9. Factoring
Credit Sales
Send
Invoice
M
ake rem
aining
20%
less com
m
ission
M
akespayment
M
akes80%
paym
ent
Purchase orderSend Invoice
goods of Rs 1000 are requested
by buyer
Factor notify invoice of Rs1000 Rs 1000 goods are credit sold
with invoice of Rs 1000to buyer
Factor makes 80% i.e. Rs.800
Payment to seller
Finally customer pay Rs1000 to
Factor on end of credit period
Transaction Completed
Factor makes 20% Rs 200 but
less commission i.e. Rs.180
Payment to seller
17. EXPORTER IMPORTER
EXPORT FACTOR IMPORT
FACTOR
Place purchase orderRequest limit approval of
importer
Same request is forwarded
to import factor
Conveys approval of importer
to export factor and factoring process began
Deliver good
Exporter send document for factoring
and receive 80% payment
Document is further send to import factor
and finally to customer
Importer pay amount
on due date to import factor
Import factor transfer the amount to export
factor And export factor transfer remaining
amount to exporter less commission