Show benefits of factoring, Financial Accounting

Assignment Help:

Q. Show benefits of factoring?

Factor finance

The factoring company will progress up to 80% of the face value of invoices raised. This would permit Doe Ltd to pay its trade payables promptly and perhaps take advantage of any early payment discounts available. It would as well allow Doe Ltd to finance its growth from sales rather than by seeking external finance.

Reduces administration costs

The factor would invasion the administration of Doe Ltd's sales ledger allowing a reduction in administration costs in the longer term.

Factor expertise

In the areas of credit analysis as well as receivables collection the expertise of the factor is likely to be higher than Doe Ltd's leading to lower bad debts as well as more efficient collection of amounts owed by receivables.

Credit protection

If the factoring is with no recourse Doe Ltd will be effectively insured against the possibility of bad debts although this will be included in the factor's fee.


Related Discussions:- Show benefits of factoring

How much are joe''s shares worth after the stock split?, Joe Shareholder ow...

Joe Shareholder owns 100 shares of Peach Company stock which is currently selling for $100 per share. Peach declares a 2-1 stock split. How much are Joe's shares worth after the st

What is the net cash provided by investing activities, Zoum Corporation had...

Zoum Corporation had the following transactions during 2014: 1. Issued $125,000 of par value common stock for cash. 2. Recorded and paid wages expense of $60,000. 3. Acquired land

Ifrs and benefits in organization, Develop a paper that explains the emergi...

Develop a paper that explains the emerging role of international financial reporting standards and how it affects your particular organization. Your paper should assess the adequac

What is the difference, What is the difference between financial statements...

What is the difference between financial statements prepared from the expanded accounting equation and those prepared from a trial balance?

Content of accounts-trusts accounts, Content of accounts Periodical acc...

Content of accounts Periodical accounts should normally consist of:         1.    Balance sheet of the whole trust;         2.    Capital account;         3.    Income account

Analyse the net worth, Igor and Angela were married in 2005, separated in 2...

Igor and Angela were married in 2005, separated in 2011, and divorced recently. At the time of marriage, each had some investments and personal assets. They both worked during the

Fast - slow and non moving analysis, FSN Analysis: In this method inven...

FSN Analysis: In this method inventory items are classified as per the usage/consumption pattern. They are categorizing as: Fast Moving (F) items are stored in huge quant

Credit reference agencies and credit scoring, Q. Credit Reference Agencies ...

Q. Credit Reference Agencies and Credit Scoring ? A several organisations example Dun & Bradstreet and Standard & Poor provide credit scores and ratings for companies. These ma

Factoring and invoice discounting, The cash flow as well as other benefits ...

The cash flow as well as other benefits of factoring was discussed earlier. Invoice discounting as well offers cash flow advantages. Here selected invoices of superior quality are

Carnival cruise lines , Carnival Cruise Lines This question has two pa...

Carnival Cruise Lines This question has two parts. Answer both parts. Structure your response using headings and subheadings where appropriate. The use of tables and point fo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd