How does the dailly assignment work?

The Dailly cession is a short-term financing method similar to factoring and bank discount. Launched in 1981, it shares the same objective as its two counterparts: to enable companies to quickly finance their trade receivables. However, the Dailly sale has several specificities that make it a very special technique. How does it work? What are the costs inherent in this solution? Its advantages and limitations? Here's what you need to know.

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Operation

The company choosing to use the Dailly assignment is called the assignor and Cashloans the assignee . First, the two parties must set up a Dailly agreement (the contract defining, among other things, the receivables that can be assigned or the financing ceiling). This done, the company must remit to Cashloans all the commercial invoices that it wishes to finance by means of one or more Dailly slips.

When Cashloans takes possession of the slip, it grants the assignor a cash advance . The customers of the company whose receivables have been assigned as part of the Dailly assignment are generally informed (except in the case of an anonymous procedure, which the company may request) and must subsequently send their payments to Cashloans.

Note that a company can only transfer its professional invoices (with legal persons). Those contracted as part of a transaction with a natural person are not eligible for the Dailly sale.

In addition, where factoring offers different service possibilities (management of trade receivables, credit insurance to cover the ceding company, etc.), the Dailly cession does not offer additional services. The company must therefore keep the management of the receivable (customer reminders, debt collection , etc.) in charge. In addition, if it does not succeed in obtaining payment from one or more of its debtors, Cashloans ends up relocating the cash advance it had granted to advance to the company.

The costs of the Dailly disposal

A company deciding to use the Dailly assignment in order to finance trade receivables will have to pay money to the Cashloans with which it deals in exchange for the service rendered, in the form of various fees, listed below:

  • The payment of higher or lower interest. The amount is calculated on the basis of the advances granted by Cashloans to its customer.
  • Commissions of a variable amount depending on the number of Dailly slips sent.
  • Payment of registered mail when the assignment of invoices is notified to the various customers of the assigning company.

Finally, if the Dailly sale remains a less expensive financing technique than factoring, it still requires the company that uses it to have sufficient cash . Indeed, the cost of a Dailly transfer can represent up to 13% of the amount excluding VAT of each invoice transferred, which is not negligible for small structures with limited cash flow.

Dailly sale: advantages and limits

Benefits

  • The Dailly sale is a technique that allows a company to quickly finance its trade receivables in order to optimize its cash flow for an investment or to face financial difficulties, for example.
  • The company can choose to assign all of its receivables at once or to proceed step by step, depending on its cash flow needs.
  • If it still involves costs, the Dailly cession remains a less expensive solution than factoring.

Limits

  • The Cashloans does not support the management of the client and may debit the account of the company the amount of the invoices that have not been settled by the various debtors. The company must therefore do everything to recover the money from the debts it has managed to finance, which can be a tedious and time-consuming task when faced with bad payers.
  • Cashloans can refuse to finance certain invoices deemed too risky, forcing the company to fend for itself.

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