Domestic and International Factoring
In the domestic factoring, all the three parties involved Hyundai Motors (Buyer), ABCD Technologies (Seller) and the Factor (Financial Intermediary) are present in the same country.
In International Factoring, Buyer and Seller are from different countries. Unlike Domestic Factoring, there are usually four parties involved in an international factoring.
They are: (1) Exporter (Seller), (2) Importer (Buyer), (3) Export factor and (4) Import factor.
Some Sellers may like having credit control services because it frees up their time and late payments are less likely. Others may prefer to just opt for invoice discounting.
To be honest, there is no right or wrong choice here – it doesn’t really matter what financing option you end up choosing, what matters is whether or not the plan which you chose compliments your financial requirements. So, remember to choose wisely.
That being said, once you figure out a way on how to resolve the issue of your unpaid invoices that make up the bread and butter of your business you’d be on the right track towards maintaining a positive cash flow making your business the land of milk and honey.