reverse Factoring

reverse Factoring

Reverse factoring, also known as supply chain financing, is a buyer-driven financing solution that improves supplier liquidity and strengthens business relationships—without affecting the buyer’s cash flow.

Unlike traditional factoring, where the supplier initiates the transaction, reverse factoring is initiated by the buyer, often a large and creditworthy company. Here’s how to implement and manage reverse factoring in SOFT4Factoring.


1. Set Up a Reverse Factoring Agreement

  • Create a new factoring agreement as you would for conventional factoring.

  • The setup steps are identical—refer to the factoring agreement creation guide if needed.


2. Configure the Discount Field

  • In the Interest and Commissions section of the agreement, locate the Discount field.

  • This can be set as:

    • A fixed amount

    • A percentage (e.g., 5%) of the invoice value

  • In reverse factoring, this discount represents the amount the vendor agrees to forgo in exchange for early payment.

Note: Though some may refer to this as a commission, in reverse factoring, it is recorded and tracked specifically as a discount for complete financial transparency.


3. Apply Automatic Discounts to Invoices

  • Once the agreement is active, every new invoice added under this agreement will automatically apply the configured discount (e.g., 5%).


4. Add or Adjust a Discount Manually

  • Navigate to the Invoices section and create a new invoice.

  • Fill in the required details: Debtor, Invoice Date, Amount, etc.

  • You can manually adjust the discount percentage if a custom agreement is in place.

  • The advance amount will recalculate based on the new discount.

  • If needed, revert to the default percentage and accept the invoice.


5. View Key Invoice Financials

  • Open the Invoice Card to review:

    • Amount payable to the vendor

    • Advance amount

    • Debtor’s outstanding amount

    • Discount value in the Term Charges section


6. Proceed with Disbursement and Collection

  • After invoice acceptance, follow the standard steps for:

    • Funds disbursement to the vendor

    • Debtor payment collection
      Refer to the relevant SOFT4Factoring guides for detailed walkthroughs of these processes.



Reverse factoring, also known as supply chain financing, is a buyer-driven financing solution that improves supplier liquidity and strengthens business relationships—without affecting the buyer’s cash flow.

Unlike traditional factoring, where the supplier initiates the transaction, reverse factoring is initiated by the buyer, often a large and creditworthy company. Here’s how to implement and manage reverse factoring in SOFT4Factoring.


1. Set Up a Reverse Factoring Agreement

  • Create a new factoring agreement as you would for conventional factoring.

  • The setup steps are identical—refer to the factoring agreement creation guide if needed.


2. Configure the Discount Field

  • In the Interest and Commissions section of the agreement, locate the Discount field.

  • This can be set as:

    • A fixed amount

    • A percentage (e.g., 5%) of the invoice value

  • In reverse factoring, this discount represents the amount the vendor agrees to forgo in exchange for early payment.

Note: Though some may refer to this as a commission, in reverse factoring, it is recorded and tracked specifically as a discount for complete financial transparency.


3. Apply Automatic Discounts to Invoices

  • Once the agreement is active, every new invoice added under this agreement will automatically apply the configured discount (e.g., 5%).


4. Add or Adjust a Discount Manually

  • Navigate to the Invoices section and create a new invoice.

  • Fill in the required details: Debtor, Invoice Date, Amount, etc.

  • You can manually adjust the discount percentage if a custom agreement is in place.

  • The advance amount will recalculate based on the new discount.

  • If needed, revert to the default percentage and accept the invoice.


5. View Key Invoice Financials

  • Open the Invoice Card to review:

    • Amount payable to the vendor

    • Advance amount

    • Debtor’s outstanding amount

    • Discount value in the Term Charges section


6. Proceed with Disbursement and Collection

  • After invoice acceptance, follow the standard steps for:

    • Funds disbursement to the vendor

    • Debtor payment collection
      Refer to the relevant SOFT4Factoring guides for detailed walkthroughs of these processes.



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