factoring receivables

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  • Profile photo of Vipin

    i have memorized like as follows:
    if customer paying pattern changes after given to factor,
    suppose receivable day reduced to 30days from 45 days.
    cost side we calculate
    sales*30/365*extra interest
    and on benefit side,
    redn in receivables *overdraft interest.

    where the customer paying pattern didnt change
    cost side
    sales*45/365*factor interest
    and on benefit side
    we dont have redn in receivables..

    i just want to confirm that ,

    Profile photo of John Moffat
    John Moffat

    Yes – that’s fine :-)

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