factoring
fac·tor
F0007500 (făk′tər)factoring
(ˈfæktərɪŋ)Noun | 1. | factoring - (mathematics) the resolution of an entity into factors such that when multiplied together they give the original entity |
单词 | factoring | |||
释义 | factoringfac·torF0007500 (făk′tər)factoring(ˈfæktərɪŋ)
factoringfactoring[′fak·tə·riŋ]factoringfactoringa form of asset financing based on the sale of book debts. Essentially, factoring involves the purchases from suppliers of accounts payable to them by customers to whom they have provided goods or services; such accounts are referred to as ‘receivables’.factoringFactoringAccounts Receivable Financingfactoringthe provision of finance (and other related services) by one firm (the factor) to another firm (the client) by discounting its unpaid INVOICES issued to customers, i.e. purchasing the client's TRADE DEBTS.Factors typically provide immediate cash up to the value of 85% of the client's invoices, thus releasing ready money for the client to use for WORKING CAPITAL purposes. The remaining balance, less the fee for providing the facility, is paid over when the factor has received payment from the customer. In addition, factors are usually prepared to undertake the administration of their clients' sales ledgers, assess credit risks and insure clients against bad debts, thus saving the client the trouble and expense of maintaining his own sales accounts and credit control departments. Factoring extends to both domestic and export sales. It can be especially useful in the latter context where credit periods on exports are, on average, two to three times longer than on domestic sales and where there are additional complications arising from dealings with relatively unknown foreign customers and an unfamiliarity with local customs and laws. See EXPORTING, DEBTORS, CREDIT CONTROL. factoringa financial arrangement whereby a specialist finance company (the factor) purchases a firm's DEBTS for an amount less than the book value of those debts. The factor's profit derives from the difference between monies collected from the DEBTS purchased and the actual purchase price of those debts. The firm benefits by receiving immediate cash from the factor rather than having to wait until trade debtors eventually pay their debts and avoids the trouble and expense of pursuing tardy debtors. See CREDIT CONTROL.factoring
Synonyms for factoring
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