Accounts Receivable Factoring Terminology

By Factor Finders

Account CreditorThe business that provides

products/services to customers. (Also known as YOU)

Account DebtorThe purchaser of the Account Creditor’s

products/services. The account debtor pays off the invoice during factoring. (Also known as your customers)

Accounts PayableThe amount customers need to pay for

receiving products/services from the seller.

Accounts ReceivableThe amount not yet collected for

providing services or goods to a customer.

Advance RateThe initial amount of cash your company

receives through invoice factoring.

Aging ReportA report that shows how long accounts

receivable have remained outstanding.

Cash FlowThe flow of money in and out of your

business.

Due DiligenceA review of your company’s & your customer’s financial background. This

determines your eligibility for factoring.

Factoring BrokerBrokers match the Account Creditor to

the right factoring company for their particular business and industry.

Non-Recourse FactoringA more expensive invoice factoring

option that alleviates the Account Creditor of any liability for paying the

invoice upon the Account Debtor’s failure to pay off their debt.

Recourse FactoringA less expensive factoring option in which the Account Creditor is liable for

paying the invoice should the debtor fail to pay the factor company.

ReserveThe amount of cash from the invoice

retained by the factoring company. The reserve is released once the customer submits payment.

Spot FactoringAn invoice factoring option that allows

the Account Creditor to factor a single invoice without any long-term

commitments.

Working CapitalFunds available to cover daily business

and operating costs.

Contact Factor FindersCall us at 1-855-FACTOR-1 and visit

us online athttp://www.factorfinders.com/accounts-receivable-factoring