A way of gaining faster payment of customers’ bills.
Invoices are handled by a specialist factoring company who pay you a percentage of face value and pursue payment from your customers. Factoring tends to suit smaller companies who don’t have a dedicated accounts department.
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on Friday, March 9th, 2007 at 9:10 am and is filed under Word of the fortnight.
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March 27th, 2007 at 11:04 am
Do be careful of personal indemnities where a company’s warranties (promises) under the agreement are guaranteed, usually by individual directors. I’ve had a couple of cases where clients have been visited by huge claims after the company had gone under. I’m not saying that factoring is a bad idea but please read the agreements carefully and sign ‘eyes open’.