McKinsey on Finance is a quarterly publication written by experts and practitioners in McKinsey and Company's Corporate Finance practice. This publication offers readers insights into value-creating strategies and the translation of those strategies into company performance. McKinsey on Finance articles are available online at www.mckinseyquarterly.com.
January 23rd, 2017
One way companies can raise immediate capital or mitigate the risk of being able to collect on their accounts receivable is to sell them off to a third party -- otherwise known as “factoring.” What is it, how does it work, and under what circumstances should a company factor?