Reducing the Cash Gap by Factoring
- Topics:
- Commercial Banking
- Tags:
- Business Operations,
- Factoring,
- Finance,
- Florida Gulf Coast University,
- JIT,
- Operational Accounting,
- Quality
- Source:
- Florida Gulf Coast University
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Overview: This paper discusses about situations where growing firms often find themselves strapped for money. A gap in cash is created when bills are paid weeks before cash comes in from customers. The cash gap can be shortened by concentrating efforts on fast moving inventory, implementing a just-in-time inventory model, negotiating extended credit terms to suppliers, and getting cash out of customers through discount programs and credit card transactions. Only after exhausting these alternatives does factoring typically make sense. Factoring provides quick access to cash through sales of receivables.
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Format: PDF | Size: 38KB | Date: Nov 2000 | Pages: 11
