8. What are the effects of resorting to Factoring on company management ?

Factoring produces a number of effects on a company's activity, affecting the areas involved in trade credit management:

Accounting
Factoring simplifies customer accounting, replacing fixed costs with variable costs and lightening items in the balance sheet regarding working capital

Sales policy
Factoring can increase a company's sales by unfreezing credits which are not yet due and freeing up financial resources for promoting sales

Financial policy
Factoring increases the speed at which working capital circulates by shortening the monetary cycle (from payment for materials purchases to collection of payment for sales of finished products) and reducing the company's need for financing

Organisation
Factoring takes care of customer relations so that the company can focus on production and sales


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