factoring

Definition:
Similar to INVOICE DISCOUNTING, but in this instant, the factor takes on responsibility for credit control, debt collection and credit risk. Fees for such a SERVICE are naturally higher than for INVOICE DISCOUNTING. INVOICES are handed over to the factor, who pays sums of money at regular intervals to the client, or when finance is included in the contract, a percentage of the invoice value on invoice presentation. The exact percentage will vary from industry to industry and from firm to firm.

Cross-References:
[services] [invoice] [invoice discounting]

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