Selling receivables is called factoring.
Factoring is described as a financing methodology through which the owner of a business can increase its cash flow. In this process, the accounts are to be received are sold at a discount to another party so that funding can be raised.
It is an old technique and can be used effectively for the management of cash.
Receivables are the money, unpaid invoices, and credit that a company will receive from its customers. Furthermore, payments from credit cards are also considered receivables because money will move from the customer to the business, All these can be used by a company to provide a third party at a discounted rate to raise cash flow or capital.
It can be concluded that selling receivables are called factoring.
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