One advantage of factoring accounts receivable is the ability it gives a firm to turn accounts receivable immediately into cash without having to worry about repayment.

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Factoring accounts receivable allows a firm to sell its accounts receivable to a third-party (factor) at a discount in exchange for immediate cash, thus removing the risk of non-payment from their hands. This allows the firm to improve its cash flow and focus on its core business activities.

One Advantage of Factoring Accounts Receivable Is the Ability It