Differentiate Between Factoring And Bills Discounting?
The differences between Factoring and Bills discounting are: Factoring is called as 'Invoice Factoring’ whereas Bills discounting is known as ‘Invoice discounting.' In Factoring, the parties are known as the client, factor and debtor whereas in Bills discounting, they are known as drawer, drawee and payee. Factoring is a sort of management of book debts whereas bills discounting is a sort of borrowing from commercial banks. For factoring there is no specific Act, whereas in the case of bills discounting, the Negotiable Instruments Act is applicable.
