admin

03.07.2022 - 17:28

What are some of the benefits and drawbacks of factoring?

Question:

What are some of the benefits and drawbacks of factoring?

Answers (1)

ORosie April 13, 2023 в 10:41

Factoring is a financing method that involves selling accounts receivable to a third party at a discount in order to obtain immediate cash. Some benefits of factoring include improved cash flow, increased working capital, and reduced risk of bad debts. However, there are also some drawbacks to factoring, such as loss of control over the collection process, high fees and interest rates, and potential damage to the company's reputation if the factor is not reputable. Ultimately, whether factoring is beneficial or not depends on the individual company's financial situation and goals.

Do you know the answer?

Leave a comment Cancel Response

Not sure about the answer?

Find the right answer to the question What are some of the benefits and drawbacks of factoring? by subject Accounting, and if there is no answer or no one has given the right answer, then use the search and try to find the answer among similar questions.

Search for other answers

New questions in the category: Accounting

List the basic steps in the recording process.

Briefly distinguish between financial and managerial accounting as they relate to (i) the primary users, (ii) the type and frequency of reports, (iii) the purpose of reports, and (iv) the content of reports.

Is the work sheet a part of the formal accounting records?

A company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $135,000 o

Managerial accounting reports are special-purpose and issued as frequently as needed. True or false?

What items appear in financial statements of merchandising companies, but not in the statements of service companies?

Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Information from LLL’s standard cost card follows: During August, LLL had the follow

What are the main three financial statements? How do you link them together to reflect the financial position and performance of a company?

The costs incurred by International Rental Cars in the recent fiscal period are shown below. Calculate the total cost of the following: customer-sustaining activities. Custodial services for branch office in St. Louis$250 Painting costs for lux

Gibson Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. T

Describe at least 4 reasons a company would use a performance evaluation system?

Define the basic elements of financial statements.

Classify the following accounts either as an “asset”, “liability” or “equity”: – Owner’s capital – Unearned revenue – Buildings – Medical Equipment – Cash – Medical Supplies – Accounts Payable – Owner’s withdrawals – Prepaid Accounts – Accounts receivable

The Lee Company uses a job-order costing system. The following data were for June : Job Number 235 , june 1 work in process inventory : $2,500 direct materials : $600 direct labor : $400 236, june 1 w

Suppose a firm makes purchases of $3.1 million per year under terms of 2/10, net 30, and takes discounts. Assume 365 days in a year for your calculations. Do not round intermediate calculations. a. What is the average amount of accounts payable net of di

Prepare a product by value analysis for the following products and given the position in its life cycle, identify the issues likely to confront the operations manager, and his or her possible actions.

Rizio Co. purchases a machine for $12,500, terms 2/10, n/60, FOB shipping point. The seller prepaid the $360 freight charges, adding the amount to the invoice and bringing its total to $12,860. The machine requires special steel mounting and power connect

Good to Go Auto Products distributes automobile parts to service stations and repair shops. The adjusted trial balance data that follows is from the firm’s worksheet for the year ended December 31, 20

On January 1, 2011, Rapid River Realty sold a tract of land to three doctors as an investment. The land, purchased 10 years ago, was carried on Rapid River’s books at a value of $210,000. Rapid River received a non-interest-bearing note for $275,000 from

The following table shows financial data year 2012 for Dirt Cheap Wholesale and Kwiki Mart, two retailers. Assume that both companies have an average annual holding cost rate of 20% costs both retaile

Authorization

Password generation