Factoring: Alternative Model of Financing
Ivanovic, Sasa, Suzana Baresa, and Sinisa Bogdan. 2011. Factoring: Alternative model of financing. UTMS Journal of Economics 2 (2): 189–206.
Preliminary communication (accepted April 2, 2011)
FACTORING: ALTERNATIVE MODEL OF FINANCING
Sasa Ivanovic1 Suzana Baresa Sinisa Bogdan
Abstract: This paper aims to present factoring as an alternative funding model. This paper also tries to scientifically explore and emphasize its economic role thorough advantages and disadvantages of such financing model, and show condition in world and Croatia. Good corporate governance and professional financial management can contribute to the establishment of such business strategy (in terms of: strategy in relation to potential risks, the systems for managing risks and monitoring, investment strategies, interventions, etc.) that will make the company resistant to unexpected and unpredictable changes in both their environment and the global marketplace and timely actions to contribute to faster recover from the effects of the crisis and business damages reduced to a minimum recovery. Key words: factoring, receivables, liquidity, solvency, financing.
INTRODUCTION Global financial crisis points out the importance of a strong corporate governance and financial management for a company that has to deal with effects of unexpected crises and uncertainties that bear future business events. Effective strategic and tactical financial decisions based on principle politics effective financial management in the field horizontal and vertical structure of capital, insurance of short-term and long-term capital, maintaining liquidity and solvency, represents a key function in the creation of competitive advantages. The subject of this paper is factoring, as well as advanced and alternative model which is offered as one possible solution for overcoming the current lack of liquidity in the company and to improve the competitiveness, although factoring has been well known in the world in Croatia
Preliminary communication (accepted April 2, 2011)
FACTORING: ALTERNATIVE MODEL OF FINANCING
Sasa Ivanovic1 Suzana Baresa Sinisa Bogdan
Abstract: This paper aims to present factoring as an alternative funding model. This paper also tries to scientifically explore and emphasize its economic role thorough advantages and disadvantages of such financing model, and show condition in world and Croatia. Good corporate governance and professional financial management can contribute to the establishment of such business strategy (in terms of: strategy in relation to potential risks, the systems for managing risks and monitoring, investment strategies, interventions, etc.) that will make the company resistant to unexpected and unpredictable changes in both their environment and the global marketplace and timely actions to contribute to faster recover from the effects of the crisis and business damages reduced to a minimum recovery. Key words: factoring, receivables, liquidity, solvency, financing.
INTRODUCTION Global financial crisis points out the importance of a strong corporate governance and financial management for a company that has to deal with effects of unexpected crises and uncertainties that bear future business events. Effective strategic and tactical financial decisions based on principle politics effective financial management in the field horizontal and vertical structure of capital, insurance of short-term and long-term capital, maintaining liquidity and solvency, represents a key function in the creation of competitive advantages. The subject of this paper is factoring, as well as advanced and alternative model which is offered as one possible solution for overcoming the current lack of liquidity in the company and to improve the competitiveness, although factoring has been well known in the world in Croatia
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