Thursday, September 24, 2009

Invoice Factoring

What is Invoice Factoring?

Invoice factoring is a debt management solution whereby future receivables which have been invoiced are sold to a third party which then assumes ownership of the debt in question. Invoice factoring is provided by some debt management agencies as an alternative to debt collection procedures in which debt is simply collected by the agency on behalf of the client. Invoice factoring is a useful option for companies and individuals which require quick payment and cannot afford to wait until debt has been collected.

The Alternative to Invoice Factoring

Debt collection, the alternative to invoice factoring, can also be highly effective, if the professionals performing the collection know what they are doing and know how to apply the right intensity of pressure to debtors to make a settling of payment more likely. When you hire professional debt collection agents to collect debts such as bad check payments and account payments on your behalf, you may be able to pay according to a fixed commission percentage, a method which can work out well for you and prevent you from having to pay when collection is not fruitful.