domestic companies involved in the sale of goods are often faced with the problem of when the sale of its products only on a prepaid, you can scare away most buyers, and the application of a delay of payment the seller loses a substantial amount of funds in circulation, which are necessary to implement the financing of economic activity.These problems can solve such a thing as factoring.What is the procedure and how it can be successfully used in the operation of a business entity?
in accordance with applicable law, this concept means the funding under the concession rights to the cash requirement.The factoring agreement is often referred to as credit sales.Today, this procedure is carried out mainly banks due to the existence of such rights in accordance with a special law.
However, any credit or a commercial organization may carry out factoring.What is factoring?This activity, which must be confirmed by the appropriate license.But today is not yet adopted no regulations that would regulate such licensing.
calculation factoring usually performed as follows.The enterprise is a contract for the provision of a financial agent, which is designated herein as a factor.Under this contract the seller when selling goods not received directly from the buyer to pay for it, and gives it the right to request payment from the buyer given to the financial agent.Interestingly, the supplier shall not be liable for the payment of money by the buyer agent.The seller must notify the buyer in advance that their interaction is used factoring, that such an event involves the interaction of a second person with the bank.
So, supplier documents are presented banking institutions that should confirm the actual delivery of goods or services on condition of payment by installments.And on this day the seller receives about 70% of the contract value.The amount of interest depends on the category of reliability, for which the buyer will be assigned by the bank.The higher it is, the greater the amount the supplier will receive.
When payment, the buyer is obliged to transfer money directly to the bank.Failure to pay on time starts to operate a mechanism such as factoring.What is the impact of the bank means by itself, consider on.The Bank carries out a number of actions aimed at collecting funds from the debtor.Upon successful repayment bank pays the supplier the remainder of the contract price less commission (about 3%), collected as a fee for such services.
Summing up, it should be noted that the supply company using factoring an opportunity to realize their goods with a delay (which is essential for the buyer).However, the seller does not withdraw from circulation a considerable part of the funds.
