Factoring is a complex tool for better management of accounts receivable. Once treated as an alternative to credit, today’s factoring is increasingly a solution for companies seeking a way to ensure financing, take over the responsibility for the debtor’s ability to pay, manage the book-keeping of accounts receivable and debt collection.
A factoring company has to provide part or all of the following functions:
- Financing of accounts payable, receivable or combination of both;
- Taking a risk cover of insolvency by debtors /creditors (impractical in Albania);
- Collection of receivables;
- Supplier’s accounts and accounts receivable management.