Data Protection Act (DPA)

This legislation regulates the recording and processing of personal data, on computer or structured manual (paper) files, which identifies, and relates to, individuals. For business purposes, the Act applies to individuals, sole traders, partnerships and sureties.

DC Bills

Bills drawn under documentary credits. 

Debenture

A bond or security guaranteed or backed by the issuer rather than by a specific security against a particular asset.

Debit

The means of decreasing the balance of the account (or increasing an overdrawn position) e.g. taking cash out or issuing a cheque. 

Debit Card

This card can be used to purchase goods and services and will debit the amount from your bank current account. HSBC Bank issues Switch and Solo cards. Other debit cards include Visa Delta and Electron. Debit cards can only be processed through electronic terminals.

Debt Finance

Finance raised through borrowing money from external sources such as banks, building societies etc.

Debtors

A party or parties who owe a business money or monies in respect of goods and/or services received. If a business offers its customer credit terms, it will create debtors; customer's who owe it money.

Default

Term used to describe a company or individual’s failure to honour their obligations under a contract or agreement.

Default Bond/Guarantee

See Conditional Guarantee.

Deferred Payment Credit (DPC)

A documentary credit that allows a nominated bank, or the issuing bank, to effect payment against the documents presented at a future maturity date as specified or determinable from the wording of the credit.

Delayed Drawdown

When a borrowing facility has been arranged by a customer but is not called upon immediately. There can sometimes be a charge for this service.

Delivery Date

The date on which funds will be transferred. For an option, this is usually spot value from the expiry date.  

Demand

See Call.

Demand Guarantee

A term used to describe a Guarantee that is payable upon receipt by the Guarantor of the (first) conforming demand, without the need for the Beneficiary to make a subsequent (second) demand, or for the bank to satisfy itself that default has occurred.

Demurrage

A charge made by a shipping company or a port authority for failure to load or remove goods within the time allowed. 

Depreciation

The amount by which an asset falls in value within a given period (i.e. a financial year), also called actual depreciation. Accounting depreciation can differ to actual depreciation. Assets owned by a business (e.g. cars, machinery etc.) are depreciated each year over their useful life until their value is zero in the business' balance sheet. The amount of accounting depreciation, also called the "charge for depreciation" can be used to reduce taxable profits, thereby reducing a company's tax bill.

De-recognition

The process of transferring assets off-balance sheet. This can be achieved by selling them to a leasing company and leasing them back using an operating lease.

Derivative

An instrument whose value is dependent upon changes in one or more underlying market prices. For example, interest rate swap or currency option.

Designated Funds

Funds held by a business (typically a solicitor or accountant) on behalf of another. The funds in the bank account are held in this specific client’s name.

Desk Top Publishing (DTP)

A program or group of programs that allow a user to design and produce professional looking content, design and artwork all from their own PC.

Deterioration of Stock

This covers damage to frozen food due to breakdown or power interruption of the business freezer unit – a frequently required extension for shops and restaurants. 

Development capital

To grow and expand an existing company, for example, to finance increased production capacity, product development and to provide additional working capital. Also known as 'expansion' or 'growth' capital.

Dial Up

Access to the internet via your browser and a modem which is internal to or external to your computer. 

Digital Certificates

A digital certificate is sometimes referred to as an ‘electronic signature’. Digital certificates are issued by an organisation to identify an individual. The organisation then knows that an electronic instruction, such as a payment, has been generated and sent by the known (bona fide) individual – who may be operating on behalf of a known company. A digital certificate is a piece of technology that will reside on the identified individual’s computer system. It is used to communicate with the organisation. For use over the internet, digital certificates can be browser based (virtual) or token based (physical), such as a smartcard or card reader.

Diner’s Card

Charge card issued by Diner’s Club, a division of Citigroup, which can be accepted by Card Processing customers. Retailers must hold an agreement with Diner’s Club.

Direct Credit

Direct credit is typically a generic term used to describe an electronic payment from one business to another business or individual. The term is also used by BACS Ltd in the UK, referring to the electronic payments service they operate as part of the ACH (automated clearing house) function.

Direct Debit Collection

Describes the collection of funds from the subscriber by the Originator. The originator issues an electronic file to the subscriber’s bank, via BACS, to collect the payment due under the rules of the Direct Debit scheme.

Direct Debit Guarantee

Under the rules of the Direct Debit scheme, if there is any dispute or error in the Direct Debit claim, the subscriber can demand an immediate refund through their bank. The bank will reimburse the subscriber’s account and claim the money back off of the Originator. The originator will then contact the subscriber to settle the dispute. The guarantee only applies in the UK. 

Direct Debit Originator/OIN

A company that wants to collect regular payments electronically from its customers using the Direct Debit scheme. The company will have been sponsored into the Direct Debit scheme by their bank and enabled to initiate Direct Debit payment collections. Once set up, the Originator will be issued with an Originator’s Identification Number (OIN). This is unique to the company and is recognised by the scheme and participating banks and building societies. The OIN will always be printed on a Direct Debit Instruction.

Direct Guarantee

A Guarantee issued by the Applicant's bank directly to the Beneficiary.

Direct Debit(ing)

Direct Debit(ing) is a generic term for a payment collection service operated by BACS Ltd, where a subscriber provides an instruction to an Originator to allow payments to be collected from the subscriber’s account. An originator, sponsored by a bank and conforming to the rules of the Direct Debit (DD) scheme, creates and sends an electronic instruction to a subscriber’s bank or building society (via BACS) to collect (debit) funds from the subscriber’s account and pay into the originator’s account.  This service is most appropriate for making regular payments of fixed or variable amounts. For fixed amounts of a given duration, e.g., a loan repayment, the subscriber will usually sign an agreement that explains the terms of the payments. For on-going payments of variable amounts, e.g., a telephone bill, the originator is obliged to inform the subscriber in advance as to the amount of the payment and the intended collection date. This service is only available within the UK.

Direct Debit Instruction

The contractual, paper agreement signed by a subscriber for goods or services from a company (the Originator) where the subscriber agrees to repay monies owed using the Direct Debit scheme. The Direct Debit Instruction (DDI) also acts as the authority from the subscriber to their bank to allow the originator to debit funds from the subscriber’s account, in accordance with the agreement. Note that it is the originator who is responsible for instigating the electronic payment instruction for each collection. There is also a new scheme, referred to as the ‘paperless’ Direct Debit, where a customer subscribes to pay the company by Direct Debit over the telephone or via the internet, without physically signing an agreement.

Director

One of several individuals elected by a company's shareholders to establish company policies, including selection of operating officers and payment of dividends. 

Discounted Cash Flow

A technique for assessing the present value (i.e. the value today) of future income and payments which takes account of the value of money over time.

Discounting

The term used to describe the act of purchasing an accepted usance bill of exchange for an amount less than its face value.

Discrepancy

Any deviation from the terms and conditions of a Documentary Credit or Guarantee, or in the documents presented thereunder, or any inconsistency between the documents themselves. 

Dishonour

Non-payment or non-acceptance. 

Disposal

Sale of an asset at the end of an agreement by the asset’s owner. 

Dividend

A sum paid by a company to a shareholder as a direct financial reward for holding the company’s shares. It is the income received from an investment in the company’s shares.

Documentary Credit (DC)

A conditional undertaking by a bank to make payment, often abbreviated to “credit”. More precisely, it is a written undertaking by an issuing bank, on behalf of an importer (the applicant), that payment will be made for goods or services supplied by an exporter (the beneficiary), provided that the exporter complies with all the terms and conditions established by the credit.

Documents

The commercial documents used in documentary credit transactions, e.g.. Air Waybill, Bill of Lading, Inspection Certificate, Insurance Certificate, Packing List etc.

Documents Against Acceptance - (D/A)

The instruction given where shipping documents are released against acceptance of the bill of exchange by the buyer, agreeing to pay on/at a future date.

Documents against Payment - (D/P)

An instruction given where shipping documents are released to the drawee of a bill of exchange only on payment. Also known as Cash Against Documents.

Documents of Title

Documents that give their owner, title to the goods, i.e. Bill of Lading.

Domain Name

Label given to an individual internet site.

Domestic Contents

As the name suggests, this title relates to Personal contents of the insured, normally covered under a household policy but sometimes included under some business contracts such as Public Houses and Homeworker style policies.

Domestic Guarantee

A Guarantee issued by a bank resident in the UK where both Applicant and Beneficiary are also UK based. 

Draft

A cheque issued or drawn by a recognised bank and treated as cleared funds. You can obtain a draft (or banker’s draft) from your bank for a small fee. This is useful for making large value payments where cleared funds are required and where it maybe risky using cash (a personal cheque is not treated as cleared funds you have to wait for the cheque to clear before being able to use the funds). For International Trade purposes see Bill of Exchange.

Draw

To write a cheque/bill of exchange.

Drawee

The person to whom a bill of exchange/draft is addressed and who is expected to accept and/or pay it upon presentation. (Note: for Documentary Credit bills, the drawee is usually the DC issuing bank).

Drawee bank

The bank upon which a cheque, or a cheque of a customer of that bank, has been issued or drawn. 

Drawer

The person who issues the bill of exchange/draft/cheque. 

Drawing

A presentation of documents under a Documentary Credit.

Drawn

“where is a cheque drawn?” – bank and branch. “who is a cheque drawn on?” – the name of the person who signed the cheque. 

Due date

The day or date when a payment needs to be made/completed. In the case of some payment methods, account must be taken of the processing time required to complete the payment, e.g., three working days. So in many cases the payment must be initiated three working days before the due date. 

DVD

Used for software and especially good for multimedia such as video. Looks like a CD but is 5" and double sided. Like a smaller version of a laser disc - if you can remember them!