A recent report put together by World Factoring Yearbook 2013 and Factors Chain International has come to light that shows the use of factoring accounts receivables has increased across the globe. The specifics of the report, which was released on October 15, 2013, state that the countries of China and Russia have seen the greatest increase of factoring receivables. Russia’s increase by volume is reported to be at 63 percent (or EUR36 billion) while China’s growth is 27.6 percent or (EUR341.3 billion). The increase of accounts receivable factoring in China is a result of a rise in demand of exporting.
While Banks Continue to Stagnate, Factoring Receivables Shows No Signs of Slowing Down
Additionally, many other European and Asian countries also saw a rise in use of invoice factoring. The United Kingdom and the United States each saw an increase of about six percent. Editor of the report Michael Bickers, stated “the overall increase in volumes show a continued demand for factoring despite the difficult economic conditions in so many markets.” Though the economy struggles to move forward in the United States and other parts of the world, accounts receivable factoring continues to grow in usage showing its strength in these uncertain times.
Invoice Factoring Companies Join Forces with Factors Chain International
In its 2012 yearend report, the Factors Chain International (FCI) put factoring receivables and factoring services as having a global factoring volume of EUR 2,015 billion or US$2,611 billion. The FCI is a global network of factoring companies who aim to facilitate international trade through factoring accounts receivables and related financial services. According to the Federation of International Trade Associations (FITA), FCI is the largest global networks of factoring companies. Approximately 50 percent of all factoring receivables transactions occur via its member companies.
The financial practice of accounts receivable factoring has been around hundreds of years though it may be new to many in business as previously it was heavily used by certain types of businesses such as those in garment and textile manufacturing. Factoring financial services are used today by several industries and remains more common in Europe and Asia than in the United States.