.

Investment-to-value ratio
A measure of how secure a creditor's position is and how likely the creditor is to recoup all of his or her money in the event of a foreclosure.

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Joint venture
A business entity established for a specific task, operation, or goal.

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LAR (Legal Amount Recognition)
The technology that reads and recognizes the handwritten or typed legal (written) amount on checks.

Lead
A piece of information of possible use in the search for a prospective client.

Letter-writing plus Percentage Agencies
Collection sources that use only letters during the service's prepaid phase, and then, make telephone calls only when the account is being worked on a contingent-fee basis - as opposed to NRC's full-service collection strategy at all times.

Leverage
The ratio of debt to total assets.

Limited liability company
A form of business structure designed to combine the best of corporate and partnership attributes into one entity.

Litigation
Using legal action to recover a debt. NRC's Tandem Program offers full follow through to litigation forwarding, when warranted. Litigation is most often used as the final remedy after all other collection efforts have failed. Litigation is at NRC's option and may not be a cost-effective solution on low-balance accounts.

Loan-to-value ratio
A measure of how heavily mortgaged a property is and how likely the owner is to default on his or her debts.

Lockbox
A collection and processing service provided to clients by third-party providers, such as ACH Direct. These providers collect business-to-corporate (B2C) payments from a dedicated postal box to which clients have directed customers to send payment. (See Remittance Processing.) The payment stream is typically low dollar and high volume, with a high incidence of OCR scanable coupons and bar-coded return envelopes.

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Marginal credit customers
Consumers who may have had some slow pay problems, but generally pay their bills.

Market value
The price at which a ready, willing, and informed person would buy something; the price property would command in the current market.

Marketing
The process of identifying and communicating with qualified prospects.

Matched Payments
Payments that equal the amount due. The amount due can be either a minimum payment amount or a total balance due (e.g., in the case of a credit card account). This term is typically used in retail lockbox processing. Also known as "full payments."

MICR (Magnetic Ink Character Recognition)
The technology that uses high-speed magnetic and/or optical recognition equipment to recognize magnetic ink printed characters. Usually associated with reading routing, transit and demand information from checks.

MICR Number Method
A check authorization procedure which uses the bank routing/transit numbers, checking account numbers and check number encoded along the bottom of the check.

MICR Reader/Check Reader
An optical or magnetic device used by a subscriber, which reads the MICR Numbers (routing/transit number, check number) encoded along the bottom of the check and communicates that information to the processor during the authorization process.

Monthly Minimum
Minimum amount charged for the subscriber's monthly service.

Mortgage
A written instrument that creates a lien by pledging real property as security for a debt.

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NACHA (National Automated Clearing House Association)
The national association that establishes the standards, rules and procedures that enable depository financial institutions to exchange ACH payments on a national basis.

Negotiation Collection Strategy
The collection technique utilized by NRC wherein the collector works with the debtor to get a debtor's "buy-in" to the repayment plan. This is comparatively different from the more conventional, confrontational collection strategy. The negotiation strategy gets substantially higher numbers of fulfilled debtor payment commitments.

Net Back
The best and truest measurement of collection effectiveness. Net back is calculated by taking the dollar amount collected and subtracting the cost of those collections.

Non-Bank
In a payment system, a financial institution not offering retail banking services.

Non-Sufficient Funds (NSF)
Check return reason for checking account funds not available to cover the check.

Notice of Pre-lien
A document notifying the owner of real property that materials or services are being furnished to his real property, putting him on notice that the one sending it will look to have a lien against the real property if those materials or services are not paid for.

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OCR (Optical Character Recognition)
The technology by which characters and symbols imprinted in non-reflective ink are optically read by remittance processing workstations. The OCR system reads characters by detecting differences in the reflected light from the document as it passes through the processing workstations. These differences are interpreted by OCR electronics, converted to a binary code, and transferred to the system processor. This term is usually associated with retail lockbox processing.

OFX (Open Financial Exchange)
A standard for the exchange of financial data and instructions independent of a particular network technology or computing platform. Major financial institutions and service providers. Enables electronic exchange of financial data between customers and themselves. Currently implement OFX.

Operating Rules
Rules and business practices meant to increase consistency and interoperability among the various financial service providers that will interact with each other and end-users. Examples of operating rules include:

Settlement Timing Requirements
Authorization procedures
Audit and accounting rules
Credit limits

Originator
A financial institution that initiates a wire transfer or automated clearing house (ACH) payment.

Outsourcing
The procuring of services or products from an outside supplier or manufacturer in order to cut costs.

Overdraft
Debt owed by a check writer resulting from a checking account being overdrawn.

Owner financing
A type of financing in which the seller of a tangible item accepts a promissory note as a portion of the purchase price. Also called seller financing.

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Partial
Any part of a payment stream that is less than the full amount due.

Partnership
A common form of joint ownership of a business.

Payee
Person or business that has the right to receive a payment or series of payments and is interested in selling that income stream for cash. (Also called the seller or client.)

Payment
A vehicle to affect the transfer of value. Typically, a transfer of funds from one bank depository to another, but may also transfer funds to or from a debt instrument, such as a credit card. Also Funds Transfer.

Payment Concentration
The process of that takes payments from multiple banks and payment networks and concentrates them into a single format (e.g. lockbox, EDI, and ACH).

Payment Due Date
The date by which the Biller requires payment from the Customer.

Payment Instructions
The Instructions for routing/posting the payment (e.g. into the bank account that the funds should be deposited).

Payment Method
Method used to facilitate and process payment.

Payment Posted Date
The date by which a payment is posted to an account.

Payment System
A set of instructions and procedures used for the transfer of ownership and settlement of obligations arising from the exchange of goods and services.

Payor
The person, company, or government responsible for making payments on an income stream.

PDF (Portable Document Format)
A file format that has captured all the elements of a printed document as an electronic image that you can view, navigate, print, or forward to someone else. PDF files are created using Adobe Acrobat, Acrobat Capture, or similar products. To view and use the files, you need the free Acrobat Reader, which you can easily download. Once you've downloaded the Reader, it will start automatically whenever you want to look at a PDF file.

PFM (Personal Finance Management or Manager)
Software used by a Customer to manage his/her checking account, etc. Often includes categorization, reporting, and graphing capabilities.

Personal guaranty
A contractual agreement between a funding source and a seller, whereby the seller assumes personal responsibility and liability for the obligations of the income stream.

POS (Point of Sale)
Where a transaction takes place. Usually at a merchants brick and mortar location but also includes telemarketing (phone) and Internet sales.

POS Terminal
Small gray box with a numeric keypad on it that is given to all subscribers using a processor. Used for entering information about the check writer, the device is programmed to send this information to the processor.

Portfolio
A group or package of income streams of the same type.

Power Dialer
A high-speed telephone dialing system that dials telephone numbers in rapid succession. At one time, power dialers were recognized as state-of-the-art equipment in any large collection agency, but the predictive dialer has eclipsed the power dialer's usefulness.

Predictive Dialer
The newest generation of high-speed telephone dialing systems. The predictive dialer, in addition to dialing calls, also monitors the length of each call and develops an average call length. Once the system knows the average call length, the predictive dialer can make the next call and "hand it off" to the collector as soon as the first call has ended. This system maximizes the on-phone time of each collector, and the overall result is, more debtors are contacted in a shorter period of time. All NRC facilities utilize predictive dialers.

Presenter
Individual presenting a company check.

Preventive Maintenance (see also Fixed Fee Philosophy)
The concept of using NRC's collection services early in the bad debt delinquency cycle to prevent serious bad debts before they occur.

Privately held
Owed to a private individual or business rather than to a bank or other financial institution.

Profit and loss statement
A financial statement that shows a historical record of a business' income and expenses.

Promissory note
A written promise to pay a specified amount to a specified party over a certain period of time.

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Real property
Real estate.

Receivables Analysis
A service provided by CFSI account executives to determine the collection needs of a prospective client. The receivables analysis includes an in-depth examination of a credit grantor's credit and collection policies, the development of a current aged analysis, and making recommendations to enhance the creditor's internal and external recoveries. There is no charge for the analysis, and it is performed at the credit grantor's place of business.

Refer To Maker
Unbankable returned check due to reasons such as conflicting or missing information on the check.

Registration
The process of a Biller establishing a relationship with a BSP.

Remittance Information
The information required by the Biller to effectively post customer bill payments.

Remittance Method
The method used to deliver funds and remittance information.

Remittance Processing
A collection and processing service provided to clients by third-party providers, such as ACH Direct or a bank. These providers collect payments from a dedicated postal box, to which clients have directed customers to send payment. To minimize mail, collection and availability float, remittance providers make several mail pick-ups per day, process the payments immediately, deposit the funds and provide information to update clients' receivables.

RPS (Remittance Processing Service)
An electronic routing and settlement service that accepts previously captured and authorized payment transactions from members for delivery to other financial institutions.

Replevin:
A legal proceeding in court to seize property (other than real estate) given as security for a debt that is in default.

Reserve
An amount a funding source holds in its account to cover potential payment defaults. After a certain time period has passed, the funding source rebates the reserve to the client less any fees or charges for delinquency. Also called a bad debt reserve.

Returned Check
A check that was presented for payment which was dishonored by the check writer's financial institution.

Risk Management Alternatives (RMA)
NRC's parent company. Headquartered in Atlanta, Ga., RMA operates collection operations centers from more than 25 locations across the country and is recognized as one of the top five collection organizations in the United States today (from a field of more than 6,000 collection sources).

RMAI (Risk Management Alternatives International)
The NRC-RMA organization, located in England that provides Pan-European collection services.

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SCRD (Secondary Contingent Recovery Division)
The Secondary Phase of NRC's Tandem Program. It is a "workout division" specializing in second placement, hard-core debtors. NRC charges a contingent fee when clients elect to transfer accounts that did not pay in the service's Primary Phase into this part of the Tandem Program. Litigation, when warranted, is offered as a remedy in the Secondary Phase-at NRC's option. NRC pays all court costs and filing fees (and is reimbursed from the first monies received from the debtor).

Satisfaction
The discharge of an obligation by paying a party what is due (i.e., the satisfaction of an IRS lien or the satisfaction of a mortgage).

Seasoning
The length of time payments have been made on a note or other debt instrument.

Second Placement (or seconds)
Accounts assigned to a collection agency for collection that were previously worked by another agency.

Secondary market
The marketplace where individuals and businesses can sell privately held income streams to funding sources for cash.

Securitization
The bundling and resale of debt instruments to investors; permitted only for parties licensed and regulated by the SEC.

Security interest
An interest in property, other than real estate, which is given as security for a debt or other obligation. A security interest is created by execution of a security agreement and one or more financing statements under the Uniform Commercial Code.

Seller
The person or company that is holding a debt instrument and wants to sell it.

Service Initiation
The overall term encompassing registration, enrollment and activation.

Servicing
The collection of payments of interest and principal, and trust fund items such as fire insurance, taxes, etc., on a note by the borrower in accordance with the terms of the note. Servicing by the lender also consists of operational procedures covering accounting, bookkeeping, insurance, tax records, loan payment follow-up, and delinquent loan follow-up and loan analysis.

Settlement
As the sales transaction value moves from the merchant to the acquiring bank to the issuer, each party buys and sells the sales ticket. Settlement is what occurs when the acquiring bank and the issuer exchange data or funds during that function.

Skip Tracing
Finding hard-to-locate debtors known as skips (i.e., accounts submitted with invalid addresses and/or telephone numbers). Skip tracing is included in the Tandem Program's Secondary Phase (SCRD). Accounts found to have invalid addresses or telephone numbers in the Primary Phase will automatically be transferred to the Secondary Phase where skip tracing may be employed.

Sole proprietorship
A business owned and operated by an individual.

Standard Industrial Classification (SIC) Code
A four (4) digit number assigned to businesses to identify their specific trade category.

Statement/Notice
An electronic or paper document sent to a customer/agent that does not have a payment due associated with it.

Status Reports to Credit Bureaus
On selected Tandem systems, non-responsive debtors will be reported to national credit bureaus during the service's Secondary Phase. Placing a notation in the credit bureau report on a non-paying debtor can be an effective collection technique.

Subordination
The act of a creditor acknowledging in writing that a debt due him or her by a debtor shall be inferior to the debt due another creditor by the same debtor.

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Tail
The payment stream and/or balloon payment of an income stream subsequent to another party's right and interest in the income stream. Usually the back half of the payments stream when another party has purchased the front half.

Tandem
The name of NRC's two-phase collection program. The Tandem Program consists of a primary phase collection program followed by an optional, secondary (or SCRD) phase.

Tandem Online
The Internet-based Tandem Program enables clients to place accounts directly over the Internet, to update account balances and account statuses, and review their accounts on the Internet 24 hours a day, seven days a week. The service eliminates the delays and expense associated with telephone calls and mail, and generally, produces higher results.

Tangible personal property
Personal property other than real estate, such as cars, boats, or other assets.

Time value of money
Concept that addresses the way the value of money changes over a period of time.

Telephone Bill Payment
A service that permits a customer to pay bills electronically. The customer gives a corporation the authority to debit his or her account for a specific amount or within a specified range of amounts.

Thick Consolidation
A type of third party consolidation where both the bill summary and bill detail are available on the consolidator's web server.

Thin Consolidation
A type of third party consolidation where the bill summary is available at the consolidator's web server and the bill detail is available at the Biller's web server.

Title commitment
A commitment on the part of the insurer, once a title search has been conducted, to provide the proposed insured with a title insurance policy upon closing.

Title insurance
Title insurance can benefit either the payor or the payee. Should the beneficiary suffer any damages due to clouded or false title to real estate, title insurance recompenses the damaged party to the extent of the damages.

Title policy
An insurance policy that insures a party against loss due to a defective title.

Transaction
Any event that causes a change in an organization's financial position or net worth, resulting from normal activity. Advance of funds, purchase of goods at a retailer or when a borrower activates a revolving line of credit. Activities affecting a deposit account, carried out at the request of the account owner. One example of a transaction is the process that takes place when a cardholder makes a purchase with a credit card.

Trial balance printout
A spreadsheet that lists all loans in a portfolio and their payment schedule. Usually required for a portfolio transaction.

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Uncollected Funds
Reason for returned check: the amount of a check is greater than the amount in the debtor's checking account.

Uniform Commercial Code (UCC)
Standardized set of guidelines protected by law that set down how business transactions must be conducted.

Unmatched Payments
Payments that differ from the amount due. The amount due can be either a minimum payment amount or a total balance due (e.g., a credit card account). This term is typically used in retail lockbox processing. Also known as "partial payments" or "unequal payments."

Unseasoned
A lease or note that has had few, if any, payments made.

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Wholesale Lockbox
A collection and processing service provided to clients by third-party providers, such as ACH Direct or a bank. These providers collect business-to- business (B2B) payments from a dedicated postal box to which clients have directed their customers to send payment. (See Remittance Processing.) The payment stream is typically high dollar and low volume, with a high incidence of non-standard invoices and check-only payments.

Whole-tale Lockbox
A collection and processing service provided to clients by third-party providers, such as ACH Direct or a bank. These providers collect business-to-business (B2B) payments from a dedicated postal box, to which clients direct their customers to send payment. (See Remittance Processing, Wholesale Lockbox and Retail Lockbox.) This service is designed for customers who have higher-dollar receivables and a lower volume of payments than typical of traditional "retail lockbox." Payments are usually accompanied by a standard invoice that contains OCR scanable data. Property management and leasing industries typically have payment characteristics that fall into this category.

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XML (Extensible Markup Language)
Allows the author to extend and customize basic HTML formatting by creating proprietary tags and text behaviors. XML is meant to emphasize intelligent and logical formatting within technical documents in order to streamline searching and categorizing, and to ensure total cross-browser compatibility.