Factoring as a method of financing an enterprise. Factoring as a source of financing for the enterprise. About accounts receivable

Factoring, like many other financial instruments, came to Russia from the West. This English word factoring comes from factor (factor) - commission agent, agent, intermediary, and means the redemption of the receivables of the Supplier of goods (services) with the assumption of obligations to collect them and the risk of non-payment. The supplier sells receivables (accounts receivable), that is, the amounts that buyers owe to the firm, a specialized financial institution-factoring company, which in turn is called the Factor. The difference between the Factor and other agents, for example, from the assignee, is that he takes possession of the debt, that is, the Supplier loses ownership of the receivables.

The economic side of factoring is manifested in the fact that it allows you to increase the liquidity of the company's assets, as well as the turnover of capital and thus the profitability of entrepreneurs. The greatest relevance, according to Western experts, is for small and medium-sized enterprises. The use of factoring in many cases allows enterprises to reduce the cost of maintaining special financial services, increasing the efficiency of financial services by transferring these functions to specialized companies, where such activities are usually more efficient due to a high degree of rationalization.

If we evaluate factoring in terms of the opportunities it opens up, then in the present conditions factoring in a broad sense is considered to be an important tool for modern management, especially in relation to financing and enterprise management, as well as risk management.

In countries with a developed market economy and financial infrastructure, factoring companies or commercial banks engaged in this activity offer their clients a fairly diverse range of financial services, conditional on the transfer of their monetary claims by the latter.

Today, factoring is predominantly defined as a legal relationship between a financial agent (factor) and an enterprise selling goods or services (the “customer”), according to which the factor buys the customer’s receivables (with or without the right to reclaim the customer) and in connection with with this debt controls the loans provided, and also carries out accounting of the client's trading operations. Thus, factoring has the following main functions:

1) conducting relevant accounting operations;

2) control over the provided commercial credit, including the receipt of payments;

3) protection against credit risks (in the case of factoring "without turnover");

4) financing of the client's current activities.

1. Types of factoring

Factoring is a type of trade and commission operation, which includes collection of receivables, working capital lending, guarantees of credit and currency risks, as well as information, insurance, accounting, consulting and legal support of the Supplier.

Depending on the availability of the Supplier's financing function, factoring services are divided into:

· Factoring with payment (with service factoring), which includes the collection of debt, the assumption of the risk of non-payment and the transfer of funds as they are paid by the Buyer. In Russian practice, this is called the administrative management of receivables. In this case, the Factor's commission is about 0.5-1% of the amount of the assigned receivables. The amount of the commission varies from the total debt of the Supplier, decreasing with its growth;

· Factoring with payment and financing (with service plus finance factoring) includes payment to the Supplier immediately after the delivery of goods up to 90% of their sale price, in the presence of invoices accepted by the Buyer. The balance is paid after the debt is repaid. In this case, the Factor sets the risk reward for advance payments (0.5-1.2% of the debt amount) depending on the total number of debtors transferred to factoring services. With an increase in the number of debtors, the risks of the Factor are eroded and the commission is reduced. The Supplier also pays the Factor a fee for the use of monetary resources, which is several points higher than the credit rate. The amount of this fee depends on the turnover period of the Supplier's receivables. In Russia, Factor usually requires the submission of original documents for the delivery (invoice and consignment note), charging a small commission (about 50-70 rubles per invoice) for registering these documents. In Western practice, such a component of the commission also exists, but often the Supplier sends an electronic file to the factoring company containing a sales book for a certain period, the original documents for deliveries are provided later.

There are usually three parties involved in internal factoring transactions: the Supplier, the Buyer and the Factor. In this case, the factoring scheme looks quite simple:

Delivery of goods on terms of deferred payment.

2. Assignment of the right to claim the debt for delivery to the Bank.

3. Payment of early payment (up to 8 0% from the amount of the delivered goods) immediately after delivery.

4. Payment for delivered goods.

5. Payment of the balance of funds (from 10% , after payment by the buyer) minus the commission.

2.Analysis of the solvency of the buyer

When purchasing invoices, the factoring company analyzes the solvency and good faith of the Buyer, because the risks of the Factor associated with non-payment of invoices relate specifically to the Buyer, and not to the Supplier. Of course, the Factor checks the Supplier as well, as there is a risk of providing them with forged documents on deliveries, which may entail financial losses for the Factor. In order to avoid the appearance of “bad debts”, the Factor may refuse to purchase some accounts or debts of individual Buyers, or offer an agreement to purchase receivables with the right of recourse, that is, a claim back against the Supplier. This agreement specifies the term of the recourse, to which debts it applies, in what period and how its execution takes place. In Russia, recourse usually occurs 30 days after the expiration of the deferred payment, but the Supplier has the opportunity, with the consent of the Factor, to extend the deferred payment if the Buyer has objective difficulties. The presence of a regression does not reduce the risks of the Factor to zero, but only reduces them. When factoring with recourse, the Factor does not take credit risk, that is, the risk of the Buyer's non-payment in general, but takes the liquid risk-the risk of non-payment on time, which happens much more often. Russian buyers do not have a clear payment discipline. Buyer's payment 3-5 days after the expiration of the grace period is common practice.

It should be noted that the fact that the Factor has the right of recourse against the Supplier somewhat reduces the cost of factoring services for it (by approximately 15-20%), therefore it makes sense for the Supplier to assign with the right of recourse the receivables of reliable Buyers with a good and long credit history, reducing thus their costs for factoring services.

3.Closed and open factoring

Factoring can be both open (disclosed factoring) and closed (undisclosed factoring). With open factoring, the debtor is notified that a factor is involved in the transaction and makes payments to his account, thereby fulfilling his obligations to the Supplier. In the case of closed factoring, the seller does not want to disclose the reasons that forced him to use the services of the Factor. The Debtor is not informed about the existence of the factoring service agreement and continues to transfer funds to the Supplier, which in turn endorses them in favor of the Factor. Currently, the possibility of using closed factoring in Russian conditions is limited, as it leads to a sharp increase in the risks of the Factor. Chapter 43 of the Civil Code of the Russian Federation Art. 830 paragraph 1 states: “The debtor is obliged to make a payment to the financial agent, provided that he has received from the client or from the financial agent a written notice of the assignment of the monetary claim to this financial agent and the notice specifies the monetary claim to be executed, and also indicates the financial agent to whom payment must be made." Usually, the procedure for notifying the debtor about the assignment of the debt to the Factor is undertaken by the Supplier, because the Buyer will perceive this psychologically and technologically easier than receiving this notification from the Factor. Some Suppliers, before making a decision to switch to factoring, are worried that the work of the Factor may affect their customer base. In fact, the conflict between the client and the debtor is primarily unprofitable for the Factor, because its remuneration depends on the turnover of the Supplier. For the Buyer, only the details of the payment order are changed. In modern Russia, factoring is not yet as common as in the West, so some Suppliers meet with misunderstanding on the part of Buyers when signing notices, because the bank appears to them as “people in an armored car and with machine guns”. The fact that the factoring scheme is convenient not only for the Supplier, but also for the Buyer is confirmed by the fact that Russian factoring market operators successfully cooperate with such well-known trading organizations as Ramstor shopping center, Felma LLC (Kopeyka supermarket chain), GUM , TSUM, other large department stores and supermarkets. If we talk about the benefits of factoring for the Buyer, they are not so obvious, but still here are some of them:

· Obtaining a commodity loan (deferred payment), if it was not provided by the Supplier earlier due to a lack of working capital or an unacceptable level of risk for him. If there is a deferred payment - the possibility of increasing its period;

· Obtaining more preferential prices (discounts, etc.) by improving the solvency of the Supplier itself in its settlements with counterparties.

· Expansion of the range of goods (services) sold, which entails attracting new customers and, as a result, an increase in sales and business profitability.

4. Benefits of factoring

Factoring is an indispensable financial tool for new and small companies, as well as for companies that have chosen bank lending limits, because factoring is an unsecured form of financing that does not require a credit history. This does not mean that large companies do not need factoring. For example, Parmalat turned into a well-known manufacturer with the help of factoring and continues to actively use it to this day. Also, large industrial holdings in the West (General Electric, Fiat) establish their own factoring companies that are engaged in intra-company factoring, that is, financing the supply of components on the terms of a commodity loan. Among the Russian companies that have introduced factoring into their business, one can note such well-known manufacturing companies as the Krasny Oktyabr confectionery factory, Salmon International CJSC (frozen products). You can also name a number of large wholesalers and distributors. These are TK Mistral CJSC (Heinz, Green Giant), Vigo Lux CJSC (DIM underwear), Rusmed M LLC (household chemicals), Stupeni-opt LLC (dairy products) , CJSC Apteka-Holding (drugs). Most of the above firms are suppliers of food or consumer goods. This is due to the fact that such goods are the most liquid and their turnover is not so great. So, consider the benefits of factoring for the Supplier:

Possibility of replenishment of working capital;

Accelerating the turnover of working capital;

Expansion of the assortment, which will entail an influx of new customers;

providing more preferential terms of payment for Buyers;

Growth in sales volume, which means growth in profits;

Improving the structure of the balance - it becomes possible to take a loan, for example, to expand production capacity or start working with a new group of goods;

Solving issues related to working capital is a continuous process. Essentially, accounts receivable are capital investments. In fact, the Supplier pays for the goods instead of the Buyer at the time of the transfer of ownership of it when concluding a purchase and sale transaction. It could be considered that the goods are sold only at the time of payment, until this moment the goods are in stock, but the Supplier cannot dispose of them, therefore it is more economically correct to consider receivables as an investment of capital by analogy with investments in stocks, fixed assets and valuable paper. All this is an asset of the company. The choice of how to finance assets is always a choice between risk and profit.

Let us give an example of the benefits of introducing factoring in a business company using the example of the Uniway Management Group of Companies.

The Uniway Management group of companies was founded in 1991. The leading direction of its activity is the production and sale of wine and cognac products. The Group includes the Stavropol Wine and Cognac Factory, one of the largest producers of alcoholic beverages in Russia, as well as several companies that sell their products to both regional consumers and consumers in Moscow and the Moscow Region.

Cooperation with the factoring Bank began in September 2001. The Group's business is characterized by seasonality – sales growth falls on New Year and spring holidays. The Group's management repeatedly planned to raise additional working capital through factoring, but this service seemed to be very expensive, despite the fact that the Group has always borrowed from leading banks at low interest rates.

At the same time, a long-term project was being developed - the construction of an entertainment center for family recreation, which required significant investments, both own and attracted. An acute shortage of working capital in the core business coupled with dynamically growing receivables has sharply increased the need for factoring services.

After repeated negotiations with the Bank, mutual agreements were reached in the field of tariffs and financing limits within the framework of factoring services. When accepting debtors for servicing, the Bank was guided by the payment discipline of the client and the financial condition of the company.

Service began with ten debtors. Currently, the number of debtors varies from 50 to 70. Initially, a small limit was set, which increased over time and currently corresponds to current working capital requirements. The Bank services both Moscow and regional debtors of the company. Thanks to the factoring service, the company's client base is constantly growing. The Bank checks the business reputation of buyers, controls the timeliness of payments, generates daily reports. As a result of joint cooperation, sales in the entire Group increased several times.

The above example clearly shows that the main role of financing in the framework of factoring services for clients is the replenishment of working capital necessary to finance current activities, increasing financial stability and improving liquidity. Financing under this loan product is focused on future sales success and guarantees that there is no shortage of working capital even in the most unpredictable developments.

5.About accounts receivable

The control and management of receivables is a successful condition for the operation of any company, especially a fast-growing one, because investments in assets of this kind can quickly get out of control. The main characteristics of receivables are:

the amount of accounts receivable;

Time of turnover of receivables;

the number of debtors;

Let's try to find out its advantages by modeling the work of a company with a deferred payment using factoring.

Suppose a company delivers to its debtor in the amount of 1 thousand rubles. with 5 days payment delay. After the grace period expires, the debtor pays for the goods and immediately takes a new batch for the same amount and for the same period. At the same time, the proceeds from sales for 20 days will amount to 4 thousand rubles. If the client takes a consignment of goods for the same amount, but with a delay of 10 days, then with the same amount of receivables (1 thousand rubles), the sales revenue for 20 days will already be 2 thousand rubles.

Based on this, we can write the expression for profit:

I T = I + k D T / T D (1),

where I T - profit for a period of time T;

I - profit for this period, excluding profit brought directly by debtor clients;

D - volume of receivables;

T - the period of time for which the profit is considered;

T D - the period of circulation of receivables;

k - coefficient of proportionality between profit excluding fixed costs (i.e. profit proportional to sales proceeds) and proceeds from the sale of goods.

Let's write in more detail what the coefficient k is. Let's write an expression for profit for a period of time T:

I T \u003d [(1- t S) S - E 0 ] (1 - t VAT) (1 - t I) - k S S - E (2),

where S is the Supplier's deferred payment turnover;

E 0 - the cost of purchasing goods sold;

E - other expenses of the company;

t S is the rate of taxes calculated from S (tax on road users, collection for the maintenance of housing stock, etc.);

t VAT - VAT rate;

t I - income tax rate;

k S - coefficient of expenses proportional to S (in our case, the Factor's commission);

Apparently, E 0 is proportional to S:

E 0 = k 0 S (3),

where the coefficient k 0 will be determined by the average ratio of the purchase and sale prices of goods.

Substituting (3) into (2), we get:

I T = k S - E , where

k = (1 - t S - k 0) (1 - t VAT) (1 - t I) - k S (4);

Thus, we have divided the profit into two parts - proportional to the sales proceeds and independent of it.

Now let's write down the values D and T D in more detail:

where d is the number of debtors;

D i - volume of receivables of the i-th debtor;

T Di is the time after which the i-th debtor repays the debt.

Now let's return to expression (1).

First, let's answer the question - does it make sense to increase the volume of receivables of one debtor with a constant turnover? Indeed, the profit will increase, but it will be necessary to increase the capital invested in the business - an increase in the Supplier's working capital will be required:

C D \u003d C + k D D + t 0 D,

where C is the capital invested in this business minus receivables. In fact, these are all lines of the balance sheet asset, one way or another providing, together with this receivable, profit I;

t 0 ·D - receivables associated with the payment of tax payments until the actual receipt of funds for shipped goods. It is typical only for the accounting policy of accounting for the sale of goods upon shipment. With the policy of accounting for the sale of goods upon receipt of funds for shipped goods, this value is equal to zero;

k 0 ·D - receivables in the prices of the purchase of goods sold.

t 0 = t S + t VAT (1- t S - k 0) + t I (1- t s - k 0) (1-t VAT) (5)

The total tax rate proportional to sales proceeds;

Thus,

C D \u003d C + k D D (6),

where k D =k 0 +t 0 (7).

Dividing (1) by (6), we obtain an expression for profitability

(8).

We see that if , or

(9),

then an increase in receivables with a constant turnover time of receivables leads to an increase in the return on invested capital.

Now, let's say inequality (9) is satisfied, and it is beneficial to increase the amount of receivables. However, if the turnover time of receivables T D does not change, then, in the end, we will reach the maximum level of receivables (turnover). Further, the Supplier will be able to increase D only by increasing T D , that is, by increasing the time for which a commodity credit is provided (either for all customers, or selectively). Let's consider in what cases it will be beneficial.

Suppose we have increased the receivables circulation time from T D0 to T D1 . At the same time, the amount of accounts receivable increased from D 0 to D 1 . Whether it is beneficial or not can be determined by substituting the values (D 0 ,T D0) and (D 1 ,T D1) into expression (8) and comparing the two profitability values obtained.

Based on the values (D 0 ,T D0) and (D 1 ,T D1), we will try to determine the optimal value of the receivables turnover time T Dopt . We approximate the dependence D=f(T D) with a linear function:

D=a T D -b (10),

Where

Substituting expression (10) into (8), we obtain

(11),

where e=I+k a T, f=k b T, g=C+k D b, h=k D a.

Analyzing expression (11), we see that if b<0 (а значит и f<0), то увеличение T D приводит к уменьшению рентабельности. Иначе говоря, если увеличение времени оборота дебиторской задолженности приводит к небольшому увеличению дебиторской задолженности, то увеличивать дебиторскую задолженность не имеет смысла.

Now consider the case when b>0, that is, an increase in the turnover time of receivables leads to a significant increase in the amount of receivables.

Differentiating r with respect to T D , equating d r / dT D to zero and finding from this T D , we obtain . Thus, we see that even if an increase in T D leads to a significant increase in D, there is still a value of T D , above which it is unprofitable to increase the turnover time of receivables.

Note that a change in the time for which a commodity credit is granted is, in a sense, equivalent to a change in the price of a commodity. An increase in this time, as well as a decrease in the price of goods, increases sales volumes. Conversely, a decrease in the payment delay time for goods sold (as well as an increase in price) reduces sales volumes. In both cases, there are optimal values at which the profitability is maximum.

Now to the numbers. Let I=10 thousand rubles; D=100 thousand rubles;

T=20 calendar days - the number of days for which profit is calculated;

T D =15 calendar days - the real time of circulation of receivables. If a commodity loan is issued for 10 calendar days, then due to unscrupulous debtors this time may increase significantly;

t s \u003d 0.05 - tax rate calculated from sales proceeds - 4%;

t VAT =0.1667 - VAT rate -16.67%;

t I =0.3 - income tax rate - 30%;

k 0 =0.5 - the prices of purchase and sale of goods differ by an average of 2 times;

k s =0.04 - Factor commission 4% of the Supplier's turnover;

С=150 thousand rubles;

From expression (4) we find k=0.212

From expression (5) we find t 0 =0.274

From expression (7) we find k D =0.774

Let us now use expression (9):

Thus, inequality (9) is clearly satisfied. This is quite understandable, since the profit is provided mainly at the expense of debtors. This means that if you do not change T D , then investing in receivables will increase profitability. However, an increase in accounts receivable will lead to an increase in turnover, which will ultimately increase fixed costs (hiring new employees, increasing rent, etc.). This will abruptly reduce profit I and profitability. Therefore, when changing conditionally fixed costs associated with an increase (decrease) in turnover, it is necessary to check the profitability using formula (8).

In real business, sales managers often make the “toughness” of the fight against debtors dependent on the availability of goods in the warehouse. That is, if there is a lot of goods in the warehouse, then the policy towards debtors is softened, but if there is a shortage of goods (or a shortage is planned), then the policy becomes tougher. This is a typical mistake. The behavior of debtors and the availability of goods are absolutely unrelated. There is an optimal "rigidity" policy in relation to debtors and an optimal stock of goods in the warehouse. An attempt to link these factors leads to the non-optimality of these two factors and, as a result, to a decrease in the return on invested capital. The presence of a third party (Factor) in the relationship between the Supplier and the Buyer somewhat mitigates the severity of the above problem.

6.Credit or Factoring

Of course, it cannot be said that factoring solves all the Supplier's problems. Many potential clients of factoring companies try to compare factoring and credit operations. This is an extremely incorrect comparison, but to remove questions about the differences between these two products, it is worth quoting:

Credit	Factoring
The loan is returned to the Bank by the borrower	Factoring financing is repaid from the money paid by the client's debtors
The loan is issued for a fixed period	Factoring financing is paid for the term of the actual payment deferral
The loan is repaid on the date specified in the loan agreement	Factoring financing is paid on the day of delivery of the goods
The loan is usually secured	No collateral is required for factoring financing
The loan is issued for a predetermined amount	The amount of actual financing is not limited and can increase without limit as the client's sales volume grows.
The loan is repaid on a predetermined date	Factoring financing is repaid on the day the debtor actually pays for the delivered goods
To get a loan, you need to draw up a huge number of documents	Factoring financing is paid automatically upon presentation of the delivery note and invoice
Paying off a loan does not guarantee a new one.	Factoring financing continues indefinitely
The cost of paying interest on a bank loan is charged to cost within the discount rate of the Central Bank of the Russian Federation + 3%	The cost of factoring commission is charged to the cost price in full
When lending, in addition to transferring money, the Bank does not provide the borrower with any services	Factoring financing is accompanied by receivables management

When reflecting factoring operations in the company's balance sheet, it must be remembered that in accordance with the "Regulation on the composition of costs for the production and sale of products (works, services) included in the cost of products (works, services) and on the procedure for generating financial results taken into account when taxing profits ” dated 05.08.98 (clause 2. y) should be attributed to the costs associated with the sale of products, the costs of paying for “... bank services for the implementation in accordance with the concluded agreements of trade and commission (factoring) and other similar operations”. Factoring transactions are transactions subject to value added tax (letter of the State Tax Service and the Ministry of Finance of the Russian Federation dated August 7, 1992 No. VZ-6-05 (251.70). Accordingly, the factoring commission includes VAT, so the client of the factoring company has the right to set off the paid tax when transferring received VAT to the budget.

In international practice, a large proportion of factoring operations are accounted for by specialized branches or subsidiaries of banks and other institutions of the credit and financial sector, there are also factoring companies owned by large industrial companies and transnational corporations.

At the moment, the provision of factoring services in the territory of the Russian Federation is mainly carried out by credit institutions. This is due to the fact that ch. 43 of the Civil Code of the Russian Federation Art. 825 establishes: “As a financial agent, financing agreements against the assignment of a monetary claim may be concluded by banks and other credit organizations, as well as other commercial organizations that have a permit (license) to carry out activities of this type.” The procedure for obtaining permits (licenses) is not reflected in any regulatory acts. Competition in the banking business is now extremely aggravated. A bank client, both small and medium, wants to see in it not only a high-tech cash and settlement center, but a business partner, financial intermediary and consultant. Credit institutions cannot but respond to the emerging market conditions and respond by universalizing their activities. In Russia, the introduction of factoring was started in 1988 as an experiment by Promstroybank and Zhilsotsbank of the USSR. Due to the complete absence at that time of any methodological literature and the inability to gain access to world experience, the essence of this service was somewhat distorted. Only overdue receivables were assigned to factoring departments, the agreement was concluded with both the supplier and the buyer, and the supplier was guaranteed payments by crediting the buyer. Factoring services were of the nature of one-time transactions without providing a set of insurance, information, accounting and consulting services, implied by factoring.

Conclusion

Factoring in Russian economic activity appeared not without reason. Its objective prerequisites were the most acute difficulties with calculations, the lack of "live" money.

The development of business in various sectors of the economy (food, light, pharmaceutical, oil refining, automotive industry), especially in recent years, leads to increased competition in the market. Many companies must have sufficiently high competitive advantages (logistics, sales, price and quality advantages, etc.) for sustainable development and business prosperity. Major players in the market dictate their conditions for the consumption of goods and services (granting and increasing payment deferrals, improving the sales structure). Companies with sufficiently broad development plans can increase sales of goods by providing their customers with a commodity credit or deferred payment on favorable terms (longest term, maximum amount, minimum documents required and a small margin), which leads to shortage problems. own working capital.

Companies use various sources of working capital replenishment, including a range of loan products: overdraft, short-term, medium-term lending, factoring, lending under the assignment of a monetary claim. As a rule, companies use loans in case of a shortage of working capital to carry out their activities.

Factoring as a product is in demand by the enterprise in the case when it needs to increase the current sales volume of its products. This type of financing does not solve any local material problems of the enterprise, but it solves one of the main problems - the problem of effective marketing of products.

Of course, for this it is necessary to use the services of a company that will undertake the financing of deliveries, insurance of the risks of non-payment on the part of the buyer and the actual work with buyers, in particular control over the timeliness of payment, etc. It is in the interests of customers that there are more such companies and banks, so that market for these services.

So, it is quite difficult to create a fast-growing factoring market in our country. But many banks today are inventing all sorts of alternative products, the ultimate goal of which is to gain a competitive advantage and meet the needs of customers not only in their current operations, but also in financing the rapid growth of the business, which is difficult to achieve with conventional lending.

Bibliography

1. Transactions with related parties: international supervisory practice "Management in a credit institution", 2006, No. 2

2. Portrait of a consumer of bank loans "Banking Retail", 2006, No. 1

3. Prerequisites for the emergence of a crisis of problem loans "Bank lending", 2006, No. 1

4. Some issues of bringing to administrative responsibility for improper advertising of banking services "Legal work in a credit institution", 2006, No. 1

5. Letter of the Central Bank of the Russian Federation No. 181-T and its compliance with IFRS "Implementation of International Financial Reporting Standards IFRS in a credit institution", 2006, No. 2

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9. Methodology for accounting for loans under IFRS "Implementation of International Financial Reporting Standards IFRS in a credit institution", 2006, No. 1

In most industries, factoring can be used as a source of financing for the enterprise. After all, for suppliers - this is a way to get rid of the lack of working capital and cash gaps, and for buyers - the ability to defer payment for the required time.

Most often, a commercial loan, better known as a deferred payment, is used as the main source of financing for the activities of an enterprise. But by providing such a loan, many suppliers are faced with a lack of working capital and cash gaps. For buyers, the main problem is the inability to defer payment for the time they need. Here one can consider factoring as a source of financing for the enterprise.

The classic product provides for the financing of the supplier against the assignment of claims to the buyer for the supply of goods (works, services) with a deferred payment. The main goal for the supplier in this case is to obtain financing in order to be able to provide commercial credit to its customers. If the buyer is interested in receiving a reprieve from the seller, he can use a reverse service called purchasing (reverse) factoring.

The interaction of the parties when using purchasing factoring consists of several stages.

A tripartite agreement is concluded between the factor, the seller and the buyer.
The supplier ships the goods (or provides services) to the buyer in accordance with the supply contract.
The assignment by the supplier of the rights of monetary claims to the factor and the transfer to it of shipping documents confirming the fact of delivery or provision of services.
The factor pays the supplier financing in the amount of 100 percent of the delivery amount.
After the expiration of the period specified in the contract, the buyer pays the factor the full cost of goods (works, services).

Factoring and its financial features

Under a purchasing factoring agreement, the supplier receives 100% financing (with classical factoring, financing does not exceed 90%) without the right of recourse, that is, if the buyer fails to pay, the factor cannot file a claim against the supplier. Such a factoring scheme provides protection against the risk of non-payments, they remain with the factor. Suppliers working with this counterparty can join the work under a purchasing factoring agreement under a simplified scheme.

If the supplier does not need to replenish working capital immediately after delivery, he can use the payment guarantee from the factor. The funds will be paid exactly on the day the deferral ends, which will allow the company not to disrupt its financial cycle and at the same time not overpay for the attracted financing.

The most important advantage of reverse factoring for the buyer is the ability to receive from the factor a deferred payment in excess of that provided by the supplier. Another plus is that a tripartite agreement allows you to share costs with him in any convenient proportion, depending on who is more interested in receiving factoring services.

How to calculate the cost of factoring services

The factoring service fee can be distributed between the supplier and the buyer, for example, according to the following principle: the commission for the first 60 days of the delay is paid by the supplier, and for the subsequent period - by the buyer. This possibility is all the more relevant, since factoring services are by no means cheap.

The cost of factoring services includes several types of commissions:

for the processing of documents confirming the fact of delivery or provision of services. This is usually a fixed amount;
for the administration of accounts receivable. Charged as a percentage of the amount of ceded claims;
for the provision of funds within the framework of factoring services. Calculated as a percentage of the amount of funding provided for each day the funds are used;
for an additional deferred payment. Paid by the buyer in the amount of a percentage of the amount of the current debt on the assigned monetary claim for each additional day of delay.

The cost of factoring services is also affected by the individual parameters of the transaction, such as the period of use by the buyer of an additional deferral, the amount of monthly repaid debt, and the financial condition of the organization. For large and reliable companies that act as buyers in a reverse factoring transaction, the conditions will be more favorable than for small supplier companies in recourse factoring. The range of rates for reverse factoring in the Russian market is quite wide and currently ranges from 18 to 24 percent per annum, which is much higher than for loans.

The effectiveness of factoring in the enterprise

To evaluate the effectiveness of reverse factoring, calculate the cost of covering cash gaps, the cost of deferred payment from suppliers. Determine the optimal payment grace period and compare with the current one. It is better to work out the reverse factoring scheme with the main supplier, and then offer it to other counterparties.

The factoring mechanism as a method of financing Russian enterprises is not available to everyone; factoring companies impose a number of requirements on the financial position and solvency of counterparties. When concluding a reverse factoring transaction, special attention is paid to the analysis of the financial and economic activities of the buyer. Standard methods of credit analysis are used to determine financial stability and solvency. Such indicators as the volume of revenue, financial result are considered. In addition, a number of specific parameters are analyzed, for example, such as the liquidity of the purchased products, the relationship between the buyer and suppliers, the duration and quality of their cooperation.

Before concluding a transaction, the factor must also be convinced of the reliability of the supplier, since there are situations when the requirements for delivery are transferred back to him, for example, when the buyer returns a low-quality product.

The scope of purchasing factoring includes almost any industry. This product is used, in particular, by retail chains, which thus provide themselves with the maximum delay. For manufacturing companies, purchasing financial factoring allows them to obtain a commercial loan from their suppliers, cover the resulting cash gap and pay off their obligations on time. In a number of industries, the use of this financing tool can also allow the company to gain competitive advantages.

Factoring in the practice of Russian enterprises

Personal experience
Alexey Zholob,

director of the trading house "Nautilus"
In the fish business, which we have been in for many years, the use of reverse factoring has an interesting effect. Many people know that some types of fish are caught only once a year, and in order to ensure the maximum profitability of sales, it is necessary to purchase at a time such a volume of products that would be enough to sell throughout the year. Previously, only large companies with access to long-term financing could afford this. Purchasing factoring makes it possible to compete with them. Using it, we increased our sales by 20 percent. We can afford to sell products with maximum profit, choosing for this a moment when a favorable situation develops on the market. In addition, we freed up funds that were used to open a network of retail outlets.

Mikhail Khoroshev,

Deputy Financial Director of the cabinet factory "RONIKON"

Purchasing factoring is one of the tools for financing the current activities of our company. Consideration of the application by the factor took about a month and a half, the process itself was similar to a regular loan application of any bank, so it did not cause any particular difficulties. A certain problem was the coordination of the scheme of work with suppliers - largely due to changes in the calculations, since the payment came from the factor and there was a need for mutual offsets. The document flow also had to be coordinated separately - despite the development of digital technologies, the provision of originals confirming the delivery of documents was a mandatory requirement of the factor. It is worth noting the high cost of factoring relative to other sources of financing, so the appropriateness of its use is determined in each specific case.
The use of purchasing factoring made it possible to more flexibly manage receivables, quickly increase the actual payment deferrals and not burden the company's assets with additional collateral. Proper use of this tool can also bring benefits to the company, for example, if a supplier is ready to provide a discount when switching from deferred payment to post-shipment settlement terms, then the company’s savings on this discount may exceed its factoring costs - in this case, the factor pays with the supplier immediately after delivery, you get a discount, and you already pay the factor for the delay.

Lipaeva Elena Evgenievna

Faculty of Economics and Management, Branch of the Federal State Budgetary Educational Institution of Higher Professional Education "National Research University "MPEI" in Smolensk, Russia

Annotation: the article deals with factoring and other forms of business financing, as well as difficulties with sources of credit for medium and small enterprises. Options were proposed to eliminate these problems, and the prospect of using factoring as a financial and credit service for small businesses was also considered.

Keywords: factoring, forfaiting, franchise, lending

Factoring and other forms of business financing

Lipaeva Elena E.

Faculty of Economics and Management, a subsidiary of the federal government"s budget educational institution of higher professional education "National Research University" MEI "in Smolensk, Russia

Abstract: The article discussed factoring and other forms of business financing , as well as difficulties with sources of credit for small and medium enterprises. Options have been proposed to resolve these issues, as well as has been considered the prospect of using factoring as a financial and credit services small businesses.

Keywords: factoring, forfeiting, frenchayz, lending

Factoring - as an economic category, is a type of trade and commission operations in which a bank or a specialized factoring organization buys the supplier's monetary claims against the buyer and implements the collection of his receivables.

Understanding the economic essence of factoring is connected with understanding its place in the system of other forms of business financing.

An operation similar to direct export factoring is forfaiting, which refers to lending to the exporter by purchasing commercial bills accepted by the importer without the right of recourse to the seller. In fact, forfaiting can be viewed as a way to refinance a commercial loan in foreign trade.

The similarities and differences between export factoring and forfaiting are presented in Table 1:

Table 1 - Comparison of export factoring and forfaiting

similarity	Differences
Credit provided in commodity form is transformed from commercial to banking; A third party appears in the relationship between the supplier and the buyer; The supplier is exempt from functions not related to production; Supplier risks are reduced; High cost of operations.	grounds	Export factoring	forfaiting
		Short-term lending (90-180 days)	Medium-term lending (from 6 months to 5-8 years) or long-term lending (up to 11 years)
		The factor takes part of the risks of the exporter	All risks of the exporter pass to the forfaiter
	The nature of the operation	Assumes constant communication between the parties and the existence of a comprehensive service system	It is a one-time operation associated with the collection of funds under a specific document
	The nature of the requirements	The debtor has the right to make claims against the supplier, against the factor	The debtor does not have the right to make claims against the forfaiter

One more feature of forfeiting should be highlighted - the presence of a secondary market where resale of purchased commercial bills is possible. But such a market does not yet exist in Russia. Currently, only single such transactions can be considered. This is due to the unwillingness of banks to accept the medium-term risks of developing countries, and for the risks of developed countries there is high competition on rates. The main players in the forfaiting market in Russia are foreign forfaiters: London Forfaiting Company, which has a representative office in Moscow, the German bank WestLB, which has its own subsidiary, WestLB Vostok.

Often, factoring is identified with a bank loan, which is not true. Compare factoring and lending. The comparison is shown in table 2.

Table 2 - Comparison of factoring and lending

Criteria	Factoring
subjects	Bank or specialized company, supplier, buyer	Bank, client
Timing of funding	The term of the actual deferred payment (90-180 calendar days)	fixed term
Repayment terms	Day of actual payment by the debtor for the delivered goods	prearranged day
Payment terms	Day of delivery of the goods	Day stipulated by the loan agreement
Terms of service	Indefinitely	Paying off a loan does not guarantee a new one.
Repayment method	From money received from customers' debtors	Returned to the bank by the borrower
Security	Not required. Only the history of the client's work with his debtors matters	It is issued on security and provides for turnover on the current account, adequate to the loan amount
	Unlimited and can increase as the client's sales volume grows	Issued for a predetermined amount
Reward	Depends on the amount of debt transferred to the financial agent	Loan interest rate
Decor	Factoring financing is paid automatically upon presentation of the delivery note and invoice	Requires a lot of paperwork
Escort	Information, accounting, consulting, legal and other services, receivables management	Mandatory transition of the borrower to settlement and cash services in the bank

The data in the table shows that the financial products under consideration are aimed at meeting the different needs of providers in different ways. The only common thing is the essence of the operation - financing.

Knowledge of these provisions will allow more efficient use of the tools offered by the financial services market, competently manage the finances of an economic entity.

At the present stage, lending under a franchise type contract is singled out - a form of relationship between large and small businesses, when an average-sized firm receives assistance from an industrial or trading transnational company in the form of a cash loan, leasing, factoring.

Currently, factoring is a means of increasing the liquidity of assets and the turnover of funds of enterprises, primarily small and medium-sized ones. These enterprises, contributing to the stabilization of the consumer market and the labor market, the acceleration of development and the introduction of technical innovations into production, the revival of export activities, traditionally experience difficulties with sources of credit. This appears to be due to the following reasons:

First, the inaccessibility for them of the usual capital markets and the money market, as a result of which their need for short-term and bank credit, attracted to replenish working capital, increases. The issuance of securities for small amounts is a rather expensive undertaking for such enterprises, and the market for such securities is much narrower compared to financial instruments of larger securities;

Secondly, discrimination in providing them with a bank loan - they are required to provide large guarantees. Due to the fact that this category of borrowers has questionable creditworthiness, it is unprofitable for credit institutions to fully meet the needs of small enterprises in loans, especially for small amounts and for risky activities;

Third, the high cost of borrowing for small businesses.

Fourth, financial difficulties in exporting products, including: lending and deferred payment; registration of special documents for the export of products; lack of necessary information about foreign markets; the need for the product to meet requirements other than internal ones; lack of representation abroad; increasing costs and decreasing profitability.

The following factors will influence the activation of banks in the field of small business lending:

High level of competition in the segments of servicing large corporate clients and consumer lending, leading to lower margins with growing risks. The increasing attractiveness of this area is due to the fact that the cost of borrowing for medium and large enterprises is much lower than for small ones, while the risks in these sectors differ to a much lesser extent;

The desire of banks to diversify the loan portfolio. This is facilitated by a large number of small borrowers;

State interest in the issue of small business development. But at the same time, many financial institutions that actively work with small businesses registered as legal entities refuse to lend to individual entrepreneurs.

In this regard, it is promising to use various non-traditional types of financial and credit services for small businesses, including leasing and factoring.

The effectiveness of factoring as a means of financing small businesses is determined by the fact that the company not only acquires a good reputation, but can also count on a discount for immediate payment, usually in the amount of 2-3% of the payment amount. Factoring, with its wide and flexible range of services, is one of the most attractive forms of lending to both domestic and export activities of small and medium-sized enterprises, facilitating their entry into a competitive situation with minimal initial capital.

Nevertheless, factoring is attractive to most corporations, regardless of the size of their business. It allows small companies to receive financing without collateral. Medium-sized enterprises in factoring are attracted by risk insurance and receivables administration. For large enterprises, factoring allows you to "clear" the balance - to reduce accounts receivable without increasing accounts payable. This is especially important if the company plans to attract investors. In addition, for large enterprises, the issue of getting rid of receivables is always relevant.

Bibliography:

Raizberg B.A., Lozovsky L.Sh., Starodubtseva E.B. Modern economic dictionary. M., 2008, S. 436
Kuryshev D.V., Steshina M.O. Forfeiting - new frontiers in a crisis. The experience of a Japanese bank in Russia // International banking operations 2009. No. 3; Bryukov VG Forfeiting and its application in foreign trade: mechanism and technology // International banking operations. 2011. No. 4; Rannih N. A. Forfeiting: prospects and problems // International banking operations. 2005. No. 4; Gumanov K. Transaction outside the law // Finance. No. 35, September 26 - October 2, 2006.
Vaulina Y. Brought debts - took money // Expert - Volga. September 24, 2007. No. 35; Without collateral and loans // "SmartMoney" / September 01, 2008. No. 32; Logvinov M. Credit of trust // Company. December 5, 2011. No. 45; Velikanova O. Appetite returns // Expert North-West.: June 2011. No. 2; Logvinov M. Regression factor // Company. October 31, 2011. No. 40.

Factoring is a relatively new type of financing service, intended primarily for new small and medium-sized enterprises. They are engaged in special factoring firms that are closely associated with banks or are their subsidiaries. Currently, factoring operations are experiencing their rebirth in connection with the problems of non-payments that arise between enterprises. The basic principle of these operations is that the factoring company buys from its clients their claims to their clients and within 2-3 days they pay 70-90% of the claims in the form of an advance, the client receives the remaining 10-30% after payment of his claims by the payer. At the same time, the commission and interest on the provided financing are withheld upon receipt of funds in payment for the assigned claim.

The concept of factoring means the purchase of trade debts of the supplier of goods with the assumption of obligations to collect them and the risk of non-payment. Factoring is a set of services for financing and collection of receivables with subsequent possible information, insurance, accounting, consulting and legal support for the client. The economic efficiency of factoring is manifested in the fact that it allows you to increase the liquidity of the company's assets, the turnover of its capital and thus the profitability of its activities. In most cases, the supplier is interested in reducing cash gaps caused by deliveries on an open account basis. Factoring service is the shortest way to solve this problem, because the factor has the ability to pay an advance payment in the amount of up to 85% of the amount of the accepted invoice on the day the documents for the perfect delivery are transferred to it. The remaining 15% is transferred to the supplier upon receipt of payment from the debtor, minus the factor fee, which consists of a service fee and a financing fee, if provided. The first component of the commission is charged in the form of % (1.0% - 3.5%) of the supplier's turnover, which depends on how wide the range of services the factor provides. The second reflects the cost of credit resources used for advance payments. Typically, the factoring company's commission for providing funds to the client is the interest rate for each day from the moment the early payment is paid until the day the corresponding funds are received in the factor's account, and this rate is higher than the rate for commercial loans. The presence of a recourse (return requirement to the supplier) somewhat reduces the cost of factoring services.

Factoring is an indispensable financial tool for small and medium-sized companies, as it facilitates access to sources of financing, makes it possible to concentrate on the problems of running and developing a business, and allows you to reduce fixed costs for accounting for sales, maintenance and timely collection of DZ or completely get rid of them. The use of factoring allows enterprises to reduce the cost of maintaining special financial units and increase the efficiency of financial services by transferring their functions to special structures. Commercial banks offer a range of financial services in exchange for transferring clients' money claims to banks.

Thus, the main functions of factoring are: protecting the interests of the supplier by financing its current activities; control over the granted commercial credit, including receipt of proceeds from the debtor; maintaining relevant accounting operations; credit risk protection.

In Russia, factoring operations have been carried out by banks since 1988.

Factoring can be both open and closed. With open factoring, the debtor notifies that a factor is involved in the transaction and makes payments to his account, thereby fulfilling his obligations under the supply agreement. In this case, there is a tripartite form of the contract. In the case of closed factoring, the debtor is not aware of the existence of a factoring service agreement and continues to make payments to the supplier, who, in turn, sends them to the factor. Currently, the use of closed factoring leads to a sharp increase in the risks of the factor, since Chapter 43 of the Civil Code of the Russian Federation states: “the debtor is obliged to make a payment to the financial agent, provided that he received a written notification from the client or from the financial agent about the assignment of the monetary claim to this financial agent and the notice specifies the monetary claim to be enforced and specifies the financial agent to whom the payment is to be made.” The sale of DZ can be with the right of recourse, that is, a return claim against the supplier, or without it. The presence of recourse means that in case of non-receipt of payment from the debtor after a certain period of time, the factor makes demands on the supplier to pay the debt. Recourse factoring to the customer reduces the bank's risk, while non-recourse factoring to the customer limits the manufacturer from the risk of non-payment. The maximum satisfaction of the interests of the factor and its client is achieved by combining different types of factoring.

Factoring is one of enterprise financing sources. Recall that a factoring service is a service that contains at least two of the following four operations:

- supplier financing;
- keeping records of claims;
- collection of receivables;
- debtor's insolvency protection.

The most progressive factoring companies provide a range of services: legal support in formalizing relations with contractors; building an effective sales system; optimization of information flows. That is, they do not so much lend to the company as increase its profitability; in essence, a new commercial director appears in the company.

Small businesses are interested in a stripped-down version of factoring, which is a loan secured by receivables. The financing of such companies is associated with a rather high risk, and the provision of factoring services to small enterprises is mainly carried out by small commercial banks.

Factoring allows you to use capital more productively and keep track of cash flow.

Similar information.

Intro 3

1. Types of factoring 5

2. Analysis of the solvency of the buyer 6

3.Closed and open factoring 7

4. Benefits of factoring 10

5.About accounts receivable 13

6.Credit or Factoring 19

Conclusion 22

References 24

Introduction

1) conducting relevant accounting operations;

2) control over the provided commercial credit, including the receipt of payments;

3) protection against credit risks (in the case of factoring "without turnover");

4) financing of the client's current activities.

1. Types of factoring

Depending on the availability of the Supplier's financing function, factoring services are divided into:

Factoring with payment (with service factoring), which includes the collection of debt, the assumption of the risk of non-payment and the transfer of funds as they are paid by the Buyer. In Russian practice, this is called the administrative management of receivables. In this case, the Factor's commission is about 0.5-1% of the amount of the assigned receivables. The amount of the commission varies from the total debt of the Supplier, decreasing with its growth;

Factoring with payment and financing (with service plus finance factoring) includes the payment to the Supplier immediately after delivery of the goods up to 90% of their sale price, if there are invoices accepted by the Buyer. The balance is paid after the debt is repaid. In this case, the Factor sets the risk reward for advance payments (0.5-1.2% of the debt amount) depending on the total number of debtors transferred to factoring services. With an increase in the number of debtors, the risks of the Factor are eroded and the commission is reduced. The Supplier also pays the Factor a fee for the use of monetary resources, which is several points higher than the credit rate. The amount of this fee depends on the turnover period of the Supplier's receivables. In Russia, Factor usually requires the submission of original documents for the delivery (invoice and consignment note), charging a small commission (about 50-70 rubles per invoice) for registering these documents. In Western practice, such a component of the commission also exists, but often the Supplier sends an electronic file to the factoring company containing a sales book for a certain period, the original documents for deliveries are provided later.

There are usually three parties involved in internal factoring transactions: the Supplier, the Buyer and the Factor. In this case, the factoring scheme looks quite simple:

2.Analysis of the solvency of the buyer

3.Closed and open factoring

Obtaining a commodity loan (deferred payment), if it was not provided by the Supplier earlier due to a lack of working capital or an unacceptable level of risk for him. If there is a deferred payment - the possibility of increasing its period;

Obtaining more preferential prices (discounts, etc.) by improving the solvency of the Supplier itself in its settlements with counterparties.

Expansion of the range of goods (services) sold, which entails attracting new customers and, as a result, an increase in sales and business profitability.

4. Factoring Benefits

Factoring is an indispensable financial tool for new and small companies, as well as for companies that have chosen bank lending limits, because factoring is an unsecured form of financing that does not require a credit history. This does not mean that large companies do not need factoring. For example, Parmalat turned into a well-known manufacturer with the help of factoring and continues to actively use it to this day. Also, large industrial holdings in the West (General Electric, Fiat) establish their own factoring companies that are engaged in intra-company factoring, that is, financing the supply of components on the terms of a commodity loan. Among the Russian companies that have introduced factoring into their business, one can note such well-known manufacturing companies as the Krasny Oktyabr confectionery factory, Salmon International CJSC (frozen products). You can also name a number of large wholesalers and distributors. These are TK Mistral CJSC (Heinz, Green Giant), Vigo Lux CJSC (DIM underwear), Rusmed M LLC (household chemicals), Stupeni-opt LLC (dairy products) , CJSC Apteka-Holding (drugs). Most of the above firms are suppliers of food or consumer goods. This is due to the fact that such goods are the most liquid and their turnover is not so great. So, let's consider the benefits of factoring for the Supplier.