Some of the standard definitions that you will come upon in this resource are as follows:
Discounter - Company buying the debt
Factor - Company buying the debt
Client - Business selling the debt
Debtor - Party liable for paying the debt
Debt - Trade debts payable by the debtors
Discounting: The sale by a business (the client) and the purchase by the discounter of trade debts on a continuing basis. The client retains the sales accounting functions and is responsible for collection of the debts. The debtors are usually unaware of the involvement of the discounter.
Factoring: The sale by a business (the client) and the purchase by the factor of trade debts on a continuing basis. The factor will carry out some part of the sales accounting function, as agreed between the client and the factor. The debtors are aware that all the debts have been assigned to the factor, and that payment must be made to the factor to discharge the debt.
Turnover: The face value of debts purchased (including GST).
Receivables: The total amounts due from debtors at a point in time.
Net Payments: The balance of payments and charges made to clients at a given point of time.