Factoring Survey

Should the business appear suitable, a Company representative will arrange a meeting at the prospective client’s premises to briefly explain the service and probably give an indication of cost. If both parties are agreeable, the representative will then arrange for a survey to be carried out. The purpose of the survey is to further establish the suitability of the business for Factoring. It will take the form of an analysis of the prospect’s sales ledger, purchase ledger, cashbook, and financial accounts together with the general mode of operation of the business.

The Company will look for aspects of the business which may affect their title to debts, or the ability to collect payment from the prospective client’s customers should the arrangement proceed.

A company, which might initially seem to be an ideal Factoring prospect, may for example be selling on a sale or return basis, which would disqualify it from consideration. Further areas of concern to Company would be the selling of goods to an associate business or where contra arrangements exist.

The Company will also ensure that the prospective client has good title to products being sold and that there are no retention of title clauses in the conditions of sale of its suppliers. Once the survey has been successfully completed, the Company will calculate the cost to the client of the proposed service and determine the funding structure of the deal.

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Factoring, in one form or another, has been around for thousands of years. Factoring releases the funds locked up in outstanding sales invoices, is a sure-fire way to turn your outstanding debtors into cash. Factoring is frequently used by businesses to improve cash flow. It can also be used to decrease administration expenses.
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