The management of receivables – Change of policy – ACCA Financial Management (FM)
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So I got $18,000 savings by utilizing the factoring fee (($10,000,000-$200,000)*1/12) which is an immaterial difference of $3K but, is this an acceptable Margin of Error an examiner would consider?
Realistically as well if we are looking at it from the viewpoint of it being a receivable balance, you are technically from the factor obtaining the 100% of the balance which you are, after or before, charged a service fee for (expense wise) so maybe netting the fee from the receivables is not the right approach?
Would love your insight on this John
Sir John – my apologies.
Because the question says that the overdraft rate is 15%
Thank you sir. Can you explain why we are applying 15% interest on difference in receivables