About

When referring to the amount or the quantity of items or the unit price of the goods, “about” means plus or minus 10%. (Article 39 of UCP 500).

Acceptance

The undertaking written on the face of a bill of exchange and signed by the drawee to pay the face amount of the bill on the due date, (usually in exchange for documents of title to goods shipped on documents against acceptance terms). An alternative name for an accepted bill of exchange.

Acceptance Credit

A documentary credit which requires the beneficiary to draw a usance bill of exchange for subsequent acceptance by the issuing bank or the advising bank or any other bank stipulated in the credit. Is primarily designed to provide finance for the applicant. 

Accepting Bank

The bank which accepts a bill of exchange/draft drawn under a documentary credit. 

Accountee

Another name for the applicant/opener of a documentary credit i.e. the importer = the person for whose account the transaction is made.

Accounting Ratios

Measurement techniques which are used by analysts and investors to compare the performance of businesses across industry sectors, e.g. Return on Capital, Acid Test etc.

Accrual

An accrual is made to recognise that some financial charge has been incurred that will eventually have to be paid but is not yet due. For example, where interest is calculated every month but only paid every quarter. 

ACH

An automated clearing house (ACH) is a service which enables the management and settlement of electronic transactions within a given country and specified clearing cycle period, operating typically on working days only. In the UK, this function is performed by BACS Ltd, which is owned by a number of banks and financial institutions on behalf of the payments industry.

Acquiring

Payment business relating to acceptance of credit and debit cards by shops/retailers/merchants. Also known as Merchant Services and Card Processing. 

Acquisitions

This facilitates the management of a company to acquire a target business, which complements or fills a gap in their product or service range. 

ADDACS

Automated Direct Debit Amendments and Cancellation Service. A BACS service that allows paying banks to inform companies (Originators) of changes to Direct Debit Instructions. Changes, which can be received in either electronic or paper format, may include amendments to the customer’s account details or a request from the customer to cancel a Direct Debit Instruction. See Mailbox.

ADSL

Way of sending digital material down existing copper telephone lines and of giving most of the bandwidth to the download part. Stands for Asymmetric Digital Subscriber Line. Fast internet access (in comparison with a dial-up modem) is available through this method, although the more subscribers there are using the same local lines, the slower ADSL will become. 

Advance Payment Guarantee

A Guarantee issued to allow a buyer to recover an advance payment made under a contract or order should its supplier not fulfil its contractual obligations.

Advice of Fate

The Collecting Bank’s advice to the Remitting Bank notifying it of non- payment/non-acceptance of a bill of exchange, or of acceptance of a bill and the relevant maturity date. 

Advising/Advising Bank

Documentary Credits-The act of a bank notifying/conveying the terms and conditions of a documentary credit to the beneficiary. The advising bank is the issuing bank's agent, usually located in the beneficiary's country. Guarantees-A foreign bank requested by the issuing bank (the Guarantor) to forward the latter's original Guarantee to the Beneficiary. The advising bank is not a party to the Guarantee therefore it does not incur any liability under the guarantee.

Air Waybill

A receipt of goods issued by the airline company. Is only a receipt, not a document of title, so is usually consigned to the issuing bank. 

All Risks

All Risks` usually relates to the inclusion of `Accidental Damage cover ` under a policy – that is, damage caused by reason other than the normal Fire, aircraft explosion, Lightning storm flood or earthquake, theft etc. – such as dropping the item or spilling coffee on it. There will still be specific exclusions however.

Amendment

When referring to a Guarantee this is a written alteration to the terms of a Guarantee. Where the amendment imposes a less advantageous term for the Beneficiary, the written acceptance of the Beneficiary will be sought. 

American Express

International banking and finance corporation offering charge cards which can be accepted by Card Processing customers. Retailers must hold an agreement with American Express. 

American Style

An option which may be exercised at any time up to and including the expiry date and for which the funds will be transferred with spot value from the exercise date. 

Amortising

Denotes that the principal amount of the instrument decreases over its lifetime, e.g. swaps, caps or a loan. 

Annual Equivalent Rate

Annual Equivalent Rate.  This is a notional rate which illustrates what the gross rate would be if interest were paid and compounded each year.

Annual Fee

Service charges made yearly, typically for credit cards and some other bank services. 

Annual Management Charge

A charge taken from the fund by the product provider to pay for the cost of running the scheme. 

Annual Percentage Rate (APR)

This is the true cost of the borrowing, including the amount lent, the interest charged and any fees. 

APACS

The Association for Payment and Clearing Services (APACS) is the umbrella body of the payment schemes in operation in the UK. They are responsible for and manage some of the main co-operative schemes in the UK involving banks and building societies, such as BACS and CHAPS. 

Applet

A mini program on a website providing some small interactive function e.g. to make an image move. 

Applicant

For a Documentary Credit this is the person/company, usually the importer, on whose behalf a documentary credit is issued. Also known as the Opener or Buyer.
For a Guarantee this is the party who requests their bank to arrange for the issue of a Guarantee on their behalf. 

Application

A package of computer software programs that do a particular function (e.g. spreadsheets or word processing). 

ARUC

Automated Return of Unapplied Credits. The ARUC service is operated by BACS Ltd. If a credit received cannot be applied to an account, participating banks and building societies can return it electronically to the Originator of the payment, advising that the credit has not been paid to the intended party. An electronic message to the Originator of the payment can be automated on the Originator’s system. This will improve efficiency, reduce timescales in this part of the reconciliation process, and potentially reduce overheads. For information on receiving reconciliation information electronically, see Mailbox.

ARUDD

Automated Return of Unpaid Direct Debits The ARUDD service, via BACS Ltd, allows the paying bank to return a Direct Debit Instruction electronically to the originating company (via their bank). It provides information including the reason why the Direct Debit Instruction has not been paid. See Mailbox. 

Average Rate Option

An option whose final pay-out depends on the difference between its strike price and an average rate rather than a single spot rate. 

Assets

Something the business owns and can use. It may be physical e.g. a building or equipment, or intangible, such as goodwill. 

Asset Securitisation

The substitution of securities for bank loans or other sources of cash-flow or debt obligations (e.g. mortgages). The securities created can then be sold. 

Attachment

A separate file joined onto an e-mail. 

ATV

Average Transaction Value, the average amount spent by customers using plastic cards with a particular retailer. 

AUDDIS

Automated Direct Debit Instruction Service An enhancement to the Direct Debit service. The Originator keeps the original paper Direct Debit Instruction signed by the customer and sends the details to the paying bank electronically to validate and, if accepted, set up the new instruction on its database. See Mailbox.

Audit

An examination and verification of a company's financial and accounting records and supporting documents by a professional, such as an accountant. Larger companies have to have their accounts audited, but smaller companies are exempt.

Authorisation

Relating to cards, authorisation is sought when a customer purchases goods or services with a credit or debit card that exceeds the retailer’s floor limit. The authorisation centre checks for card validity and lost or stolen status before agreeing the transaction. 

Avalise

The act of a bank in guaranteeing payment of a bill of exchange or promissory note by endorsing the reverse of the instrument with the words “good per aval” and signing under the annotation, or by issuing a separate guarantee of payment. 

AWACS

Advice of Wrong Account for Automated Credits The service enables a paying bank to issue an advice, via BACS, to the originator of a payment. The advice explains that the payment has been applied to the recipient’s account, but the incorrect bank account details had been quoted. It will also display the correct details. The originator can then amend the records on their system to avoid further occurrence.