The Case Study On Draft Factoring Of Citic Commercial Factoring Ltd.

Since the pilot project of commercial factoring was launched in 2012,factoring industry in China has fallen on a period of rapid development,serving small and medium-sized enterprises in many fields.Factoring industry provides the seller accounts receivable account management,credit evaluation,receivable collection,factoring financing and other comprehensive financial services.And by the end of2017,the total amount of commercial factoring in China had reached above 1 trillion yuan.However,at the same time,the traditional commercial factoring business model exposed many defects and the traditional business model of commercial factoring is still young.The main reason is that there are still many deficiencies in the traditional business model of using invoices as the proof of creditor's rights,which need to be improved.However,commercial paper,as the hub of the connection between financial service institutions and the real economy,has many commonalities with commercial paper in terms of revitalizing enterprise receivables and accelerating monetary capital turnover.So in order to help commercial factoring company to seek business channels of doing business more smoothly and to protect itself from commercial disputes when it requires the buyer to perform due accounts receivable repayment obligation,this article focuses on the use of commercial acceptance drafts in the process of commercial factoring to settle accounts receivable confirmation and the difficulty of transferring commercial disputes.This paper uses literature research,case analysis and other methods to explore the unique significance of commercial paper in the business of commercial factoring companies from the characteristics of commercial paper such as causeless,liquid and negotiable securities.Through combing and summarizing literatures at home and abroad about commercial factoring financing function,the traditional mode of factoring risk and note factoring mode,the paper introduces the draft factoring in the specific process and operational rules combining the specific case.And the success of the case and the internal and external reasons were analyzed,and further summarized and Suggestions are obtained.The main body of the paper is the introduction and deep analysis of a major draft factoring case between Citic commercial factoring Ltd.and Wuhan Traditional Chinese Medicine Company.On the one hand,from the perspective of practice,the process details and operating rules of inspection in the process of the business,project establishment,project evaluation,endorsement in factoring contracts,factoring financing payment,accounts receivable transfer registration and notification,accounts receivable management and recycling would be discussed.And then on the basis of the legitimacy of the draft endorsement,the right of defense,real transaction background,this article summarizes some valuable experience and lessons brought by the draft factoring case,illuminating the commercial draft benefits factoring company by providing financing channels,free credit,and the real right of recourse,improving the quality of accounts receivable,fixing the path of accounts receivable collection,reducing the factoring workload and many other advantages.What's more,as far as the problems and incorrections the Citic Commercial Factoring Ltd.exposed in the operation of the business data review are concerned,this article further refines the risk points and matters needing attention of the draft factoring and puts forward the corresponding countermeasures for factoring industry.Commercial factoring companies in China should be far away from legal regulatory red line and pay the price in time to ensure the legitimacy of access to commercial acceptance drafts.And learning from the lessons of Citic commercial factoring Ltd.in this case,we should strengthen the review of basic contracts before business.On the other hand,from the perspective of the example,there is a statement in nowadays factoring industry,"the three"(namely three operation modes respectively,"factoring after issuing draft","issuing draft after factoring","draft discount").The paper will correct errors of its judgments on draft factoring.And positive solution is put forward in the aspect of legal,regulatory,practical operation to note the compliance of factoring business model,clarifying the difference between the draft factoring and illegal draft discount,paper assets mortgage.The article analyses commercial draft and factoring by contrast in order to show the connection between them.Furthermore,the paper will do some researches on the direction of development and innovation of factoring business model to fill in the blank of draft factoring at home and abroad,providing inspiration for legislation,regulation,policy and innovation in the factoring industry and paper industry,helping small and medium-sized enterprises to solve the difficulties in financing and accounts receivable collection difficult problem,meeting their short-term funding needs,improving the ability and professionality of financial management.Its development could be good at the sustainable promotion of the supply chain,including commercial factoring.