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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Factoring
What does invoice discounting means sir?
Thank you 🙂
Have you watched the free lecture on receivables, because I explain invoice discounting in it!!!!
What it is, is that if the business is short of cash and a customer is owing an amount of money. Then instead of having to wait until the customer pays, you can ‘sell’ the invoice to a bank and they will give you the money immediately. Because they are giving you the money immediately (and then they have to wait for the cash) they will give you a bit less (they will have a discount).