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 Recourse and Non recourse Factoring

(i) factoring commission, (ii) discount charge and (iii) cost of long term funds invested in receivables.

Benefits Associated with Recourse Factoring

They are in terms of the costs associated with the in house management alternative with the exception of term, namely, bad debt loss.

Benefit Associated with Non Recourse Factoring

The above plus the bad debt losses relevant to in house management of receivables.

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