WORKING CAPITAL FINANCING
Cost Associated with In house Management (i) cash discount, (ii) cost of funds invested in receivables, (iii) bad debts, (iv) lost contribution on foregone sales and (v) avoidable cost, of sales ledger administration and credit monitoring. Costs Associated with...
WORKING CAPITAL FINANCING
Reduction of Cost and Expenses Since the client need not have a special administrative set up to look after credit control. He can have the benefit of reduced by way of manpower, time and efforts. With the steady and reliable cash flow by factor till clients have many...
WORKING CAPITAL FINANCING
Higher Credit Standing There are several reasons why factoring should improve a client’s standing. With cash flow accelerated by factoring, the client is able to meet his liabilities promptly as and when they arise. The factor’s acceptance of the...
WORKING CAPITAL FINANCING
TABLE Balance Sheet: Post Factoring Scenario The impact of factoring on the balance sheet as revealed by Tables is three fold. Off balance Sheet Financing As the client’s debts are purchased by the factor, the finance provided by him is off the balance sheet and...
WORKING CAPITAL FINANCING
Advantages and Evaluation Advantages Factoring has several positive features from the point of view of the firm (client of the factor). Some of these advantages are briefly discussed as follows: Impact on the Balance Sheet The impact of factoring on the balance sheet...
WORKING CAPITAL FINANCING
Provision of Collection Facility The factor undertakes to coiled the receivables on behalf of the client relieving him of the problems involved in collection, and enables him to concentrate on other important functional areas of the business is also enables the client...
