What is factoring? Infographic

What is factoring? Infographic

Factoring improves a supplier’s cash flow. This is how …

Traditional supplier/buyer interaction 

  • A supplier makes a shipment or delivery and sends an invoice to the buyer.
  • The buyer has the option to pay for the goods by the due date on the invoice or, in many cases, to pay the invoice earlier at a discount.

Enter: Factoring

Factoring improves a supplier’s cash flow. This is how …

  • The supplier makes the delivery and then sells its invoice(s) or accounts receivable (AR) to a third party, often a bank or financial institution, known as a factor.
  • The supplier receives a discounted portion of cash in advance of actual payment of the goods from the buyer.
  • The factor receives a fee, often retaining a discounted portion of the gross invoice once it is paid.
  • The fee to the factor covers its cost of processing invoices and collecting payments, as well as its lending cost of funds.

Source: https://www.freightwaves.com/news/what-is-factoring (Todd Maiden)

Related Posts

FreightWaves Forecasts of Benchmark Spot-Rates: Infographic

Infographic: Freight Commodity Statistics

Infographic: Freight Commodity Statistics

How big is the logistics industry Infographic

How big is the logistics industry? Infographic



What's the SONAR ROI?

By increasing the number of loaded miles per day your drivers drive by 1% and your rate per mile by $0.03 you will make more per week #WithSONAR.

#WithSONAR you can save up to per week through better bid negotiations and more effective management of your routing guide.

#WithSonar you can add 1 more load per person each day and increase $5 margin per load, earning your company an extra per week.

Disclaimer: Every company’s circumstances are unique. Fixed and variable expenses, market conditions and operational factors vary. Unforeseen events may also affect results. Calculated potential results reflect the consensus expectation of FreightWaves’ experts. Actual results may vary.

Read Recent Posts

November 28, 2023

SONAR introduces improved market-level pricing methodology

November 13, 2023

Flatbed spot rate APIs now available

October 25, 2023

Is the Juice Worth the Squeeze? Assessing FreightWaves SONAR vs. the Competition

White Papers
November 1, 2023

Index-Linked Contracts: A New Solution for Shippers’ Dissatisfaction with RFPs

August 3, 2023

Catering to the winners – SONAR subscribers beat the market

July 20, 2023

Navigating the Yellow Corp. Crisis: Implications and Strategies for LTL Shippers