Once the firm has sold its receivables, the factor bears all the responsibility for collecting on the account.

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When a firm sells its receivables to a factor, the factor becomes responsible for collecting on the accounts. This is known as factoring and is a common practice for businesses looking to improve their cash flow. By selling their receivables, they can receive immediate payment for their outstanding invoices, rather than waiting for their customers to pay. However, it is important to note that the factor may charge a fee for their services and may also take on the risk of non-payment by the customer.

Once the Firm Has Sold Its Receivables, the Factor Bears