Date Added: Jan 2010
Accounts receivable factoring is the sale of part or all of a debt that someone owes to your company. When companies purchase a debt through accounts receivable factoring, they pay for your invoice at a discount. They then collect the debt directly from the company who owes you money. Accounts receivable factoring is distinct from using your accounts receivable as loan collateral because you are outright selling some or all of your receivable to a factor, such as a bank or insurance company, at a discount.