Receivables Industry Glossary

Accounts receivable management (ARM) is the end-to-end operating discipline for converting amounts owed to an organization into collected cash or an orderly disposition. It coordinates credit approval and terms, invoicing, payment application, aging, customer service and disputes, delinquency treatment, external placements, receivable valuation, and sale or write-off. ARM spans current and distressed accounts; it is a business process, not one standalone statute.

Charged-off receivables are loan or credit-account balances a creditor has determined are uncollectible and recognized as a loss by reducing the asset’s carrying value—typically through an allowance for credit losses or bad-debt expense, depending on the creditor’s accounting. A charge-off is an accounting and supervisory treatment, not, by itself, debt forgiveness: the claim may remain enforceable and collectible, subject to applicable law.

A collection agency is a business retained by a creditor or debt owner to pursue delinquent receivables that it does not own. It typically works for a contingency fee based on amounts recovered or for an agreed flat or fixed fee. For covered consumer debts, its activities may be subject to the federal Fair Debt Collection Practices Act (FDCPA), Regulation F, and applicable state laws.

Commercial debt collection is the process of recovering overdue money one business owes another for goods, services, or other business-purpose credit. It typically begins with account review and documented payment demands and may proceed to negotiation, enforcement of applicable security rights, or commercial litigation. The governing rules depend on the contract, transaction, collector’s role, and applicable state and federal law.

Commercial receivables are payment rights a business holds against another business arising from a commercial transaction, such as an unpaid invoice, an open-account balance, or amounts owed under a business loan. They may be retained, pledged as collateral, serviced, or sold. Their transfer and enforcement depend on the governing contract, applicable state law, and, for covered transfers, the state’s enacted version of UCC Article 9.

Consumer receivables are obligations or accounts owed by a natural person arising from transactions primarily for personal, family, or household purposes—not business purposes. Under the FDCPA and CFPB Regulation F, covered “debt” includes an actual or alleged obligation to pay money, whether or not reduced to judgment. The term describes the nature of an account; it does not by itself determine whether a particular party is a regulated debt collector.

A debt buyer is a person or entity that acquires ownership of receivables or claims from an original creditor or prior owner, typically through a portfolio sale, and seeks collection, resale, or resolution. The term is not a single nationwide licensing category: federal FDCPA coverage depends on the buyer’s collection role and the debt’s consumer purpose, while state statutes may define and regulate debt buyers more specifically.

A debt portfolio is a packaged group of receivable or loan accounts offered or transferred together, usually under a purchase-and-sale agreement and supported by an account-level data tape. Sellers and buyers commonly segment portfolios by asset class, delinquency stage, outstanding-balance band, geography, and account eligibility. The term describes a commercial transaction pool, not a single statutory category or a guarantee that every listed account is enforceable or collectible.

A Forward-Flow Agreement is a contract under which a creditor or receivables originator and a debt buyer establish recurring sales of qualifying newly defaulted or charged-off receivables over a defined future period. It sets the purchase cadence and the rules for eligible accounts, pricing, volume, data, and transfer, giving both parties a planned framework for repeated portfolio sales rather than negotiating each sale from scratch.

A UCC lien search is a public-record search of state filing-office records for Uniform Commercial Code financing statements—usually UCC-1 filings—indexed against a debtor. It is used to identify reported security interests that may cover business assets, such as accounts receivable, inventory, equipment, or substantially all assets. The results are investigative evidence, not a legal determination that a lien is valid, perfected, unpaid, or senior.