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      Albanian legal framework on Factoring contract

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      Academicus : International Scientific Journal

      Academicus Journal

      contract, factoring, factor, debtor

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          Abstract

          Factoring contract is a new phenomenon, compared to earlier forms of commerce in juridical circulation. Factoring is a method used by a firm to obtain cash when available cash balance, held by the firm, is insufficient to meet current obligations, and accommodate its other cash needs, such as new orders or contracts. The use of factoring to obtain the cash, needed to accommodate the firm’s immediate cash needs, will allow the firm to maintain a smaller ongoing cash balance. By reducing the size of its cash balances, more money becomes available for investment in the firm’s growth. A company sells its invoices at discount to their face value when it calculates that it will be better off proceeding to bolster its own growth than it would be by effectively functioning as its “customer’s bank”. Many businesses have cash flow that varies. A business might have a relatively large cash flow in one period, as well as a relatively small cash flow in another period. Because of this, firms find it necessary to both keep a cash balance on hand, and use such methods as factoring, in order to enable them to cover their short term cash needs in those periods in which these needs exceed cash flow.

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          Author and article information

          Journal
          Academicus : International Scientific Journal
          Academicus Journal
          01 July 2013
          : MMXIII
          : 8
          : 161-171
          Article
          c2d27be806544292865ccddfdf260014
          10.7336/academicus.2013.08.10

          Distributed under the terms of the https://creativecommons.org/licenses/by-nc-nd/4.0/, which permits noncommercial use and distribution in any medium, provided the original author(s) and source are credited, and the original work is not modified.

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          Categories
          Social Sciences
          H
          Economics as a science
          HB71-74

          Sociology, Political science, Social & Behavioral Sciences, Law, Philosophy, Economics

          factor, factoring, contract, debtor

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