Factoring and forfaiting are both forms of invoice financing for businesses. Factoring involves the purchase of accounts receivable by a factoring company, which then takes on the responsibility of collecting payments from customers. It is usually used for domestic and export receivables with credit periods under 180 days. Forfaiting specifically refers to the forfeiting of rights to future export receivables in exchange for an upfront discounted payment. It is used for longer term export receivables over 180 days and provides financing without recourse for the exporter. The key differences between the two are the parties involved, eligible receivables and credit periods, and level of services provided.