f a company cannot collect its accounts receivable, it may decide to take the debtor to court over the unpaid debt, or it may outsource the debt collection activity to a third-party bill collector. These companies typically charge a set fee or a percentage of the amount they collect. In other cases, businesses sell their accounts receivable for pennies on the dollar to a factoring company that then collects the debt. Factoring companies often offer some cash up front, making them an attractive option for companies that need a boost to their working capital.
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