What is Factoring?
Factoring or "loans against receivables" mean that a company borrows money with its invoices as security or sells the invoices to a credit institute/bank specialized on collecting payment of invoices. A company may choose to sell its customer invoices to avoid the handling cost, a type of outsourcing, and/or to temporarily improve the cash flow by not having capital tied-up in accounts receivable. Another reason may be to bring down the credit risks in this way.
The MONITOR system supports factoring. Via the supplement function Factoring export, the EDI Links procedure, it is also possible to export factoring data in order to send it to the factoring company by file.
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