Posted by admin in Glossary

A charge back is money owed to the factor from the client for uncollectible accounts receivable when so stipulated in the factoring agreement. Often, a clause is added to the signed contract that defines what happens if the factor is unable to collect an account receivable; most often, the factor is entitled to a percentage of the debt though a flat fee can alternatively be stipulated. Charge backs are first deducted from the reserve, if any.

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