What are 'Accounts Receivable (A/R) Discounted'
Outstanding invoices representing money owed to a creditor which the firm/creditor sells to a buyer for less than face value, typically to quickly raise capital and improve cash flow. The buying firm  also referred to as a "factor"  purchases the financial obligation at a discounted rate providing the selling firm with immediate cash. However, the sale is undertaken without recourse, meaning that the factor assumes full responsibility for collecting the money owed in order to recoup its financial layout for the account.
BREAKING DOWN 'Accounts Receivable (A/R) Discounted'
Accounts receivables are often sold at a discount in order to mitigate the risk that the debtor will not satisfy the obligation. The discount arises because the factor assumes the underlying risk of the receivables and must be compensated for the delayed inflow of funds.
Previously only large firms that could meet minimum threshold requirements could enter into a relationship with a factoring firm (typically a large bank) to sell their receivables and obtain muchneeded cash, and often with recourse. Today, medium and smallsized firms operating in virtually all industries (i.e. IT firms, manufacturers, even hospitals) can find ways to sell their A/Rs for a discounted rate to individual factoring firms or through factoring broker intermediaries.

Factor
A financial intermediary that purchases receivables from a company. ... 
Discounting
The process of determining the present value of a payment or ... 
Present Value  PV
The current worth of a future sum of money or stream of cash ... 
1%/10 net 30
A way of providing cash discounts on purchases. It means that ... 
Cash Discount
An incentive that a seller offers to a buyer in return for paying ... 
Rate Of Return
The gain or loss on an investment over a specified period, expressed ...

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