Factoring is selling your invoices to a third party which pays a certain percentage of the original invoice amount. You ”lose” some money but you get your money fast and simple which makes credit risks a thing of the past not mentioning administrations costs. This way you also can also increase your bank account’s liquidity.
Not having to hunt down payments for your due invoices is one of many contributing reasons that makes factoring so popular.
Combining factoring with debt collection and invoice services are also a smart way to spread the workload.