Reverse factoring
AccountingAlso called: Supply chain finance
An arrangement in which a bank pays a company’s approved supplier invoices early at a discount and the company repays the bank on the original or an extended due date.
In plain terms
The obligation has become bank funding while continuing to read as trade payables. The tell is days payable rising with no supplier friction at all — because the supplier has already been paid. The question worth asking is what happens if the bank withdraws the facility.