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Factoring
FACTORING: UNLOCK THE FUNDS TIED UP IN RECEIVABLES!
Factoring of accounts receivables is an arrangement where finance is provided against the credit invoices for supply of goods or services. This helps the supplier receive a significant portion of the invoice amount soon after the delivery of goods or services.
Besides financing, factoring services include:
Sales Ledger Maintenance
Collection of receivables
Reporting
For whom Factoring is applicable?
If any seller supplies significant amount of goods/services to business entities on credit, factoring is suitable for him.
How It Works
Only seven easy steps…
Buyer (Customer) places order on seller (Client of IIDFC).
Client approaches IIDFC for approval of Factoring facility.
IIDFC approves the facility.
Seller (Client of IIDFC) delivers goods/services to Customer.
Seller (Client of IIDFC) submits assigned invoices to IIDFC.
IIDFC disburses prepayments to Seller (Client of IIDFC).
Customer makes payment against invoices directly to IIDFC after a certain time.
IIDFC reimburses the balance amount to Seller (Client of IIDFC) after recovering prepayment, discount and factoring charges.
Costs
Only costs of Seller (Client of IIDFC) are:
Discount: We charge competitive discount for prepayment against invoices.
Collection Fee: A nominal collection fee is obtained for collecting receivables from customers.
Benefits
Reduced Investment in Receivable: Seller (Client of IIDFC) will receive payment right after delivery and therefore funds are no longer tied up in receivables.
Expansion of Business: As cash flows improve, Seller (Client of IIDFC) can increase business by delivering higher volume to existing customers and also expand business with new ones.
Sales ledger Administration: IIDFC will administer sales ledger of Seller (Client of IIDFC) for the assigned customers.
Collection of Receivables: IIDFC will monitor and collect the receivables on due time from customers.
High Quality Reports: IIDFC will provide detailed report on the performance of customers that will help Seller (Client of IIDFC) direct his sales efforts.
Scope For Additional Financing: When Seller (Client of IIDFC) utilize factoring facility properly, it will support him with other services.
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