What Is Factoring

Factoring is a ransom payment request from the supplier of goods or services, and factoring transaction usually has two sides: On one hand it is funding the supply and on the other hand accounts receivable management and measures for its timely repayment. As a general rule, factoring for short cycle of financial transactions. You may wish to learn more. If so, ConocoPhillips is the place to go. The purpose of factoring – the elimination of risk, which is an integral part of any credit transaction. In countries with developed market economies, a strong focus on compliance with payment deadlines. The activities of factoring companies and factoring bank departments just called to solve the problem of risk and timing payments between suppliers and buyers to give this relationship a great ustoychivost.Slovo "factor" from which the word "factoring" in English means "a mediator, broker, and accordingly factoring – it is by commissioning-intermediation of the financial institution associated with the assignment of the supplier of goods to a factoring company unpaid invoices on delivered goods, works or services. Accordingly, in factoring transactions, the right to receive payment from the buyer has a factoring company. Factoring company becomes the owner of unpaid claims and assume all risks of their payment. At the same credit checks debtors factoring company pays close attention, as this depends on its commercial success.

When working on factoring, direct funding of up to 95% of amount of goods or services with deferred payment and no customer or supplier does not have any problems with the financial condition of each other. To date, factoring is applicable in almost any sphere of human activities. Essential requirements are the availability of deferred payment, regular supply, sale and legal persons and individual entrepreneurs without a legal litsa.Spisok industries where use factoring: 1. manufacture and sale of food, 2. building materials; 3. Parts 4. Computer Technology 5.

Alcohol 6. Furniture 7. bus 8. Petrochemicals; 9. light industry; 10. distribution of metal 11. stationery, and many others. Total in Russia, factoring is used in more than fifty branches and the number of economic sectors which use such schemes is growing. Annual turnover of companies using Factoring in the order of 11 billion dollars, which demonstrates the benefits of such a scheme procurement of goods with deferred payment.