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Schedule of Accounts

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Factoring Schedule of Accounts

Understanding the factoring schedule of accounts is crucial for businesses that rely on invoice factoring as a financing solution. The factoring company provides a standard schedule of accounts form for its clients to complete when submitting a batch of invoices (accounts receivables) for factoring. Not only is the schedule used for administrative purposes, but it also serves as a legal document for selling and buying invoices.

Understanding Invoice Factoring

Invoice factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third party (the factor) at a discount. This process allows businesses to receive immediate cash, which can be used to cover operational costs, instead of waiting for customers to pay their invoices.

Invoice factoring is a popular financing solution for small and medium-sized enterprises (SMEs), particularly those that have long payment cycles or deal with customers who take a considerable amount of time to pay their invoices. By factoring their invoices, these businesses can maintain a steady cash flow, which is crucial for their day-to-day operations and growth.

Details of a Schedule of Accounts

A schedule of accounts is a detailed document that contains information about a batch of invoices that a business has submitted for factoring. A typical schedule includes the following information about each invoice:

  • the invoice number
  • the date it was issued
  • the customer’s name
  • the invoice amount
  • the credit terms
  • and the due date

This information helps both the factoring company and the business keep track of their factored invoices.

The Bottom Line

The schedule of accounts aids in tracking factored invoices, but it also serves as a legal document for the selling and buying of invoices.

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