Invoice factoring is a financial transaction in which a company sells its receivable accounts, such as invoices, for cash. It is used to maintain a company’s working capital and prevent cash being tied up in unpaid invoices.
This process is commonly used to create financial stability and maintain cash flow between raising an invoice and being paid. Invoice factoring allows you to hold control over your balance sheet and continue business operations without cash flow restrictions, giving you confidence in your business activity.
Although your receivable accounts are no longer in your possession, the processing and chasing of payment remains your responsibility. This ensures confidentiality, protecting your business reputation while allowing you to continue normal business operations with full working capital.
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