Factoring:

The factoring is a process of discounting trade bills with recourse. It is a service beyond giving simple finance against the bills. It entails a host of services. It is a financial arrangement in which the receivables are created out of sale of goods or services are sold to an agency (Know as factor) is called factoring. The factor performs the functions such as purchase of receivables, maintaining the sales of receivable ledgers, submitting sale accounts to the creditors, collection of debts on the due date and providing consultancy services to the customer in respect of marketing, finance and production.