A financial service in which a firm sells its receivables to a factoring company for either: a) a predetermined percentage of the invoiced amount - so-called discount factoring; or b) periodic payments corresponding to the average maturity of the receivables, with the factor paying the firm the full value of the receivable less fees, enabling the firm to obtain regular cash flow - so-called maturity factoring. The factor acts as the principal debtor in collecting the receivables and, in a full factoring service contract, assumes responsibility for credit risk management, sales records and collection of receivables.