{"id":31949,"date":"2015-05-27T10:11:13","date_gmt":"2015-05-27T10:11:13","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=31949"},"modified":"2024-04-03T13:17:29","modified_gmt":"2024-04-03T07:47:29","slug":"potentiality-of-factoring-as-a-source-of-short-term-finance","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/potentiality-of-factoring-as-a-source-of-short-term-finance\/","title":{"rendered":"Potentiality of Factoring as a Source of Short-term Finance"},"content":{"rendered":"<p style=\"text-align: center\"><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/05\/Potentiality-of-Factoring-as-a-Source-of-Short-term-Finance.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32013\" src=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/05\/Potentiality-of-Factoring-as-a-Source-of-Short-term-Finance.jpg\" alt=\"Potentiality of Factoring as a Source of Short-term Finance\" width=\"275\" height=\"183\" \/><\/a><\/p>\n<p>Factoring is becoming popular all over the world in view of the variety of services<br \/>\nrendered by factors to business organisations. Its importance has tended to increase in<br \/>\nrecent years owing to growing industrialisation and consequential growth in the volume<br \/>\nof industrial production and sales. A factor, by dint of the function of buying debts<br \/>\nwithout recourse, not only provides financial support to his client firm and meets a<br \/>\nportion of its working capital, but also relieves the latter of the botheration of collecting<br \/>\nthe receivables from the customers and suffering losses due to bad debts. The firm<br \/>\nmay also avoid the necessity of operating a credit department for analysis and collection.<br \/>\nIn addition to rendering financial assistance, a factor assists his client in credit planning<br \/>\nand control. On the basis of the information and assessment of creditworthiness of<br \/>\npotential customers, a factor is able to advise his client whether to extend credit to a<br \/>\nparticular buyer or not, and if it is to be extended, the amount and period therefor.<br \/>\nA factor may also generate other useful information for his clients. The factor, on<br \/>\naccount of a large volume of transactions handled by him, is in a position to computerise<br \/>\nthe operations and hence is equipped to perform book-keeping services for more<br \/>\nefficiently and expeditiously than an average business concern.<br \/>\nIt is important to note that firms that are small or have seasonal sales patterns may<br \/>\nrealise substantial savings in credit and collections because the factor serving a large<br \/>\nnumber of accounts can realise economies of scale and also can achieve better<br \/>\ndiversification with respect to default risk.<br \/>\nHowever, the most critical fall-out of factoring is institutionalisation and perpetuation of<br \/>\ncredit and perhaps even delayed payments. Further, any tough stance taken by the<br \/>\nfactor against a defaulting buyer may have its direct impact on such borrower cutting<br \/>\nshort his orders on the particular seller. In a buyer\u2019s market, few sellers can afford to<br \/>\nirritate customers.<\/p>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/accounting-banking-and-finance\">Click here for government certification in Accounting, Banking &amp; Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Factoring is becoming popular all over the world in view of the variety of services rendered by factors to business organisations. Its importance has tended to increase in recent years owing to growing industrialisation and consequential growth in the volume of industrial production and sales. A factor, by dint of the function of buying debts&#8230;<\/p>\n","protected":false},"author":625,"featured_media":32013,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[4009,4008,4007],"class_list":["post-31949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-factoring","tag-potentiality","tag-short-term-finance"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Potentiality of Factoring as a Source of Short-term Finance - Vskills Blog<\/title>\n<meta name=\"description\" content=\"Potentiality of Factoring as a Source of Short-term Finance Apply for a Vskills certification in Accounting now. Hurry up!\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/potentiality-of-factoring-as-a-source-of-short-term-finance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Potentiality of Factoring as a Source of Short-term Finance - Vskills Blog\" \/>\n<meta property=\"og:description\" content=\"Potentiality of Factoring as a Source of Short-term Finance Apply for a Vskills certification in Accounting now. 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