The phenomenon of companies selling their receivables has been very common in the corporate world in recent days. With reference to the intensive nature of business activities in the global scene, selling of receivables has been on the rise. The whole process entails the selling of a company’s accounts receivables at a discount for cash. Companies adopt this strategy so as to avoid the management or collection of Accounts Receivable balances by rather adopting a factoring company. The key factors inducing companies to adopt the sell of receivables include bad credit, lack of security and quick approval and delivery of funds. The strategy has been identified to have significant benefits to the company as a source of cash but also yield various limitations to the company. Finance Accounting.
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