Factoring or Dailly assignment: which receivables financing

Quick answer. Factoring and the Dailly assignment both turn trade receivables into immediate cash, without waiting for the due date. Factoring entrusts the receivables to a factoring company that finances, handles collection and often guarantees against unpaid invoices. The Dailly assignment (Monetary Code art. L313-23) is an assignment of professional receivables to the bank, more flexible and one-off, with no management service. The choice depends on the need for service and the cost.

When customer payment terms weigh on cash, mobilising receivables is an effective lever. Two tools dominate: factoring and the Dailly assignment. They answer the same need, turning an invoice into cash, but with different logics and costs. Here is the comparison to choose.

Factoring and the Dailly assignment start from the same principle: assign a receivable to be paid right away.

In both cases, the company does not wait for its invoice's due date: it assigns the receivable to a third party that pays the funds in advance, for a cost. The difference lies in the nature of the assignee and the associated services. Factoring rests on a specialised factoring company, the Dailly assignment on the bank, within a precise legal framework.

Mobilising receivables relieves cash without resorting to a classic loan, which complements the analysis of the self-financing capacity.

Factoring is a global scheme, going beyond financing alone.

The company entrusts its invoices to a factoring company, which advances the funds, handles collection from customers, and often guarantees against unpaid invoices under the contract. It is an outsourcing of the receivables function, useful for a company wanting to delegate management and secure collection. In return, the cost includes the factoring commission and the financing commission, and the scheme often runs over time. The detail of how it works and its cost is covered in our article on factoring for micro-enterprises and SMEs.

The Dailly assignment is a lighter banking mechanism, framed by law.

The assignment of professional receivables, called the Dailly assignment (Monetary Code art. L313-23 and following), lets the company assign one or more receivables to its bank by a slip, in exchange for financing. Unlike factoring, there is no management service or delegated collection: the company keeps control of its customer relationship. The Dailly assignment is often one-off, used case by case for specific receivables, which makes it more flexible but less complete.

The choice between factoring and the Dailly assignment depends first on the need for service. Factoring suits a company wanting to delegate receivables management and protect against unpaid invoices, at the price of a more structured scheme. The Dailly assignment suits a company wanting flexible, one-off financing, keeping control of its customer relationship.

Our approach is to start from the real need: outsourcing and protection for factoring, flexibility and controlled cost for Dailly. The total cost is compared over the period of use, not on an isolated operation. For a company with many receivables and a heavy receivables function, factoring deploys its advantages; for a targeted need, the Dailly assignment is often cheaper.

A company suffered customer payment terms that tightened its cash. For a one-off need linked to a few large invoices, the Dailly assignment allowed fast and flexible financing, without outsourcing the customer relationship. When the receivables function grew lastingly heavy, with many invoices and unpaid invoices to watch, the analysis tipped the choice towards factoring, to delegate collection and guarantee against unpaid invoices. Both tools were used according to the need of the moment, not on principle.