Assignment of receivables
The transfer of invoice ownership from the seller to the factor.
Why it matters
A valid assignment is required for the factor security interest to attach. Defects such as anti-assignment clauses in customer contracts can limit the factor rights.
How it appears in contracts
In a factoring agreement, the factor controls the remittance address specified in the notice of assignment. If a customer misdirects a remittance back to the seller, the agreement typically requires the seller to forward it to the factor immediately. Remittance matching is tracked in the factor client portal and used to calculate reserve release timing. Frequent misapplied remittances signal a notification problem that can delay the entire reserve cycle.
Related terms
Related article: UCC filing in factoring
Related reading
Sources
- Uniform Commercial Code Article 9 - Uniform Law Commission. Accessed 2026-05-19.
- Secured Finance Network - Secured Finance Network. Accessed 2026-05-19.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.