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Differentiate Between Factoring And Bills Discounting?

Answer»

The differences between Factoring and Bills discounting are:

  • Factoring is called as 'Invoice Factoring’ whereas Bills discounting is known as ‘Invoice discounting.'
  • In Factoring, the parties are known as the CLIENT, factor and debtor whereas in Bills discounting, they are known as drawer, drawee and payee.
  • Factoring is a SORT of management of book DEBTS whereas bills discounting is a sort of borrowing from COMMERCIAL banks.
  • For factoring there is no specific Act, whereas in the case of bills discounting, the Negotiable INSTRUMENTS Act is applicable.

The differences between Factoring and Bills discounting are:



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