Hi, "Recourse factoring only provides early payment of invoices. It is a loan which is secured against the invoices, and has a value which automatically fluctuates with the amount that the company sells." looking for a clarification on this part "and has a value which automatically fluctuates with the amount that the company sells" How does this work in practice? Does the company sell all of its invoices retrospectively and prospectively? Does it cover sales for a period of time eg all sales over a period of say 3 months? Or a product line? Having issues imagining this in practice.
Hi old.student Factoring is a bespoke arrangement between the two parties ... ... so these points will all need to be pre-agreed between them in their negotations. Best wishes Stuart
is this an example of factoring (not a use I would suggest) might make a good exam question http://www.msn.com/en-gb/money/bank...ut-of-bank-manager/ar-AAdQGlZ?ocid=spartandhp
To add to Stuart's responses... It is very common for some businesses to factor some/all of their invoices (by £/customer/due date etc). Technology means invoicing systems can automatically post new invoices to the factor as soon as they are raised, monitor payment times/overdue invoices etc.
