Definition:
Type of financial service whereby factoring company buys or gets the title to accounts receivable of firms, enterprises due to them from buyers for supplied goods or services. It is accompanied with financing clients and making additional services for them. From the economical and legal point of view (Ottawa definition 1988) the factoring company does at least two from four activities: - Financing accounts receivable, - Conducting reports and accounts of debtors, - Execution of dues, - Take the risk of buyer's solvency.

Source:

• UNIDROIT Convention on International Factoring
  Place of publication: Inter. Inst. UNIDROIT - Ottawa