Notice of assignment

A notice of assignment tells an account debtor that an invoice or receivable has been assigned and payment should follow new instructions.

Key takeaways
  • The notice of assignment redirects customer payment and is a core operational document.
  • Conflicting or unclear payment instructions can slow cash application significantly.
  • Confirm who sends the notice, when, and what happens if a customer pays the wrong account.
  • The notice process should match both the agreement and the lockbox or controlled account instructions.

A notice of assignment tells the customer that payment rights have been assigned and gives new payment instructions.

The notice should match the agreement and the factor collection process. Conflicting instructions can slow cash application.

Clause example to review

Payment must be remitted only to the assigned account or lockbox until the factor releases the notice in writing.

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
  • Uniform Commercial Code Article 9 - Uniform Law Commission. Accessed 2026-05-19. Reference for secured transactions concepts including receivables and filings.
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.