Friday, May 15, 2009

Accounts Receivable Factoring

Account Receivable Factoring Services

Account receivable factoring is a method for obtaining money in advance in exchange for receivable account payments. When a company is owed money in the form of account payments, it can sell these to a third party, which will then keep the funds in exchange for an agreed amount. This process is similar to credit receivable factoring, the fundamental difference being that in credit factoring, payments which have already been made are sold, whereas with account receivable factoring it is debt that is effectively being sold.

Account Receivable Factoring and Debt Collection

Any company which accepts payment in the form of periodical account settlements can make use of account receivable factoring and other debt collection services. In addition to account receivable factoring, companies can also make use of straightforward debt collection, whereby a collection agent is sent on the company’s behalf to contact the debtor and attempt to procure payment. This is preferable to handling debt collection internally, as it helps to keep the company separate from the awkward situation of collection in the minds of debtors.