![Accounts Receivable Financing](https://img-cdn.financeunlocked.com/headers-images/euromoney/3.jpg?ik-sdk-version=javascript-1.0.3)
Glossary
Technical Foundations
Accounts Receivable Financing
Accounts Receivable Financing a.k.a. factoring or invoice discounting in many countries is a mode of financing in which companies sell their unpaid invoices (accounts receivable) to third party financial institutions at a discount in return for cash. The discount factor is in effect the financing cost for companies that want to recognise cash nowtoday against future receivables.