What Is a Factor?
A factor is an intermediary agent that provides cash or financing to companies by purchasing their accounts receivables.
In short, a factor is a funding source; the factor agrees to pay the company the value of an invoice—less a discount for commission and fees.
팩터는 매출채권을 매입하여 기업에 현금이나 자금을 제공하는 중개 에이전트입니다.
요컨대, 팩터는 자금 조달처이며, 팩터는 수수료와 수수료에 대한 할인을 제외하고 인보이스의 가치를 회사에 지불하는 데 동의합니다.
Factoring can help companies improve their short-term cash needs by selling their receivables in return for an injection of cash from the factoring company. The practice is also known as factoring, factoring finance, and accounts receivable financing.
Key Takeaways
A factor is a funding source; it agrees to pay a company the value of an invoice—less a discount for commission and fees.
The terms and conditions set by a factor may vary depending on its internal practices.
The factor is more concerned with the creditworthiness of the invoiced party than the company from which it has purchased the receivable.
Understanding a Factor
Factoring allows a business to obtain immediate capital in the amount of the anticipated future income due from all outstanding invoices. These invoices are captured in accounts receivable, an asset account on a company's balance sheet, which represents money owed to the company from customers for sales made on credit. For accounting purposes, receivables are recorded on the balance sheet as current assets since the money is usually collected in less than one year.