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In this finance tutorial, the concept of factoring is discussed along with the current business scenario. If you are a supplier offering goods or services, you are likely to provide credit to your customers. This means making sales on credit, which can lead to the challenge of collecting payments from debtors. Factoring can help in managing this by selling your accounts receivables to a third party at a discounted rate, allowing you to access immediate funds. This can help improve cash flow and reduce the risk of bad debts.
