Home Receivables financing: what is it? Types of receivables financing agreements Balance assignment factoring

Balance assignment factoring

Balance assignment financing is a simple and efficient solution to convert your entire accounts receivable into available cash. Unlike invoice picking, which relies on assigning invoices individually, this approach allows you to finance your full receivables portfolio in a single transaction.

Definition of balance assignment factoring

Balance assignment factoring consists of assigning the overall outstanding balance of your customer receivables to a factor. This financing is based on the periodic transfer of your accounts receivable ledger (via Dailly assignments or secure electronic data flows).

The factor then analyses your receivables and typically advances 80% to 90% of the total amount, usually within 24 to 48 hours.

How does balance assignment factoring work?

Concrete example: An industrial SME with 200 employees, managing more than 300 invoices per month, can assign its entire receivables portfolio in a single operation. This enables the company to secure its cash flow on a recurring basis, without multiplying administrative processes.

Receivables transfer

You provide the factor with a complete statement of your outstanding invoices. This transfer can be done via an accounting export or through a direct connection to your ERP system.

Analysis and financing

The factor assesses your accounts receivable portfolio, applies the agreed contractual protections (with or without recourse), and releases a cash advance accordingly.

Collections management

The factor handles the monitoring and processing of customer payments.

Final settlement

Once the invoices have been collected, you receive the remaining balance, after deduction of factoring fees and financing costs.

Illustration méchanisme

What are the benefits of balance assignment financing?

Simplified management

A single bulk transfer, without having to assign invoices individually.

Improved cash flow

Access to funds within 24 to 48 hours to cover your immediate liquidity needs.

Flexibility

A transfer schedule adapted to your operating cycle.

Security

Option to include protection against non-payment through credit insurance.

Complementary solution

Balance assignment financing is often structured as an undisclosed and off-balance sheet arrangement.

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Frequently asked questions about balance assignment factoring.

What is the difference between balance assignment factoring and invoice picking?

Invoice picking finances each invoice individually, while balance assignment financing covers the entire accounts receivable portfolio in a single operation.

Which companies use balance assignment financing?

It is mainly used by mid-sized companies (SMEs+), mid-caps, and international large corporates managing a high volume of customer invoices and seeking a fast, regular, and flexible cash flow solution.

Is balance assignment financing confidential?

Yes, it can be structured as an undisclosed arrangement, meaning customers are not informed of the factor’s involvement and the company retains internal management of its accounts receivable.