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.

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 ... 
Discount Rate
The interest rate charged to commercial banks and other depository ... 
Discounted Future Earnings
A method of valuation to estimate the value of a firm.

Investing
Small Business: Speed Up Receivables To Avoid A Cash Crunch
Waiting for customers to pay can be a losing game. Look to factoring for quicker cash. 
Investing
What is a Firm?
A firm is a business or organization that sells goods or services on a forprofit basis. 
Investing
Discounting With The Discount Rate
The discount rate is the interest rate you need to earn on a given amount of money today to end up with a given amount of money in the future. Let's say you need $1,000 one year from now to go ... 
Retirement
FAs Should Factor Clients Into Succession Plans
Financial advisory firms are finally taking succession planning seriously. Here's how. 
Investing
Discounted Cash Flow Analysis
Find out how analysts determine the fair value of a company with this stepbystep tutorial and learn how to evaluate an investment's attractiveness for yourself. 
Investing
Valuing Firms Using Present Value Of Free Cash Flows
When trying to evaluate a company, it always comes down to determining the value of the free cash flows and discounting them to today. 
Retirement
Financial Career Shift: Get In The Driver's Seat
Before you agree to work for another investment firm, be sure you know what you're getting into. 
Financial Advisor
10 Ways to Loosen Up Your Cash Flow
Cash flow is king. Here are a few ways to fatten it up. 
Markets
How to Improve Your Cash Flow in Manufacturing
Here are 10 ways to to improve a manufacturer's cash flow. 
Investing
Capital Budgeting: Which is Better, IRR or NPV?
Using internal rate of return and net present value for capital budgeting evaluations often end in the same result. But there are times when using NPV to discount cash flows makes more sense.

When and why should the terminal value be discounted?
Find out why investors use the terminal value, why the terminal value is discounted to the present day, and how it's related ... Read Answer >> 
What is the difference between the cost of capital and the discount rate?
Learn about the differences between the cost of capital and the discount rate as they relate to estimating a required return ... Read Answer >> 
How do I calculate free, discounted and operational cash flow in Excel?
Take a quick look at how you can calculate a company's operating cash flow, free cash flow and discounted cash flows using ... Read Answer >> 
Why would you take DCF into account rather than simply projecting future revenues?
Learn what discounted cash flow analysis is and why it is considered a better equity valuation tool than simply projecting ... Read Answer >> 
What are some common traits of undervalued stocks?
There are a few basic factors found in companies that are worth more than their current stock price. Read Answer >> 
What is the formula for calculating free cash flow?
Read about some of the formulas for free cash flow, why investors perform cash flow analysis and what a high or rising cash ... Read Answer >>