Explore BrainMass

Explore BrainMass

    Factoring of accounts receivable

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Define the factoring of accounts receivables. How does factoring affect cash management? Explain the difference between factoring and accounts receivable financing.

    © BrainMass Inc. brainmass.com December 15, 2022, 8:09 pm ad1c9bdddf
    https://brainmass.com/business/accounts-receivable-management/factoring-accounts-receivable-276723

    Solution Preview

    In factoring of accounts receivables, the accounts receivables are sold to a factor which then provides cash to the company. Thus through the use of factoring the company is able to speed up its cash collection which would otherwise be collected when the credit period was over. In factoring the factor becomes the owner of the receivables and the debtor would be required to pay directly to the factor now and not to the business which originated the sale. Factoring could be either with recourse or without recourse. In a with recourse ...

    Solution Summary

    The solution explains the factoring of accounts receivable and its effect on cash management.

    $2.49

    ADVERTISEMENT