ABSTRACT
This chapter discusses on a range of financial products collectively called factoring and invoice discounting available to help firms manage cash-flow. Factoring and invoice discounting are often treated as the same product or confused with one another. Factoring is a financial product that allows successful firms with invoiced orders to gain access to these sales revenues before the date for payment agreed with the customer. Invoice discounting is a debt product where a user obtains a loan based on the value of the money due to be paid in the future by its customers. All firms using factoring and invoice discounting must be trading successfully to the degree of obtaining a steady stream of invoiced orders to either factor or discount. The high street banks all have factoring and invoice discounting services. Digital market operators such as Market Invoice in the United Kingdom (UK) offer a peer-to-peer version of factoring and invoice discounting.
