djamal-soft
الأربعاء، 30 سبتمبر 2015
Factoring is a concept used in modern business ventures to refer to the action of selling receivable accounts to third party companies who have commercial interests at hand. This is a swifter way for enterprises to acquire finances as compared to the normal payments made by their customers during any transaction activity. This is the reason why knowledge regarding business receivable factoring is important.
A factor is an enterprise that offers quick money to another enterprise and this procedure is championed by very many attributes. These characteristics depend on the recipient of the funds allocated in terms of their ability to pay back the money they owe. For instance, stipulated amount of time and payment rates are normally issued to the recipients.
Funds allocated during this process can either be refunded directly or indirectly. Direct modes entail paying exact amount of cash borrowed inclusive of the interests. On the other hand, the indirect ones include the factor accessing funds at intervals through customers who receive certain goods and services.
Money obtained by an enterprise from factoring is very different from that obtained from a bank in form of loans. This is brought about by the funding agreements stipulated in both practices. Funds from factors are quite flexible as compared to those gotten from banks on lending occasions. The flexibility can be found in the interest rates and other payment conditions.
Invoices are very essential in any business process for they depict the amount of money paid by customers after they have received certain goods and services. Most companies use invoices as a tool to regain their money from lending endeavors.
It usually takes a maximum of one day for enterprises to receive money from third party sources during times of need. The lesser amount of time it takes for them to receive the cash, the more effective the problem solving process becomes hence efficiency and sustainability in delivery of services and commodities.
This financial activity began several decades ago as trade was at its budding stages from all around the world. Its need rose as urbanization was taking place because during this phase, more profit oriented enterprises were being built. Increasing consumer needs driven by their tastes and preferences also necessitated this need.
Overall, consumers are entirely comprised of consumers and in business, surplus production of goods meets increasing demands of the same. Most human activities depend on these consumers for profit making hence gradual economic development.
A factor is an enterprise that offers quick money to another enterprise and this procedure is championed by very many attributes. These characteristics depend on the recipient of the funds allocated in terms of their ability to pay back the money they owe. For instance, stipulated amount of time and payment rates are normally issued to the recipients.
Funds allocated during this process can either be refunded directly or indirectly. Direct modes entail paying exact amount of cash borrowed inclusive of the interests. On the other hand, the indirect ones include the factor accessing funds at intervals through customers who receive certain goods and services.
Money obtained by an enterprise from factoring is very different from that obtained from a bank in form of loans. This is brought about by the funding agreements stipulated in both practices. Funds from factors are quite flexible as compared to those gotten from banks on lending occasions. The flexibility can be found in the interest rates and other payment conditions.
Invoices are very essential in any business process for they depict the amount of money paid by customers after they have received certain goods and services. Most companies use invoices as a tool to regain their money from lending endeavors.
It usually takes a maximum of one day for enterprises to receive money from third party sources during times of need. The lesser amount of time it takes for them to receive the cash, the more effective the problem solving process becomes hence efficiency and sustainability in delivery of services and commodities.
This financial activity began several decades ago as trade was at its budding stages from all around the world. Its need rose as urbanization was taking place because during this phase, more profit oriented enterprises were being built. Increasing consumer needs driven by their tastes and preferences also necessitated this need.
Overall, consumers are entirely comprised of consumers and in business, surplus production of goods meets increasing demands of the same. Most human activities depend on these consumers for profit making hence gradual economic development.
About the Author:
Connor G. Schiffman has 27 years of experience in commercial lending including factoring, asset based lending, and banking. Connor helps readers manuver through all the account receivable options providing practical and useful knowledge to better understand all your lending options. If you want to learn more about Accounts Receivable Factoring Company he recommends you check out www.receivablefactoring.net.
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