Selling Invoices

 

Invoice Factoring is often described as "selling invoices," which is technically a misnomer because one does not really sell "invoices."

 

The law and accounting theory have developed different labels for the item being sold. The law labels the item as an "account," and accounting theory labels it as an "account receivable." An invoice is not the item, regardless of whether one is speaking legally or from an accounting standpoint, but it is just a mere paper or electronic representation of the "account" or "account receivable." This is anologous to shares of corporate stock which are indicia of ownership of an interest, whether large or small, in a corporation, whether publically traded or privately held. The shares take the paper and/or electronic form of stock certificate, which is a mere representation of the ownership interest similar to an invoice, which is a representation of an "account" or "account receivable.

 

Therefore, "selling invoices" is shorthand for transferring and assigning an interest or interests in "accounts" or "accounts receivable."

Selling Invoices

 

Invoice Factoring is often described as "selling invoices," which is technically a misnomer because one does not really sell "invoices."

 

The law and accounting theory have developed different labels for the item being sold. The law labels the item as an "account," and accounting theory labels it as an "account receivable." An invoice is not the item, regardless of whether one is speaking legally or from an accounting standpoint, but it is just a mere paper or electronic representation of the "account" or "account receivable." This is anologous to shares of corporate stock which are indicia of ownership of an interest, whether large or small, in a corporation, whether publically traded or privately held. The shares take the paper and/or electronic form of stock certificate, which is a mere representation of the ownership interest similar to an invoice, which is a representation of an "account" or "account receivable.

 

Therefore, "selling invoices" is shorthand for transferring and assigning an interest or interests in "accounts" or "accounts receivable."