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Scooped by Eliza George |
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Eliza George's insight:
Generally, a financial transaction and a type of debtor finance in which a business sells it's accounts receivable (invoices) to a third party (factor) on a fixed discount - is called 'Invoice Factoring'. Mainly if a business has an immediate cash requirement, business will sometimes factor its receivable assets to meet it's present and immediate fund requirements. The business might also factor their future invoices to mitigate the credit-risk.
Invoice factoring is most commonly referred to accounts receivable factoring and some-times accounts receivable financing. Accounts receivable financing is a term more accurately used to describe this form of asset based lending (ABL) using a firm or company’s accounts receivable as collateral.
The invoice factoring is most used term for the trucking and shipping companies, also some staffing companies and recruiting agencies uses factoring. It's most popular and in industries where telling a client that you’ve assigned their invoice might not be a problem. If invoice factoring isn’t common in your own industry, you might get benefit from the invoice financing, which doesn’t require invoice assignments.
To know more about invoice factoring please visit - https://companycompare.co.uk/invoice-factoring/
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