The entrepreneur then transmits to the factor:

Zannatykhatun

a copy of customer invoices issued with details of payment deadlines granted, as they are issued. the contact details and Siret number of the client companies concerned. Customers must be informed that the invoices have been assigned to a third party , through a mention of subrogation which must appear on the documents. Once the invoices have been transferred, the factor will: advance the amount of the selected invoices within 24 hours, less the percentage dedicated to the constitution of the guarantee fund which serves the factor to protect itself from possible unpaid debts. manage collection from customers – once payment deadlines have been exceeded. The customer pays the sum of his invoice directly to the factor, and not to the company. How is the factor paid? Factoring is of course not free for entrepreneurs... Factoring establishments are remunerated in two ways:
on assigned invoices: a factoring commission is withheld from the sums advanced by the factor TG TO DATA to the company. thanks to the interest rate on financing Generally, prices are determined according to the company's turnover volume, the risks incurred, the number of services chosen, etc. To promote access to factoring for small businesses, factors offer flat-rate offers with more affordable packs for small structures. What about unpaid debts? In the event of unpaid debts or disputes and failure of recovery procedures from the customer, the factor will use the guarantee fund that it has gradually built up on the amounts of the assigned invoices. The retention of security will allow him to be reimbursed for the debts advanced to the company. The advantages of factoring for a business Factoring provides businesses with a means of rapid financing. This process is particularly advantageous for young companies that do not have significant cash flow or an annual balance sheet on which traditional bank financing is based. Furthermore,



the factor supports the company throughout the invoicing process, which facilitates and clarifies the management of accounts receivable. Disadvantages to consider In theory, all BtoB invoicing companies have the right to access factoring. However, in reality, the criteria for selecting factors can be very strict and limiting. Some establishments even completely avoid sectors of activity considered too risky (particularly in the case of significant subcontracting). This also tends to exclude smaller companies, as a minimum invoice amount is often required by the factor. In addition, the amount of commissions and guarantee retentions significantly reduce the cash contribution on receivables. Factoring can be very expensive, for this reason, it is important to carefully analyze your needs and consult, then compare the offers from several establishments before getting started. You can also seek advice from your Chartered Accountant, who will necessarily be a source of