Account factoring is a financial transaction in which a business sells its accounts receivable (invoices) to a third party at a discounted rate. By using account factoring, businesses can gain immediate cash flow without having to wait until a customer pays the invoice. The third-party organization that buys the invoices is known as the factor. Factoring comes with some risk; the factor takes on the burden of collecting payment from customers, so if the customer refuses to pay, the factor is responsible for covering the cost. However, companies will often take this risk for the fast access to working capital it provides.