This straightforward introduction to the terminology used in accounts receivable factoring will help you navigate the factoring process like a pro. Terms cover the factoring process, types of invoice factoring, and the role your business plays in the factoring relationship.
By Factor Finders
The business that provides
products/services to customers. (Also
known as YOU)
The purchaser of the Account Creditor’s
products/services. The account debtor
pays off the invoice during factoring.
(Also known as your customers)
The amount customers need to pay for
receiving products/services from the
The amount not yet collected for
providing services or goods to a
The initial amount of cash your company
receives through invoice factoring.
A report that shows how long accounts
receivable have remained outstanding.
The flow of money in and out of your
A review of your company’s & your
customer’s financial background. This
determines your eligibility for factoring.
Brokers match the Account Creditor to
the right factoring company for their
particular business and industry.
A more expensive invoice factoring
option that alleviates the Account
Creditor of any liability for paying the
invoice upon the Account Debtor’s
failure to pay off their debt.
A less expensive factoring option in
which the Account Creditor is liable for
paying the invoice should the debtor fail
to pay the factor company.
The amount of cash from the invoice
retained by the factoring company. The
reserve is released once the customer
An invoice factoring option that allows
the Account Creditor to factor a single
invoice without any long-term
Funds available to cover daily business
and operating costs.
Contact Factor Finders
Call us at 1-855-FACTOR-1 and visit
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