MANAGEMENT

Detailed explanation-1: -Factoring is a service whereby the factor is responsible for all the credit control and debt collection from the buyer and it also provides protection from any bad-debt losses to the firm. A business will sometimes factor its receivable assets to meet its present and immediate cash needs.

Detailed explanation-2: -Full Factoring This is advance, non-recourse factoring where the factor performs all the services of factoring including financing, collections, sales ledger administration and credit protection.

Detailed explanation-3: -Factoring involves the sale of receivables to a finance company, which is called the factor. Under a factoring arrangement, the customer is notified that it should now remit payments to the factor. The factor assumes collection risk. Thus, the transferor has no further involvement with customer payments.

Detailed explanation-4: -Definition: Factoring implies a financial arrangement between the factor and client, in which the firm (client) gets advances in return for receivables, from a financial institution (factor).

Detailed explanation-5: -In maturity factoring, the factoring agency does not provide any advance to the firm. Instead, the bank collects the sum from the customer and pays to the firm, either on the date on which the amount is collected from the customers or on a guaranteed payment date.