Factoring is a financial arrangement where the supplier sells accounts receivable to the factor against a premium and receives cash for immediate working capital needs. Reverse factoring takes ...advantage of the retailer’s payment guarantee and the credit rating differential between a small supplier and a large retailer, enabling the supplier to receive financing at a more favorable rate. We develop a supply chain theory of (recourse/non-recourse) factoring and reverse factoring showing when these post-shipment financing schemes should be adopted and who really benefits from the adoption. We find that recourse factoring is preferred when the supplier’s credit rating is relatively high, whereas non-recourse factoring is preferred within certain medium range of ratings. Both factoring schemes, if adopted, benefit both the supplier and the retailer, and thus the overall supply chain. Further, we find that reverse factoring may not always be preferred by suppliers compared to recourse and non-recourse factorings. Retailers should only offer reverse factoring to suppliers with low (but above a threshold) to medium credit ratings. The optimally designed reverse factoring program can always increase the retailer’s profit, but it may leave the supplier indifferent to the current factoring option when followed by an aggressive payment extension. More importantly, contrary to conventional wisdom, our theory implies that reverse factoring could be adopted even when the retailer has no credit rating advantage over the supplier, and it could benefit the retailer even without extending payment terms.
This paper was accepted by Victor Martínez-de-Albéniz, operations management.
In the context of globalization, the transactions between business partners become more and more diverse and require special attention from commercial banks and factoring companies, both with regard ...to settlement, in order to avoid possible financial blockings, and with regard to the security and protection of the interests of parties, by using funding techniques, specific products and services. Factoring provides companies the possibility of funding based on trading receivables received from third parties. The aim of the article is to shed light on the accounting and tax approach of this funding technique that, although it has lots of advantages, is too little known and employed in the Romanian business environment.
The article is aimed at exploring the prospects for development of factoring services in the national financial services market, taking into account the specific conditions of the Ukrainian economy ...and the formation of measures for the successful development of factoring service. Factoring is a universal method of refinancing the receivables of the enterprise-supplier. In researching the essence of factoring, it was noted that this financial service has something in common with a bank credit. In the course of a comparative analysis of factoring and bank crediting it was identified that the main advantages of factoring were the lack of collateral and an additional list of services that ensured that the supplier achieves competitive benefits, and a financial institution or a specialized factoring company – an increase in the customer base by acquiring from enterprises-suppliers (sellers) the right to claim the receivables of buyers. An analysis of the factoring services market showed an increase in the popularity of factoring services, which is due to the increase in the contracts of factoring by financial and factoring companies for five years (2014–2018). However, there are still problems that constrain the demand for factoring service from domestic suppliers and slow down the development of factoring companies per se. To overcome these problems, the most important directions are the development of legislation acts that will take into account all the legal aspects of the participants in factoring operation, and the formation of an innovative list of services by factoring companies, which will improve the process of management of the enterprises’ receivables.
With quantum computers of significant size now on the horizon, we should understand how to best exploit their initially limited abilities. To this end, we aim to identify a practical problem that is ...beyond the reach of current classical computers, but that requires the fewest resources for a quantum computer. We consider quantum simulation of spin systems, which could be applied to understand condensed matter phenomena. We synthesize explicit circuits for three leading quantum simulation algorithms, using diverse techniques to tighten error bounds and optimize circuit implementations. Quantum signal processing appears to be preferred among algorithms with rigorous performance guarantees, whereas higher-order product formulas prevail if empirical error estimates suffice. Our circuits are orders of magnitude smaller than those for the simplest classically infeasible instances of factoring and quantum chemistry, bringing practical quantum computation closer to reality.
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Factoring is essentially a hybrid commercial operation that covers the elements of several legal mechanisms, the most common elements being borrowed from the debt assignment mechanism. However, the ...legislator did not consider it necessary to establish this legal operation in the contracts covered by the new Civil Code. Moreover, factoring does not currently benefit from any express regulation in Romanian law. Although, in the Romanian doctrine, we find references to a possible direct action of the factor against the assigned debtor, the situation of this action is uncertain. In this sense, we considered it opportune, but also necessary to formulate a brief analysis of what the factoring operation means in general, as well as to establish whether or not the factor's action covers the elements of a direct action. In the Romanian doctrine and legislation we find only fragments of texts regarding the factoring operation, therefore, an exhaustive analysis regarding the application of factoring and even more so of the factor's action cannot be performed. However, we hope that the brief explanations we will bring will lead to an outline, at least general, of the factor's action against the assigned debtor.
Abstract
In this paper, design of high speed and area efficient finite field multiplier using factoring technique for communication is implemented. Data security plays very important role in present ...generation. Therefore, initially inputs and key are given to S-Box. The main intent of S-Box is to substitute the input data and key. After that input data and key are merged using S-Box merge. This data will be multiplied using finite field multiplier and to improve the performance along with that mix column technique is applied. Factoring technique will increase the speed of operation. After the data performs shift row operation. At last rounding is performed to the obtained data. At last simulation results shows that effective outcome in terms of delay, memory and security.
Factoring fulfills an important function globally in financing and accessing credit for businesses, companies and entrepreneurs of all sizes, especially small and medium-sized businesses. The ...UNIDROIT Factoring Model Law was prepared within a three-year period as a result of the work initiated by UNIDROIT upon the recommendation of the World Bank due to reasons such as the inadequacy of the existing international legislation for countries to create a functional factoring legislation and the need to create global rules and legislation specific to factoring. The UNIDROIT Factoring Model Law for which the Guide to Enactment has not yet been prepared, contains some challenging rules. During the preparation of the UNIDROIT Factoring Model Law, other relevant legal regulations were also used and compliance with them was observed. In this study, the UNIDROIT Factoring Model Law, which is a very new legislation, has been criticized under basic section headings and its weaknesses and strengths have been examined. While doing this, an answer is sought to the question of whether the UNIDROIT Factoring Model Law could meet the expectations. Additionally, its possible effects are discussed. It has been concluded that the UNIDROIT Factoring Model Law contains provisions that may cause problems and confusion in practice especially under the headings of the scope of receivables subject to transfer, notification and registration system, priority rights, but in general it should be welcomed as an exemplary law. It is too early to answer the question of whether the UNIDROIT Factoring Model Law will be successful internationally, that is, to what extent it will be adopted by countries. The Guide to Enactment to be prepared in this process will also be effective.
This study investigates the efficacy of zero‐interest early payment financing (alternatively referred to as early payment) and positive‐interest in‐house factoring financing in a pull supply chain ...with a capital‐constrained manufacturer selling a product through a capital‐abundant retailer. Early payment is the prepayment of a wholesale cost to the manufacturer, whereas in‐house factoring is a loan service provided to the manufacturer by a branch financing firm of the same retailer. We find that the retailer prefers early payment financing to bank financing when the manufacturer’s production cost is low. If the retailer instead offers positive‐interest in‐house factoring financing to the manufacturer, then the financing equilibrium domain enlarges as compared to bank financing. Interestingly, early payment financing can outplay positive‐interest in‐house factoring financing if the production cost is considerably low; otherwise, vice versa. When the production cost is big enough, the retailer will not provide either early payment or in‐house factoring. Furthermore, our main qualitative result sustains with an identical wholesale price across all three financing schemes and the financing equilibrium domain of early payment shrinks as demand variability grows.
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Factoring has been a popular method of financing of companies in India. Since its inception, factoring business has made a significant progress in India. The total factoring volume has increased in ...the past nine years. Yet it is found that in its present improved format, factoring is still not the preferred solution for most of the Indian Companies. But around the world, factoring is a popular option to access working capital in the case of small or even large businesses, among eleven companies, which are providing the factoring business in India, only State Bank of India Global Factors Limited (SBIGFL) is providing domestic as well as International Factoring services under one roof. S BIGFL is a member of Factors Chain International (FCI), an Umbrella Organization of worldwide factoring companies. The aim of this study is to know the concept of factoring and the products, services, role of the SBIGFL in the factoring business in India._
PurposeAs a popular supply chain finance (SCF) strategy, reverse factoring has been widely adopted by buyer firms. However, the extant literature provides scant empirical evidence on the performance ...effect of reverse factoring. The purpose of this study is to seek to narrow this gap by empirically examining the relationship between reverse factoring and operating performance and the contingency conditions of this relationship.Design/methodology/approachBased on a sample of 167 announcements of reverse factoring implementation made by publicly listed Chinese manufacturing firms between 2014 and 2018, this paper employs a long-term event study approach to analyze the operating performance effect of reverse factoring as well as the moderating effects of production and innovation capabilities.FindingsThe event study results indicate that reverse factoring has a positive effect on buyer firms' operating performance in terms of cost efficiency and operating margin. In addition, both production and innovation capabilities positively moderate the relationship between reverse factoring and operating margin. However, neither of them moderates the relationship between reverse factoring and cost efficiency.Originality/valueThis is the first study that empirically examines the impact of reverse factoring on operating performance based on secondary data. Furthermore, it sheds light on the SCF literature by providing insights into the contingency effects of production and innovation capabilities, which also extends our understanding of the application of extended resource-based view in SCF research.