Updated on January 10, 2019By Melissa Johnson Comments Off on Factoring Application
Aging Reports. In the aging report, details for the initial application are included. The report mentions the amount that the customers owe and the time they will take to make payment. Usually, customers that make payment within 30 days are considered better than those who take more time.
The Process of Factoring. The buying of accounts receivable at a good ratio of discount is called factoring. The factoring provider offers an upfront payment on invoices that are approved. The factor takes care of the collection process and then releases the balance as soon as the invoice is paid by the customer. The fee is deducted by the factor before the balance is released.
The Cost of Factoring. So, how much will the factoring cost? This is a common question. The cost depends upon the industry, customer strength and the time it takes for the payment to be received. The pricing is also affected by the value of invoices. The rates will be better if the volume is higher.