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I have been confused with factoring recourse & non-recourse basis.
Could you please tell me that the only difference between these two is saving of debt in non-recourse because factor took the responsibility for any debt. Am I right?
Yes. With non-recourse factoring the factor suffers any irrecoverable debts and the company therefore receives the full amount.
I do explain this in my free lectures on the management of receivables.
Can you please explain to me the question Plot Co (Dec 2013) requirement 3(b). In this question, the discount is a benefit since we are receiving it, but I do have confusion regarding why there is an increase in finance cost even though there is a decrease in payables.
Can you please explain why? In the receivable part if there is an increase in receivables then there will be an increase in finance cost but since this is the payable part & I don’t know why it is like that.
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