Fibus Glossary

The aggregate amount owed to a company by its customers for goods delivered or services rendered that remain unpaid at a given date. Accounts receivable are recorded on the balance sheet as a current operating asset and represent outstanding trade debts due from customers.

An aged receivables report is a management reporting tool used to classify outstanding customer receivables according to their ageing profile relative to the invoice due date. Receivables are typically grouped into 30-day ageing buckets (current, 0–30 days overdue, 31–60 days overdue, etc.).

For each customer, the report provides visibility on invoices that are not yet due as well as overdue balances by ageing category. In certain UK and US accounting environments, ageing reports may also be prepared based on invoice issuance dates rather than contractual due dates.

Trade receivables that have been legally transferred by a company to a factor, lender or other financing institution under a receivables finance arrangement.

Balance assignment factoring is a receivables financing method in which funding is determined on the basis of the client’s accounts receivable ledger (debtor balance).

Under this approach, the factor funds newly generated invoices at regular intervals (e.g. every 15 days) by calculating the variation between the current accounts receivable balance and the previous reporting period. The factor monitors and controls utilisation to ensure that the outstanding advance does not exceed a predefined percentage of the eligible receivables balance, typically between 80% and 90%.

This structure provides a rolling funding mechanism aligned with the evolution of the receivables ledger rather than individual invoice-by-invoice financing.

A bill of exchange is a negotiable payment instrument whereby one party (the drawer) instructs another party (the drawee) to pay a specified sum at a future date to a named third party (the payee) or to the drawer themselves.

In practice, the drawee must formally accept the bill by signing it, thereby creating a binding obligation to pay the stated amount on the agreed maturity date.

Bolt-on acquisitions are add-on transactions whereby a company acquires smaller businesses and integrates them into an existing platform company, typically within a private equity-backed structure. These acquisitions are used to expand scale, enhance product or geographic coverage, and generate synergies such as cost efficiencies, cross-selling opportunities, and improved market positioning.

From a PE and CFO perspective, bolt-ons are usually funded at the platform level, executed rapidly, and are designed to be operationally and financially accretive, supporting the broader buy-and-build strategy.

A build-up refers to a buy-and-build strategy in which a platform company - often backed by private equity - executes a series of acquisitions to expand its scale, market share, capabilities or geographic footprint.

From a CFO and PE perspective, a build-up strategy is typically designed to create value through consolidation, operational synergies, revenue acceleration and multiple arbitrage, ultimately enhancing the exit valuation of the combined group.

Also referred to as the debtor or account debtor, the buyer is the customer of the seller (assignor) whose invoices are financed under a factoring arrangement. It is the counterparty that purchases goods or services on credit and is responsible for settling the related trade receivables in accordance with the agreed payment terms.

A carve-out is the divestment by a company or corporate group of a business division or a defined set of assets associated with a specific line of activity.

A company’s treasury refers to its immediately available cash and liquid resources used to meet day-to-day operational expenses and short-term financial obligations. The term “treasury” also more broadly describes the function responsible for managing a company’s liquidity, funding, and short-term financial risk.

Cash flow refers to the movement of cash into and out of a business over a specific period. It reflects the company’s ability to generate cash from its operations and to manage its financing and investing activities.

Cash pooling is a treasury management structure used by corporate groups to centralise and optimise liquidity across multiple entities. It enables the aggregation of cash balances from different subsidiaries into a single notional or physical pool, allowing surplus cash to offset overdraft positions within the group.

Collections refers to the set of actions, processes and procedures undertaken to secure payment of outstanding invoices. It includes all operational efforts aimed at recovering amounts due from customers, whether through routine reminders, structured dunning processes, or more formal recovery measures where necessary.

Collective proceedings are formal legal procedures under which a financially distressed company is placed under court supervision in order to organise the orderly settlement of its liabilities. All creditors are brought together within a single framework and are prevented from pursuing individual enforcement actions, ensuring an equitable and coordinated treatment of claims.

A credit committee is the decision-making body within a financial institution responsible for approving or declining financing proposals. It assesses credit applications based on risk, exposure limits, debtor quality and overall transaction structure, and determines whether funding can be granted under the institution’s risk appetite.

Credit insurance is a financial risk mitigation tool that protects businesses against the risk of non-payment by their customers. It provides indemnification, in whole or in part, for trade receivables in the event of debtor insolvency or other defined credit events.

Beyond loss protection, credit insurance also typically includes preventive services such as ongoing credit risk assessment, buyer creditworthiness analysis and portfolio monitoring. From a CFO and receivables finance perspective, it is a key instrument for securing cash flow, supporting working capital efficiency and enabling sustainable business growth.

Credit insurance cover refers to the protection provided under a trade credit insurance policy against the risk of non-payment by a buyer. It compensates the insured business for losses arising from customer insolvency, protracted default, or other covered credit events, subject to policy terms, limits and exclusions.

A credit insurer is an insurance company that underwrites trade credit insurance policies, covering businesses against the risk of non-payment by their customers. It assumes or shares the credit risk on insured receivables, subject to agreed policy limits and conditions, and typically provides ongoing monitoring and assessment of debtor creditworthiness.

A credit limit, also referred to as a credit approval, is the maximum exposure that a factor or credit insurer is willing to underwrite in respect of a given buyer. It represents the upper limit of indemnification available in the event of the buyer’s insolvency, and therefore defines the insured or guaranteed credit risk on that counterparty.

A credit note is an accounting document issued by a seller to partially or fully cancel a previously issued invoice. It may be used to refund a customer, offset a future payment, or correct errors relating to pricing, quantity or other billing elements on the original invoice.

In a factoring context, the seller (client/assignor) must promptly notify the factor upon issuing a credit note that relates to assigned receivables, as it directly impacts the value and collectability of the funded invoices.

A customer ledger is a financial or accounting report summarising all outstanding receivables owed to a company by its customers. It provides a detailed or consolidated view of amounts due from each customer at a given point in time.

This tool is used to monitor customer balances, identify overdue payments or arrears, and support effective cash flow and collections management. From a CFO and receivables finance perspective, the customer ledger is a core dataset used for reporting, credit control, year-end closing processes, and assessing overall trade receivables exposure.

Days Sales Outstanding (DSO) is a key working capital metric that measures the average number of days it takes for a company to collect payment after issuing an invoice. It reflects the efficiency of the company’s credit control and collections processes.

Delegated credit insurance refers to a structure in which a factor or receivables finance provider relies on an external credit insurer to underwrite and manage debtor credit risk, with underwriting authority partially or fully delegated to that insurer. The policy may be arranged directly by the client or by the financier, but the credit risk assessment, approval limits and ongoing monitoring are carried out by the appointed insurer.

Disclosed factoring is a receivables finance structure in which the seller is required to include a notice of assignment (or equivalent notification) on its invoices, informing customers that the receivables have been assigned to a factor and that payments must be made directly to the factor.

An excess of loss credit insurance policy is a form of cover that provides indemnification for losses incurred above a pre-agreed deductible or retention set by the insured company.

A facility refers to a committed or uncommitted line of financing made available by a lender, factor or financial institution to a borrower. It defines the maximum amount of funding that can be drawn at any time, subject to eligibility criteria, covenants and the underlying security package.

A factor is a financial institution or specialist receivables finance provider that purchases or finances a company’s trade receivables, providing immediate liquidity in exchange for those invoices.

Factoring is a short-term financing solution that enables B2B companies to accelerate cash receipts by receiving early payment on their outstanding invoices before maturity. In practice, the company assigns its trade receivables to a factoring provider (the factor), which in return advances immediate cash, typically within 24 to 48 hours.

At invoice maturity, payments from customers (buyers) are made directly to the factor, bypassing the seller’s bank accounts. From a CFO and working capital perspective, factoring is used to optimise liquidity, reduce days sales outstanding, and support growth without increasing traditional balance sheet debt.

A factoring account is a current account maintained by the factor in its books for each client (assignor), which records all transactions relating to the assigned receivables. It is credited with the value of invoices transferred to the factor and debited with cash advances drawn by the client, as well as fees, commissions, taxes, and any amounts retained to build the reserve or guarantee fund.

A factoring broker is an intermediary who advises companies on the selection and negotiation of receivables finance solutions, acting as a structuring and placement agent between corporates and factoring providers.

The broker’s role typically includes analysing working capital needs, comparing market offerings, negotiating pricing and terms, and supporting the implementation of the most suitable factoring or invoice finance facility.

From a CFO and private equity perspective, brokers help optimise funding structures, ensure competitive market tension, and secure the most efficient combination of advance rates, fees and credit protection.

The factoring fee is typically a percentage of the turnover assigned to the factor, and less commonly an annual fixed fee. It represents the charge for services related to the management of trade receivables, including account administration and credit risk monitoring.

The fee level depends on factors such as receivables volume, debtor risk profile, and the scope of services included in the agreement (e.g. collections, credit protection, and reporting).

The financing fee represents the main cost component of a factoring or receivables finance facility. It corresponds to the interest rate applied by the factor or lender on the funds advanced against receivables.

This rate is typically variable and expressed on an annualised basis, indexed to benchmark rates such as EURIBOR (for euro-denominated facilities), SOFR (for US dollar facilities), or SONIA (for sterling facilities). It functions similarly to an overdraft facility, with interest accruing daily on the actual amounts drawn by the client.

A financing line, also referred to as a funding line or facility size, is the maximum amount of capital that a lender or factor agrees to make available to a borrower under a receivables finance, asset-based lending or credit facility agreement.

Full factoring is a comprehensive receivables finance solution that provides not only immediate funding of invoices upon issuance, but also full collections management by the factoring provider (the factor), including dunning and recovery processes, as well as credit protection against buyer insolvency.

Full factoring is an end-to-end working capital solution in which the factor effectively manages the entire accounts receivable function, combining liquidity provision, credit risk underwriting and operational receivables administration.

International Financial Reporting Standards (IFRS) are accounting standards primarily used by listed companies, as well as by businesses seeking to align with international reporting frameworks, particularly those with cross-border operations or commercial interests.

Maturity factoring is a receivables finance structure under which the factor assumes responsibility for managing the client’s accounts receivable and may provide credit protection against debtor insolvency, but does not advance funds prior to invoice maturity.

Invoices are effectively purchased from inception; however, payment to the client is only made on the contractual due date rather than upon assignment. Any funding element only arises if there is a delay between the due date and the actual receipt of payment from the debtor.

Maturity factoring is often used by companies seeking predictable cash flow timing and simplified liquidity planning without relying on early pre-financing of receivables.

Non-recourse factoring is a receivables finance structure under which the payment of assigned invoices is irrevocable, with the factor assuming the credit risk of customer insolvency.

This means the factor bears the risk of non-payment due to debtor default (subject to agreed exclusions and credit limits), thereby providing credit protection alongside funding and potentially collections services.

Off-balance sheet factoring is a receivables finance structure in which, subject to applicable accounting standards, the factor assumes substantially all risks and rewards associated with the assigned receivables, allowing the transaction to be treated as a sale rather than a financing.

In this context, amounts received from the factoring provider are recognised as consideration for the sale of receivables rather than as debt, enabling the seller to derecognise all or part of its trade receivables from the balance sheet.

Also referred to as the seller or assignor, the originator is the company that enters into a receivables finance or factoring agreement and assigns its trade receivables to the factor. It is the contractual counterparty responsible for originating the invoices that are subsequently financed under the facility.

A payment reminder is a communication sent to a customer regarding overdue invoices or upcoming payment due dates.

The premium rate refers to the pricing applied by a credit insurer for providing trade credit insurance cover, typically expressed as a percentage of insured turnover or insured receivables.

A RIBA (Ricevuta Bancaria) is an electronic payment instrument used in Italy to formalise and collect commercial receivables through the banking system. It functions as a payment request rather than a legally binding instrument or negotiable credit title.

Unlike a bill of exchange, a RIBA does not create a formal legal obligation for the debtor and cannot be endorsed or used as a credit instrument. Instead, the debtor authorises their bank to execute payment on the agreed maturity date.

RIBAs are widely used in Italian B2B transactions due to their administrative simplicity and integration into standard banking collection processes.

A receivable refers to an outstanding invoice or amount owed to a company by its customer for goods delivered or services rendered on credit. When a company extends payment terms to a customer, it holds a receivable against that customer, who remains its debtor until the obligation is settled in full.

Reconciliation is the accounting process of matching and aligning related financial entries, such as invoices and their corresponding payments, in order to confirm that records are complete, accurate and properly settled. It ensures that outstanding balances are correctly tracked and that cash receipts are appropriately allocated to the relevant receivables.

From an Anglo-Saxon accounting and CFO perspective, reconciliation is typically system-driven and highly automated within modern accounting platforms (e.g. QuickBooks, Xero, Sage), replacing the more manual “matching” or coding processes historically used in some continental European accounting systems.

Recourse factoring is a receivables finance arrangement under which the factor has the right to reassign or charge back unpaid invoices to the client. In a recourse structure, the factor does not typically assume the credit risk of customer non-payment.

Reverse factoring is a buyer-led supply chain finance solution typically used by financially strong corporates to offer their suppliers early payment in exchange for a discount or financing cost.

Under this structure, the buyer enters into a programme arranged with a factoring or finance provider, allowing approved supplier invoices validated by the buyer to be paid early by the factor, net of a financing discount. This discount generally covers the cost of the programme.

Reverse factoring enables suppliers to accelerate cash receipts while allowing the buyer to extend payment terms, thereby improving working capital efficiency. It can reduce working capital requirements, optimise net debt, and enhance operating cash flow and margins without directly impacting the buyer’s liquidity position.

Securitisation is a financing technique, similar in purpose to factoring, whereby financial assets such as trade receivables are transferred to investors through a structured capital markets transaction.

Typically, the assets are sold to a special purpose vehicle (SPV), which then issues securities backed by the underlying receivables to investors in the capital markets.

Set-off risk in factoring refers to the possibility that a debtor offsets the amount of an assigned receivable against claims it holds against the seller, such as credit notes, disputes, rebates or contractual penalties, thereby reducing the amount ultimately recoverable by the factor.