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advance factoring and maturity factoringin both recourse and non-recourse factoring whether the factor advances cash against book debts to the client
full service recourse factoring in this kind of factoring the client has to bear the risk of default made through the debtors there the factor had
full service non recourse in this method the book debts are purchased through the factor assuming 100 percent credit risk in case of default through
types of factoringthe factoring facilities can be largely categorized in four groups that are as follows1 full service non-recourse old
factoring services all subsequent services are offer through the factor apart from the core service of purchasing receivables1 sales
receivable management is a specialized activity and needs various time and effort on the part of the firm collection of receivables frequently poses
ageing schedule as is classifies outstanding accounts receivable at a specified point of time into various age brackets a clarifying ageing schedule
a firm requires continuously monitoring and controlling its receivables to make sure that the dues are paid on the due date and no dues stay
exact management of receivables acquires a suitable collection policy that outlines the collection procedures collection policy consider as the
credit limita credit restriction is the maximum amount of credit that the firm will extend at a point of time this indicates the extent of risk taken
analysis of financial ratios ratios are computed to find out the customers liquidity position and capability to repay debts the computed ratios must
analysis of credit file credit file is a compilation of each the relevant credit information of the customer all the credit information collected
once the credit information is accumulated the subsequent step is to analyze the gathered information and isolate those matters that may need further
so as to makes sure that the receivables are collected in occupied and on due date by the customers prior information of their credit worthiness must
one of the significant elements of credit management is the assessment of the credit risk of the customer as assessing risk two kind of errors
ms abc is seeing relaxing its collection efforts at current its sales are as rs40 lakhs the acp is here 20 days and variable cost to sales ratio is 8
the collection policy of a firm is intend at timely collection of overdue amount and comprises of the subsequenta monitoring the
ms abcs present credit terms are 110 net 30 that they are planning to change to 210 net 30 the current average collection period is 20 days and
cash discount is given to buyers to bring them to make prompt payment the credit terms identify the percentage discount and the period throughout
ms abc has an existing sales of rs50 lakhs and permits a credit period of 30 days to its customers the firm cost of capital is 10 and the ratio
it refers to the length of time given to the buyer to pay for their purchases throughout this period no interest is charged on the excellent amount
the current sales of ms abc are rs100 lakhs through relaxing the credit standards the firm can produce additional sales of rs15 lakhs on that bad
this variable deals along with the granting of credit on one great all the customers are granted credit and conversely none of them are granted
each company must establish its own credit policy based on the ground condition and the environment wherein it is operating the major goal of the
in the documentary bills the seller faces a lot of risk as the risk of non-acceptance or non-payment of goods this poses a main risk for the seller