What steps are involved in Factoring operations?
The steps involved in factoring operations are:
1. Customer (buyer) places the order to the client (seller)
2. Client (seller) fixes the limit.
3. Client delivers the goods and instructs the customer to make payment to the factor.
4. Factor sends the invoice copy to the client.
5. Factor makes the prepayment of invoice to the client.
6. Factor follows up with the customer
7. Customer makes the payment to the factor
8. Factor after deducting its fees and other charges pays the balance amount to the client.