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Who collects the debt due, the factor or my business?

Who collects payment from the account debtor is determined by which type of  factoring agreement you have entered into. With an invoice factoring arrangement, the factor contacts the customer, issues a statement and collects funds directly into the factor’s own account. With invoice discounting, on the other hand, your business remains in control of collecting payments from customers and all associated bookkeeping tasks. With both invoice factoring and invoice discounting arrangements, it is often possible to enter into a confidential contract, which ensures that customers are not made aware that invoices have been sold to a factor, thereby allowing your business to maintain a direct relationship with your customers.

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