an assignment of receivables

Receivables Finance And The Assignment Of Receivables

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A receivable represents money that is owed to a company and is expected to be paid in the future. Receivables finance, also known as accounts receivable financing, is a form of asset-based financing where a company leverages its outstanding receivables as collateral to secure short-term loans and obtain financing.

In case of default, the lender has a right to collect associated receivables from the company’s debtors. In brief, it is the process by which a company raises cash against its own book’s debts.

The company actually receives an amount equal to a reduced value of the pledged receivables, the age of the receivables impacting the amount of financing received. The company can get up to 90% of the amount of its receivables advanced.

This form of financing assists companies in unlocking funds that would otherwise remain tied up in accounts receivable, providing them with access to capital that is not immediately realised from outstanding debts.

FIG. 1: Accounts receivable financing operates by leveraging a company’s receivables to obtain financing.  Source: https://fhcadvisory.com/images/account-receivable-financing.jpg

Restrictions on the assignment of receivables – New legislation

Invoice  discounting  products under which a company assigns its receivables have been used by small and medium enterprises (SMEs) to raise capital. However, such products depend on the related receivables to be assignable at first.

Businesses have faced provisions that ban or restrict the assignment of receivables in commercial contracts by imposing a condition or other restrictions, which prevents them from being able to use their receivables to raise funds.

In 2015, the UK Government enacted the Small Business, Enterprise and Employment Act (SBEEA) by which raising finance on receivables is facilitated. Pursuant to this Act, regulations can be made to invalidate restrictions on the assignment of receivables in certain types of contract.

In other words, in certain circumstances, clauses which prevent assignment of a receivable in a contract between businesses is unenforceable. Especially, in its section 1(1), the Act provides that the authorised authority can, by regulations “make provision for the purpose of securing that any non-assignment of receivables term of a relevant contract:

• has no effect;
• has no effect in relation to persons of a prescribed description;
• has effect in relation to persons of a prescribed description only for such purposes as may be prescribed.”

The underlying aim is to enable SMEs to use their receivables as financing to raise capital, through the possibility of assigning such receivables to another entity.

The aforementioned regulations, which allow invalidations of such restrictions on the assignment of receivables, are contained in the Business Contract Terms (Assignment of Receivables) Regulations 2018, which will apply to any term in a contract entered into force on or after 31 December 2018.

By virtue of its section 2(1) “Subject to regulations 3 and 4, a term in a contract has no effect to the extent that it prohibits or imposes a condition, or other restriction, on the assignment of a receivable arising under that contract or any other contract between the same parties.”

Such regulations apply to contracts for the supply of goods, services or intangible assets under which the supplier is entitled to be paid money. However, there are several exclusions to this rule.

In section 3, an exception exists where the supplier is a large enterprise or a special purpose vehicle (SPV). In section 4, there are listed exclusions for various contracts such as “for, or entered into in connection with, prescribed financial services”, contracts “where one or more of the parties to the contract is acting for purposes which are outside a trade, business or profession” or contracts “where none of the parties to the contract has entered into it in the course of carrying on a business in the United Kingdom”. Also, specific exclusions relate to contracts in energy, land, share purchase and business purchase.

Effects of the 2018 Regulations

As mentioned above, any contract terms that prevent, set conditions for, or place restrictions on transferring a receivable are considered invalid and cannot be legally enforced.

In light of this, the assignment of the right to be paid under a contract for the supply of goods (receivables) cannot be restricted or prohibited. However, parties are not prevented from restricting other contracts rights.

Non-assignment clauses can have varying forms. Such clauses are covered by the regulations when terms prevent the assignee from determining the validity or value of the receivable or their ability to enforce it.

Overall, these legislations have had an important impact for businesses involved in the financing of receivables, by facilitating such processes for SMEs.

Digital platforms and fintech solutions: The assignment of receivables has been significantly impacted by the digitisation of financial services. Fintech platforms and online marketplaces have been developed to make the financing and assignment of receivables easier.

These platforms employ tech to assess debtor creditworthiness and provide efficient investor and seller matching, including data analytics and artificial intelligence. They provide businesses more autonomy, transparency, and access to a wider range of possible investors.

Securitisation is an essential part of receivables financing. Asset-backed securities (ABS), a type of financial instrument made up of receivables, are then sold to investors.

Businesses are able to turn their receivables into fast cash by transferring the credit risk and cash flow rights to investors. Investors gain from diversification and potentially greater yields through securitisation, while businesses profit from increased liquidity and risk-reduction capabilities.

References:

https://www.tradefinanceglobal.com/finance-products/accounts-receivables-finance/  – 28/10/2018

https://www.legislation.gov.uk/ukpga/2015/26/section/1/enacted  – 28/10/2018

https://www.legislation.gov.uk/ukdsi/2018/9780111171080  – 28/10/2018

https://www.bis.org/publ/bppdf/bispap117.pdf  – Accessed 14/06/2023

https://www.investopedia.com/terms/a/asset-backedsecurity.asp  – Accessed 14/06/2023

https://www.imf.org/external/pubs/ft/fandd/2008/09/pdf/basics.pdf  – Accessed 14/06/2023

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Assignment of receivables: how to generate cash flow with unpaid invoices

Assigning your accounts receivable to a third party is part of a group of short-term financing options for small businesses. If your customer payment terms are relatively long, you’re often caught short on the cash you need to pay suppliers and staff, or invest in exciting opportunities that arise. 

So the ability to turn unpaid invoices into liquid funds can be very appealing. 

But the process isn’t exactly simple, and many SMBs don’t know what’s involved. So here’s a brief guide to everything you need to know about the assignment of receivables.

Assignment of accounts receivable: definition

The assignment of accounts receivable is a fiscal mechanism by which a creditor (the “assignor”) transfers the rights over an invoice to a third party (the “assignee”) in exchange for a short term loan. 

Here’s an example: suppose a customer owes you a sum of money, due in two months’ time. You can assign that debt to another company as collateral for money up front (a loan). If you fail to repay the loan in time, the other company will then collect payment from the customer in due course. 

The costs can vary, but you can expect to pay interest and some form of processing fees along the way. Obviously, the sooner you repay, the less you’ll pay in the long run. 

Why opt for assignment of receivables? 

This is a strategic tool to optimise working capital and keep your business humming along.  Tangibly, the assignment of receivables puts more cash in your accounts today . This helps you keep up with payments and maintain better relations with your suppliers .

Companies can use assignment of receivables to meet their cash flow needs . It can therefore be useful in a number of contexts:

• Cash management : Assignment of receivables allows you to convert your invoices into immediate cash. You improve your cash flow and meet your short-term financing needs.
• Reducing credit risk : Any credit risk transfers to the assignee. This protects you against the risks associated with unreliable buyers or uncertain economic situations. Of course, the assignee is unlikely to assume too much risk, so this isn’t a sustainable or scalable way to bring down major credit risks.
• Financing and refinancing : Assignment of receivables can be used as a means of financing, enabling you to obtain funds to invest in new projects, cover expenses or repay existing debts.
• Outsourcing receivables management : Invoice administration can be complex and time-consuming. By assigning your receivables, you can outsource the management of collections and payments to the assignee, allowing you to concentrate on your core business.
• Mergers and acquisitions : As part of a company takeover, the assignment of receivables can facilitate the consolidation of financial operations and simplify the transition of commercial relations between the parties involved.

There are potential downsides, even if they’re relatively few: 

• Paying fees and/or interest means that you take home a smaller portion of what the customer owes you . But having the money in your pocket is often more important. 
• You’re involving a third party in your customer relationships , which could potentially become awkward. 
• It can be administratively complex and a slower process than you’d like. We’ll explore some ways to make it more efficient shortly. 

Despite these drawbacks, assigning receivables is often a very attractive option where you’ve done the hard work to sign customers and have real assets (invoices), but don’t have the cash you need.  

Technical requirements for assignments

To be valid, the assignment must be in a written document including certain information : 

• Identification of the parties 
• Nature of the claim
• Amount assigned
• Payment terms and conditions
• Notification to the debtor so that the assignment can be enforced (if necessary)

To get a little more legal , the assigned claim must also meet the following criteria:

• Certain: The claim must not be disputed
• Liquid: It must be quantified or quantifiable
• Due and payable: It must be due and payable on demand
• The debtor must be informed of the assignment by the assignor or the assignee, by registered letter with acknowledgement of receipt, bailiff's deed, or any other means proving receipt.
• Clauses prohibiting further assignments
• Automatic termination clauses
• Forfeiture in the event of assignment

The specific rules may vary from one country to another. Certain claims may be excluded from assignment , in particular those that are linked to the private people or to a particular relationship between the parties, such as alimony, civil or military pensions and wages. 

Legal or contractual restrictions may also limit the possibility of assigning a claim.

Who’s involved in the assignment of receivables?

The main players in the assignment of receivables are:

• The assignor : The company transferring the receivable, whether it is a commercial, industrial or service company.
• The assignee : The party acquiring the receivable, such as a bank or a factoring company. The assignee collects the sums due and assumes the risks of the debtor's insolvency if the assignor can’t repay their loan.
• The assigned debtor : The customer of the assigning company, who must pay its debt to the assignee.

What does an assignment of receivables entail?

The exact implications of an assignment of receivables will vary depending on the jurisdiction, applicable laws, and the agreement you reach. You are strongly advised to seek the advice of a legal professional for advice tailored to your particular situation. An expert will be able to guide you through the laws and regulations in force in your country and help you understand the specific implications of the assignment of receivables.

However, here is a list of common implications:

• Transfer of rights and obligations : The rights attached to the claim are transferred to the assignee, including the right to sue the debtor in the event of non-payment. The assignee may also acquire the obligations associated with the claim, such as the obligation to comply with the agreed repayment terms.
• Notification to the debtor : The assignor is generally required to notify the debtor (the customer) of the assignment of claims, informing them of the change of creditor and obliging them to make payments to the assignee rather than the assignor. The customer may be required to consent to the assignment of claims, depending on the applicable legislation.
• Payment to the assignee : The debtor must make payments to the acquiring company in accordance with the agreed terms. The latter has the right to claim and receive payments relating to the assigned receivable.
• Risks and guarantees : The assignee must assess the risks associated with the receivable before accepting the assignment, including the debtor's solvency and the existence of guarantees or sureties associated with the receivable.

Assignment of receivables vs factoring

While similar, the assignment of receivables is slightly different from factoring . Invoice factoring also involves assigning receivables to a third party, but in that case you essentially sell these assets rather than use them as collateral. A factor will buy a portfolio of invoices from you and take over the collection process from there. 

In both cases you get money now for customer debts that will come due later. The key differences are in the terms and the amount of credit you hand over. 

The assignment of receivables is a strategic tool for optimizing financial management and securing your commercial transactions . It allows the creditor to offload the collection of a debt or to mobilize funds, while offering the assignee the opportunity to acquire receivables at a lower cost and to diversify its portfolio. 

Ultimately, this helps you to keep up your payments and maintain better relations with your suppliers. 

Defacto, a less burdensome, simpler and more flexible alternative

Defacto offers an interesting alternative to the often complicated, legally-intense process described above. We offer short-term loans, using outstanding invoices as proof of your ability to honor them. 

Defacto financing is fast, flexible, and far more affordable than traditional invoice factoring or receivables-based loans. You choose which receivables you want to use to raise funds, and avoid the restrictive rules often imposed by other mechanisms.

In as little as 27 seconds, you can get the funds you need to help you business grow and thrive. See how easy it is here . 

Ready to grow on your own terms?

Every business needs financing, and we’re set on making it simple and fair for all businesses to access it.

• Receivables
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• Credit Terms
• Cash Discount on Sales
• Accounting for Bad Debts
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• Assignment of Accounts Receivable
• Factoring of Accounts Receivable

Assignment of accounts receivable is an agreement in which a business assigns its accounts receivable to a financing company in return for a loan. It is a way to finance cash flows for a business that otherwise finds it difficult to secure a loan, because the assigned receivables serve as collateral for the loan received.

By assignment of accounts receivable, the lender i.e. the financing company has the right to collect the receivables if the borrowing company i.e. actual owner of the receivables, fails to repay the loan in time. The financing company also receives finance charges / interest and service charges.

It is important to note that the receivables are not actually sold under an assignment agreement. If the ownership of the receivables is actually transferred, the agreement would be for sale / factoring of accounts receivable . Usually, the borrowing company would itself collect the assigned receivables and remit the loan amount as per agreement. It is only when the borrower fails to pay as per agreement, that the lender gets a right to collect the assigned receivables on its own.

The assignment of accounts receivable may be general or specific. A general assignment of accounts receivable entitles the lender to proceed to collect any accounts receivable of the borrowing company whereas in case of specific assignment of accounts receivable, the lender is only entitled to collect the accounts receivable specifically assigned to the lender.

The following example shows how to record transactions related to assignment of accounts receivable via journal entries:

On March 1, 20X6, Company A borrowed $50,000 from a bank and signed a 12% one month note payable. The bank charged 1% initial fee. Company A assigned $73,000 of its accounts receivable to the bank as a security. During March 20X6, the company collected $70,000 of the assigned accounts receivable and paid the principle and interest on note payable to the bank on April 1. $3,000 of the sales were returned by the customers.

Record the necessary journal entries by Company A.

Journal Entries on March 1

Initial fee = 0.01 × 50,000 = 500

Cash received = 50,000 – 500 = 49,500

The accounts receivable don't actually change ownership. But they may be to transferred to another account as shown the following journal entry. The impact on the balance sheet is only related to presentation, so this journal entry may not actually be passed. Usually, the fact that accounts receivable have been assigned, is stated in the notes to the financial statements.

Journal Entries on April 1

Interest expense = 50,000 × 12%/12 = 500

by Irfanullah Jan, ACCA and last modified on Oct 29, 2020

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The Difference Between Assignment of Receivables & Factoring of Receivables

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You can raise cash fast by assigning your business accounts receivables or factoring your receivables. Assigning and factoring accounts receivables are popular because they provide off-balance sheet financing. The transaction normally does not appear in your financial statements and your customers may never know their accounts were assigned or factored. However, the differences between assigning and factoring receivables can impact your future cash flows and profits.

How Receivables Assignment Works

Assigning your accounts receivables means that you use them as collateral for a secured loan. The financial institution, such as a bank or loan company, analyzes the accounts receivable aging report. For each invoice that qualifies, you will likely receive 70 to 90 percent of the outstanding balance in cash, according to All Business . Depending on the lender, you may have to assign all your receivables or specific receivables to secure the loan. Once you have repaid the loan, you can use the accounts as collateral for a new loan.

Assignment Strengths and Weaknesses

Using your receivables as collateral lets you retain ownership of the accounts as long as you make your payments on time, says Accounting Coach. Since the lender deals directly with you, your customers never know that you have borrowed against their outstanding accounts. However, lenders charge high fees and interest on an assignment of accounts receivable loan. A loan made with recourse means that you still are responsible for repaying the loan if your customer defaults on their payments. You will lose ownership of your accounts if you do not repay the loan per the agreement terms.

How Factoring Receivables Works

When you factor your accounts receivable, you sell them to a financial institution or a company that specializes in purchasing accounts receivables. The factor analyzes your accounts receivable aging report to see which accounts meet their purchase criteria. Some factors will not purchase receivables that are delinquent 45 days or longer. Factors pay anywhere from 65 percent to 90 percent of an invoice’s value. Once you factor an account, the factor takes ownership of the invoices.

Factoring Strengths and Weaknesses

Factoring your accounts receivables gives you instant cash and puts the burden of collecting payment from slow or non-paying customers on the factor. If you sell the accounts without recourse, the factor cannot look to you for payment should your former customers default on the payments. On the other hand, factoring your receivables could result in your losing customers if they assume you sold their accounts because of financial problems. In addition, factoring receivables is expensive. Factors charge high fees and may retain recourse rights while paying you a fraction of your receivables' full value.

• All Business: The Difference Between Factoring and Accounts Receivable Financing

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What is the purpose of assigning accounts receivable?

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

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Author: Harold Averkamp, CPA, MBA

The purpose of assigning accounts receivable is to provide collateral in order to obtain a loan.

To illustrate, let’s assume that a corporation receives a special order from a new customer whose credit rating is superb. However, the customer pays for its purchases 90 days after it receives the goods. The corporation does not have sufficient money to purchase the raw materials, pay for the labor, and then wait 90 days to collect the receivable. The corporation’s bank or a finance company may lend 80% of the receivable but insists that the receivable be assigned to them as collateral for the loan.

Assigning a specific account receivable usually results in recording the receivable in a separate general ledger account such as Accounts Receivable Assigned. Some lenders require that the corporation’s customer be notified of the assignment and that the customer must remit the receivable amount directly to the bank.

Instead of assigning a specific receivable, the lender may require the corporation to assign all of its receivable as collateral for a loan.

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Assignment of Accounts Receivable: Definition, Benefits, and Emerging Trends

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What is assignment of accounts receivable, how does assignment of accounts receivable work, what are some special considerations for assignment of accounts receivable, emerging trends in assignment of accounts receivable, fintech solutions.

• Access to immediate cash flow
• Allows businesses to leverage their accounts receivable
• May be available to companies with limited credit history or poor credit
• Provides an alternative financing option when traditional loans are not available
• Helps businesses manage cash flow fluctuations
• Higher cost compared to traditional financing options
• Interest rates and service charges can be substantial
• May indicate financial distress to stakeholders
• Loss of control over customer relationships and collections process
• Defaulting on the loan can result in loss of assets

Frequently asked questions

How does assignment of accounts receivable differ from factoring, can any business use assignment of accounts receivable, what happens if a customer defaults on payment, is assignment of accounts receivable a sign of financial distress, what are the eligibility criteria for assignment of accounts receivable, how does assignment of accounts receivable affect financial statements, are there any alternatives to assignment of accounts receivable, how can businesses mitigate the risks associated with assignment of accounts receivable, key takeaways.

• Assignment of accounts receivable allows businesses to access immediate cash flow by leveraging their outstanding invoices.
• While it provides an alternative financing option, it can be costly compared to traditional loans.
• Fintech companies are transforming the accounts receivable financing market with innovative digital solutions.
• Businesses should carefully evaluate the terms and implications of assigning their accounts receivable before entering into agreements with lenders.

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Assignment of Accounts Receivable

The financial accounting term assignment of accounts receivable refers to the process whereby a company borrows cash from a lender, and uses the receivable as collateral on the loan. When accounts receivable is assigned, the terms of the agreement should be noted in the company's financial statements.

Explanation

In the normal course of business, customers are constantly making purchases on credit and remitting payments. Transferring receivables to another party allows companies to reduce the sales to cash revenue cycle time. Also known as pledging, assignment of accounts receivable is one of two ways companies dispose of receivables, the other being factoring.

The assignment process involves an agreement with a lending institution, and the creation of a promissory note that pledges a portion of the company's accounts receivable as collateral on the loan. If the company does not fulfill its obligation under the agreement, the lender has a right to collect the receivables. There are two ways this can be accomplished:

General Assignment : a portion of, or all, receivables owned by the company are pledged as collateral. The only transaction recorded by the company is a credit to cash and a debit to notes payable. If material, the terms of the agreement should also appear in the notes to the company's financial statements.

Specific Assignment : the lender and borrower enter into an agreement that identifies specific accounts to be used as collateral. The two parties will also outline who will attempt to collect the receivable, and whether or not the debtor will be notified.

In the case of specific assignment, if the company and lender agree the lending institution will collect the receivables, the debtor will be instructed to remit payment directly to the lender.

The journal entries for general assignments are fairly straightforward. In the example below, Company A records the receipt of a $100,000 loan collateralized using accounts receivable, and the creation of notes payable for $100,000.

In specific assignments, the entries are more complex since the receivable includes accounts that are explicitly identified. In this case, Company A has pledged $200,000 of accounts in exchange for a loan of $100,000.

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Assignment of receivables – what is it and how does it work?

What is an assignment of receivables.

Whenever we begin to explore a previously unfamiliar topic, there are important terms, without which understanding the whole issue is severely hampered, if not impossible. This is no different.

The dictionary meaning of the word assignment is the relinquishment of part or all of an individual’s rights to another person. In a situation where we have a right to a claim (for example, we are awaiting payment of an obligation from a counterparty), we can relinquish the right to the claim by giving it to a third party – the buyer of the claim. To this end, we enter into a contract of sale, donation, exchange or any other agreement with which the transfer of rights is clear.

Art. 509 of the Civil Code specifies that a creditor may transfer a claim to a third party even without the consent of the debtor – unless this would be contrary to the law, a contractual stipulation or the nature of the obligation. This means that the sale of receivables can – under certain conditions – take place without involving the debtor in the process. We will return to this later in the article.

In a possible contract of assignment of claims, the parties are: the assignor – otherwise known as the creditor, i.e. the person who relinquishes rights to the claim to another entity, and the assignee – the buyer of the claim.

In Art. 509 §2 of the Civil Code reads that the purchaser, when deciding to purchase a receivable, also gains the right to claim overdue interest and any other rights arising from the purchased receivable.

How does the process of assigning receivables work?

The entire process of transferring claims can be encapsulated in several steps. Here is a description of a sample assignment:

Emergence of claims

First, the situation from which the claim arises must arise. In our example, Mr. Arkadiusz, who runs a sole proprietorship, invoiced his contractor, Mr. Jack, for a service rendered – servicing dozens of company computers. The payment term for this invoice is 60 days. With the issuance of the document, a claim is created, which Mr. Arkadiusz can assign to an entity or a third party.

Preparing to enter into an assignment of receivables

Further down the line, it may turn out that – although Mr. Arkadiusz’s company has issued an invoice with a 60-day payment deadline – it cannot afford to wait until the due date. Business practice in Poland, moreover, shows that more than half of entrepreneurs pay their invoices late, which could mean that Mr. Arkadiusz will wait not 60 days, but even longer, for payment.

As a result, the entrepreneur decides to assign the claim to another entity. That’s how – in a nutshell – invoice financing works at PragmaGO.

Mr. Arkadiusz finds a company that decides to purchase the claim from him. In this situation, Mr. Arkadiusz becomes the assignor , while the buyer of the claim becomes the assignee . The parties then agree on the details, such as the form and term of payment or the type of agreement (it can be a written agreement or even a notarial deed – a debt transfer should not be implemented on the basis of an oral agreement).

Contacting the debtor

The next step should be to inform the debtor of the assignment. Although in most cases we don’t need permission to execute an assignment, the debtor must be aware that there has been a transfer of the claim – if only because he should make payments to the new bank account number.

Lack of clear information may result in the debtor paying the previous creditor. This will only lengthen the path the receivable must take.

In a situation where a creditor has notified the debtor that an assignment has taken place, and the debtor nevertheless makes a transfer to the wrong account (for example, to the account of a previous creditor), the current creditor may demand payment from the debtor. This is mentioned in Art. 512 KC:

As long as the transferor has not notified the debtor of the transfer, performance to the previous creditor has effect against the transferee, unless the debtor knew of the transfer at the time of performance. This provision shall apply mutatis mutandis to other legal transactions between the debtor and the previous creditor.

Transfer of receivables

Finally, there is an assignment of receivables, in accordance with the terms of the agreement between the assignor and assignee. This agreement should state what type of receivables the assignment concerns, as well as the value of the assignment and the due date.

When can an assignment be invalid?

There are several situations in which it is impossible to make an assignment of claims under penalty of invalidity:

• When the parties to a transaction have indicated in the contract between them that the claim and the rights arising from it cannot be transferred to another person or entity – this is called an exclusion of the transfer of the claim.
• When the parties to the transaction establish restrictions on the transfer of claims in the contract and these provisions are broken.
• When the assignment opposes the nature of the obligation. This applies to situations where it matters to whom the debtor owes money (e.g., in the case of alimony payments, claims for pension rights, claims for protection of property), as well as when the purpose of the claim can only be achieved if the performance is fulfilled personally to the creditor (this applies to parts of contracts of mandate, contracts of work, leases and rental agreements).

Assignment of receivables orally – is it possible?

In theory, drafting an assignment agreement in writing is not necessary. It can even be concluded verbally, but in the vast majority of cases Art. 511 of the Civil Code, which states that “if a claim is stated in writing, the transfer of that claim should also be stated in writing.”

Moreover, the written form of the assignment significantly facilitates the resolution of any disputes. Even the above-cited Art. 511 of the Civil Code, however, does not preclude the possibility of an assignment based on an oral agreement. This is evidenced by the Supreme Court Judgment of dn. 8.02.2002 r. (ref. II CKN 1160/99), which reads:

The provision of Art. 511 of the Civil Code does not provide for the rigor of nullity if the transfer is made without the requirement of written form. In such a situation, according to Art. 74 § 1 of the Civil Code, failure to observe the written form stipulated in Art. 511 of the Civil Code does not result in the invalidity of the transfer agreement, but only in certain statutory limitations of evidence.

Assignment notarized – when is it mandatory?

Notarization of the assignment of receivables can not only be an additional safeguard against possible problems with the enforcement of the assignment provisions, but also an obligation.

If the creditor has taken legal action against the debtor for an unpaid debt, won the case, and an enforceability clause was imposed on the court judgment or payment order before the assignment was made , the transfer of the claim must be notarized.

Only in this way will the current owner of the claim be able to refer the case to the bailiff without hindrance. If the parties to the assignment decided to enter into it without a notarial deed, the creditor would have no recourse to an already issued judgment or order for payment – after all, all the court documents would refer to a different entity or person.

Assignment of receivables vs. factoring

The concepts of assignment of receivables and factoring are largely intertwined. Factoring service usually boils down to invoice financing, that is, just selling receivables to a factoring company for a certain price. Factoring allows you to regain or strengthen your company’s liquidity, since most of the amount arising from the receivables (up to 90%) is received immediately.

The permanent factoring service at PragmaGO involves compiling a list of contractors with whom we work and to whom we issue sales documents regularly and sending them to the factor. As a result, our company will receive transfers for invoices directly from the factoring company as soon as the sales document is issued.

In many factoring companies, it is possible to buy back a single invoice. All you have to do is apply online and then wait a few hours for the funds to be transferred. Each time you use a factoring service, you may actually be making an assignment of receivables. In this arrangement, the factor can also be called the assignee, while the factor becomes the de facto assignor.

PragmaGO’s factoring, however, comes in three forms: single invoice redemption , permanent online factoring , and financing for company purchases . Depending on the type of factoring chosen (and, consequently, the contract drawn up), the financial liability arrangements for the debtor’s insolvency may vary.

So what are the differences between assignment and factoring?

While carrying out an assignment of receivables makes a simple, one-time exchange, using factoring allows you to opt for a range of additional services.

One of the additional services available in factoring, is the possibility of insuring receivables in case of debtor insolvency. Insurance can cover part or all of the amount.

Another service that we can choose on occasion, as it were, is monitoring of receivables – popular especially among small companies that do not have their own accounting department. The factoring company can also verify foreign counterparties at the request of the factor and assess their solvency and payment discipline.

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Assignment of Accounts Receivable – Trap for the Unwary

By  Steven A. Jacobson

Most businesses are familiar with the mechanics of an assignment of accounts receivable. A party seeking capital assigns its accounts receivable to a financing or factoring company that advances that party a stipulated percentage of the face amount of the receivables.

The factoring company, in turn, sends a notice of assignment of accounts receivable to the party obligated to pay the factoring company’s assignee, i.e. the account debtor. While fairly straightforward, this three-party arrangement has one potential trap for account debtors.

Most account debtors know that once they receive a notice of assignment of accounts receivable, they are obligated to commence payments to the factoring company. Continued payments to the assignee do not relieve the account debtor from its obligation to pay the factoring company.

It is not uncommon for a notice of assignment of accounts receivable to contain seemingly innocuous and boilerplate language along the following lines:

Please make the proper notations on your ledger and acknowledge this letter and that invoices are not subject to any claims or defenses you may have against the assignee.

Typically, the notice of assignment of accounts receivable is directed to an accounting department and is signed, acknowledged and returned to the factoring company without consideration of the waiver of defenses languages.

Even though a party may have a valid defense to payment to its assignee, it still must pay the face amount of the receivable to the factoring company if it has signed a waiver. In many cases, this will result in a party paying twice – once to the factoring company and once to have, for example, shoddy workmanship repaired or defective goods replaced. Despite the harsh result caused by an oftentimes inadvertent waiver agreement, the Uniform Commercial Code validates these provisions with limited exceptions. Accordingly, some procedures should be put in place to require a review of any notice of assignment of accounts receivable to make sure that an account debtor preserves its rights and defenses.

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What Is Accounts Receivable Financing? Definition and Structuring

Investopedia / Candra Huff

What Is Accounts Receivable Financing?

Accounts receivable (AR) financing is a type of financing arrangement in which a company receives financing capital related to a portion of its accounts receivable. Accounts receivable financing agreements can be structured in multiple ways usually with the basis as either an asset sale or a loan.

Understanding Accounts Receivable Financing

Accounts receivable financing is an agreement that involves capital principal in relation to a company’s accounts receivables. Accounts receivable are assets equal to the outstanding balances of invoices billed to customers but not yet paid. Accounts receivables are reported on a company’s balance sheet as an asset, usually a current asset with invoice payment required within one year.

Accounts receivable are one type of liquid asset considered when identifying and calculating a company’s quick ratio which analyzes its most liquid assets:

Quick Ratio = (Cash Equivalents + Marketable Securities + Accounts Receivable Due within One Year) / Current Liabilities

As such, both internally and externally, accounts receivable are considered highly liquid assets which translate to theoretical value for lenders and financiers. Many companies may see accounts receivable as a burden since the assets are expected to be paid but require collections and can’t be converted to cash immediately. As such, the business of accounts receivable financing is rapidly evolving because of these liquidity and business issues. Moreover, external financiers have stepped in to meet this need.

The process of accounts receivable financing is often known as factoring and the companies that focus on it may be called factoring companies. The best factoring companies will usually focus substantially on the business of accounts receivable financing but factoring in general may be a product of any financier. Financiers may be willing to structure accounts receivable financing agreements in different ways with a variety of different potential provisions.​

Key Takeaways

• Accounts receivable financing provides financing capital in relation to a portion of a company’s accounts receivable.
• Accounts receivable financing deals are usually structured as either asset sales or loans.
• Many accounts receivable financing companies link directly with a company’s accounts receivable records to provide fast and easy capital for accounts receivable balances.

Accounts receivable financing is becoming more common with the development and integrations of new technologies that help to link business accounts receivable records to accounts receivable financing platforms. In general, accounts receivable financing may be slightly easier for a business to obtain than other types of capital financing. This can be especially true for small businesses that easily meet accounts receivable financing criteria or for large businesses that can easily integrate technology solutions.

Overall, there are a few broad types of accounts receivable financing structures.

Asset Sales

Accounts receivable financing is typically structured as an asset sale. In this type of agreement, a company sells accounts receivable to a financier. This method can be similar to selling off portions of loans often done by banks.

A business receives capital as a cash asset replacing the value of the accounts receivable on the balance sheet. A business may also need to take a write-off for any unfinanced balances which would vary depending on the principal to value ratio agreed on in the deal.

Depending on the terms, a financier may pay up to 90% of the value of outstanding invoices. This type of financing may also be done by linking accounts receivable records with an accounts receivable financier. Most factoring company platforms are compatible with popular small business bookkeeping systems such as Quickbooks. Linking through technology helps to create convenience for a business, allowing them to potentially sell individual invoices as they are booked, receiving immediate capital from a factoring platform.

With asset sales, the financier takes over the accounts receivable invoices and takes responsibility for collections. In some cases, the financier may also provide cash debits retroactively if invoices are fully collected.

Most factoring companies will not be looking to buy defaulted receivables, rather focusing on short-term receivables. Overall, buying the assets from a company transfers the default risk  associated with the accounts receivables to the financing company, which factoring companies seek to minimize.

In asset sale structuring, factoring companies make money on the principal to value spread. Factoring companies also charge fees which make factoring more profitable to the financier.

BlueVine is one of the leading factoring companies in the accounts receivable financing business. They offer several financing options related to accounts receivable including asset sales. The company can connect to multiple accounting software programs including QuickBooks, Xero, and Freshbooks. For asset sales, they pay approximately 90% of a receivables value and will pay the rest minus fees once an invoice has been paid in full. 

Accounts receivable financing can also be structured as a loan agreement. Loans can be structured in various ways based on the financier. One of the biggest advantages of a loan is that accounts receivable are not sold. A company just gets an advance based on accounts receivable balances. Loans may be unsecured or secured with invoices as collateral. With an accounts receivable loan , a business must repay.

Companies like Fundbox , offer accounts receivable loans and lines of credit based on accounts receivable balances. If approved, Fundbox can advance 100% of an accounts receivable balance. A business must then repay the balance over time, usually with some interest and fees.

Accounts receivable lending companies also benefit from the advantage of system linking. Linking to a companies accounts receivable records through systems such as QuickBooks, Xero, and Freshbooks, can allow for immediate advances against individual invoices or management of line of credit limits overall.

Factoring companies take several elements into consideration when determining whether to onboard a company onto its factoring platform. Furthermore, the terms of each deal and how much is offered in relation to accounts receivable balances will vary.

Accounts receivables owed by large companies or corporations may be more valuable than invoices owed by small companies or individuals. Similarly, newer invoices are usually preferred over older invoices. Typically, the age of receivables will heavily influence the terms of a financing agreement with shorter term receivables leading to better terms and longer term or delinquent receivables potentially leading to lower financing amounts and lower principal to value ratios.

Accounts receivable financing allows companies to get instant access to cash without jumping through hoops or dealing with long waits associated with getting a business  loan . When a company uses its accounts receivables for asset sales it does not have to worry about repayment schedules. When a company sells its accounts receivables it also does not have to worry about accounts receivable collections. When a company receives a factoring loan, it may be able to obtain 100% of the value immediately.

Although accounts receivable financing offers a number of diverse advantages, it also can carry a negative connotation. In particular, accounts receivable financing can cost more than financing through traditional lenders, especially for companies perceived to have poor credit. Businesses may lose money from the spread paid for accounts receivables in an asset sale. With a loan structure, the interest expense may be high or may be much more than discounts or default write-offs would amount to.

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United Nations Convention on the Assignment of Receivables in International Trade (New York, 2001)

Date of adoption: 12 December 2001

The purpose of the Convention is to promote the movement of goods and services across national borders by facilitating increased access to lower-cost credit.

Why is it relevant?

The transactions covered by the Convention (e.g. asset-based lending, factoring, forfaiting, securitization, project financing) are fundamental for the financing of international trade. Yet uncertainty as to the content and choice of legal regime applicable to the assignment of receivables constitutes an obstacle to international trade. As a result, an assignment of future receivables or a bulk assignment of receivables that are not identified individually may be ineffective. In addition, an assignment that is effective according to the law under which it was concluded, may not be enforceable as against the debtor in another country or be subordinated to the rights of competing claimants in another country. Moreover, the law applicable to conflicts of priority among competing claimants may be difficult to determine. This means that either credit is not available on the basis of receivables (e.g. the claim for the payment of the purchase price in a contract for the sale of goods) or credit is available but only to those that may be able to afford its cost; and lack of sufficient access to credit or high cost of credit is a disadvantage in particular for small- and medium-size enterprises.

Key provisions

The Convention removes legal obstacles to receivables financing transactions, inter alia, by: (a) validating assignments of future receivables and bulk assignments, and by partially invalidating contractual limitations to the assignment of receivables); (b) enhancing certainty with respect to a number of issues, such as the effectiveness of an assignment as between the assignor and the assignee and as against the debtor; (c) clarifying the law applicable to key issues, such as the priority between competing claims; and (d) providing a substantive law regime governing priority between competing claims that States may adopt on an optional basis.

Relation to private international law and existing domestic law

The Convention applies only to international assignments of receivables and to the assignment of international receivables (with the exception of "financial" receivables). However, the Convention may affect a domestic assignment of a domestic receivable if: (a) it is in conflict with an international assignment of the same receivable; or (b) if it is one in a series of subsequent assignments, one of which, falls within the scope of the Convention. For the debtor, related provisions of the Convention to apply, at the time of the conclusion of the contract from which the assigned receivables arise, the debtor has to be located in a Contracting State or the law governing the assigned receivables has to be the law of a Contracting State.

Additional information

The Convention contains an optional part with applicable law rules and another optional part with substantive rules dealing with the third-party effectiveness and priority of an assignment of receivables.

The Convention is accompanied by an explanatory note. There is also an-article-by-article commentary on the draft Convention that was before the Commission at its 34 th session in 2001.

Additional Resources

• Text - Explanatory note
• UNCITRAL Legislative Guide on Secured Transactions: Supplement on Security Rights in Intellectual Property (2010)
• UNCITRAL Legislative Guide on Secured Transactions (2007)
• United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980)
• General Assembly resolution 56/81

Travaux préparatoires

• Endorsement by American Bar Association (ABA)
• Endorsement by International Chamber of Commerce (ICC)
• A/48/17(SUPP)
• A/CN.9/378/Add.3
• A/49/17(SUPP)
• A/50/17(SUPP)
• A/51/17(SUPP)
• A/52/17(SUPP)
• A/53/17(SUPP)
• A/54/17(SUPP)
• A/55/17(SUPP)
• A/CN.9/472/Add.1
• A/CN.9/472/Add.2
• A/CN.9/472/Add.3
• A/CN.9/472/Add.4
• A/CN.9/472/Add.5
• A/CN.9/489/Add.1
• A/CN.9/490/Add.1
• A/CN.9/490/Add.2
• A/CN.9/490/Add.3
• A/CN.9/490/Add.4
• A.CN.9/490/Add.5
• A/CN.9/491/Add.1
• A/CN.9/WG.II/WP.87
• A/CN.9/WG.II/WP.89
• A/CN.9/WG.II/WP.93
• A/CN.9/WG.II/WP.96
• A/CN.9/WG.II/WP.98
• A/CN.9/WG.II/WP.102
• A/CN.9/WG.II/WP.104
• A/CN.9/WG.II/WP.105
• A/CN.9/WG.II/WP.106

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Five Key Points Regarding the Assignment of Receivables in Healthcare Transactions

In the healthcare investment arena, the securing of credit facilities is complicated by the so-called “anti-assignment” provisions of the Social Security Act and its implementing regulations. These provisions do not prohibit a provider from assigning or granting an effective security interest in Medicare and Medicaid receivables, but do prohibit any assignee or secured party from directly receiving the proceeds of such receivables. As a result, traditional securing structures must be modified and institutions that finance healthcare entities must consider the following:

• Required Offset Waivers . As part of the Medicare enrollment process, enrollees are required to obtain offset waivers from their financing institutions for deposit accounts maintained with such financing institutions that will directly receive proceeds from Medicare or Medicaid receivables. As a result, until these proceeds are moved to a different deposit account at the direction of the provider, financing institutions are unable to offset against funds on deposit in the initial deposit account that holds Medicare or Medicaid receivables against outstanding loans. For this reason, a provider should be required to segregate its receivables into two different lockboxes: one dedicated to the receipt of Medicare and Medicaid receivables (and subject to the offset waiver) and one dedicated to the receipt of all other receivables (and not subject to the offset waiver).
• Provider-Controlled Receivables . Regulations promulgated by CMS require that all proceeds of Medicare and Medicaid receivables must be initially paid to a deposit account with respect to which only the provider can give instructions. As a result, such a deposit account cannot be subject to a customary UCC “control agreement” whereby the bank agrees to give the lender the right to direct the disposition of funds in the deposit account. The lender, therefore, cannot obtain a direct security interest in such a deposit account through the use of a control agreement. However, the lender will continue to have an indirect security interest in all amounts on deposit in the deposit account as proceeds of its perfected security interest in the Medicare and Medicaid receivables themselves (which would arise by making the appropriate UCC-1 filings and executing a security agreement covering the receivables with the relevant debtor/borrower). Nevertheless, a lender’s recourse against such proceeds of Medicare and Medicaid receivables is limited until they are moved out of the initial deposit account.
• Double Lockbox Structure . To address the inability of a lender to offset against the initial deposit account or obtain a direct security interest in such deposit account through use of a control agreement, lenders commonly require a “double lockbox” structure. As indicated above, the provider should already have segregated its receivables payments into two dedicated lockboxes. The lender will require that all proceeds deposited in the dedicated Medicare/Medicaid lockbox account be swept out on a daily basis to either the nongovernment lockbox account or another deposit account subject to the control of the lender. Lenders and providers will commonly enter into agreements with the depositary bank whereby the provider instructs the depositary bank to sweep the contents of this account into a lender-controlled lockbox account at the end of each day. If the borrower ever desires to change these standing instructions, the agreement governing such account will normally require that the borrower provide 3–10 days’ prior written notice of such change to both the lender and the bank and/or provide that the bank will notify the lender of the change a certain number of days prior to the instructions becoming effective. Moreover, the loan agreement with the borrower will commonly provide that an unauthorized change in the standing instruction to move funds to the lender-controlled lockbox account will result in an immediate default that would suspend the obligation of the lender to continue making loans to the borrower.
• Self-Help Unavailable . In the event of a default, traditional UCC “self-help” provisions generally cannot be used to cause the account debtor on Medicare and Medicaid accounts receivable (the U.S. government) to pay the lender directly, because CMS regulations prohibit assignees from directly receiving Medicare and Medicaid receivables. These regulations do contain exceptions to this prohibition against paying an assignee directly; however, a court order would be required and the assignee may be liable for overpayments as if it were the provider.
• Other Governmental Healthcare Programs . Lenders financing healthcare entities that have other types of healthcare-related governmental receivables, such as Energy Employees Occupational Illness Compensation Program Act receivables or Black Lung Benefits Act receivables, face similar restrictions on the assignment of receivables under the Federal Assignment of Claims Act. Although the Federal Assignment of Claims Act contains a financing exception for claims aggregating at least $1,000, in order for an assignment of receivables to comply with the exception, the lender must comply with burdensome notice filing requirements and the assignment must generally occur as part of the financing and prior to the performance of the government contract. This latter requirement creates challenges in the healthcare industry, where claims are generated after services are provided to patients. As a result, financing institutions often utilize the double lockbox structure for all types of healthcare-related governmental receivables.

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Assignment of Accounts Receivables and Factoring Agreements in the Construction Industry: How Can They Affect an Owner/Developer's Project?

It is not uncommon that companies with cash flow problems or those that have a desire to be paid on expedited terms assign their accounts receivables as collateral for a secured loan or they factor them. This can happen in any industry. What impacts can this have on a construction project when a contractor or vendor assigns or factors its accounts receivable?

First let's understand the difference between the two routes a contractor may take.

• In the case of assignment, the financial institution analyzes the accounts receivable aging report and for each invoice that qualifies the assignee generally receives between 50-85 percent of the outstanding balance in cash. Depending on the lender the contractor may have to assign all of the receivables or specific receivables to secure the loan. The benefit of this arrangement is that the contractor retains ownership of the accounts as long as the contractor makes loan payments and the lender deals directly with the contractor so customers may never know the contractor borrowed on their outstanding accounts.
• In the case of factoring, the contractor sells its accounts receivable to the financial institution or the factor. The factor analyzes the accounts receivable aging report to see which accounts meet their criteria. Factors will pay anywhere from approximately 65-90%. Factoring gives the contractor instant cash and puts the burden on collecting receivables on the factor. Factoring is generally expensive because the factoring companies charge high fees and they may retain recourse rights.

One may argue that a project owner or developer should not care whether a contractor assigns or factors their accounts receivable as long as they keep working. However, in the case of factoring especially, it can have an impact because the factor will require payment to be made directly to them. Presuming a project has a construction loan, the lender will not simply fund to an unknown company that has not been pre-approved by the lender. In addition, lenders and owners generally will not and should not make payments without receiving a lien waiver from the payee, which the factor may not be able to provide. If the lender will not fund, the contractor may have a basis to stop work which could delay the project.

This can be avoided, or at least discouraged, by having the proper language in the contract to prevent the assignment or the factoring. Most often the concern is the contractor assigning the agreement to another contractor which most contracts would adequately protect against by stating that the contract cannot be assigned without the consent of the owner. But sometimes that language is not enough because in both scenarios described above, the contract itself is not being assigned or sold, only the receivable.

Language such as: "Neither party to the Contract shall assign the Contract without written consent of the other" may not prevent a contractor from assigning the account receivable or factoring.

Broader, yet more specific language such as: "Contractor shall not assign or transfer its interest in this Contract or assign or transfer any right it may have under the same or the proceeds payable hereunder or any part hereof ..." not only prohibits assignment of the contract but certain interests in the contract which is better equipped to prevent against factoring. When assignees or factoring companies review the receivables they may consider contract language which expressly prohibits an assignment or factoring of the receivables which may keep your project out of such arrangements, which could impact your lender's funding and progress of the project.

Filed under

• Construction
• Tarter Krinsky & Drogin LLP

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Administrative Associate

Advertised on behalf of.

Addis Ababa, ETHIOPIA

Type of Contract :

Service Contract

Starting Date :

01-Oct-2024

Application Deadline :

20-Sep-24 (Midnight New York, USA)

Post Level :

Duration of initial contract :, time left :.

16d 15h 12m

Languages Required :

English  

Expected Duration of Assignment :

UNDP is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence. UNDP does not tolerate sexual exploitation and abuse, any kind of harassment, including sexual harassment, and discrimination. All selected candidates will, therefore, undergo rigorous reference and background checks.

UN Women, grounded in the vision of equality enshrined in the Charter of the United Nations, works for the elimination of discrimination against women and girls; the empowerment of women; and the achievement of equality between women and men as partners and beneficiaries of development, human rights, humanitarian action and peace and security.

Economic empowerment is one of the priority areas of UN Women. Investing in women’s economic empowerment, including income security, decent work, and economic autonomy, sets the stage for greater gender equality, poverty eradication, and inclusive economic growth. Cognizant to this and aligned to the global, regional initiatives and country priorities, UN Women Ethiopia Country Office’s Women Economic Empowerment thematic priority in Ethiopia is devoted in  creating opportunities for women/girls  and their businesses by promoting and supporting  enabling environments, institutional capacities  and women’s access to and control over resources/services  including technologies, financial and non-financial  services, and access to decent jobs  among others. UN Women works with different government sectors and development partners to promote women’s economic empowerment and increase their access to economic opportunities and outcomes, especially for those who are most excluded, including women migrant workers. And as the blueprint for the governance and coordination of international migration, it is critical that gender equality and the empowerment of women and girls are central in its implementation. UN Women works to help ensure that migrant women’s human and labour rights are effectively promoted and protected at all stages of migration, and that the implementation of the Global Compact for Migration is human rights -based and gender- responsive.

Under Women's Economic Empowerment Programme Portfolio, since 2023 UN Women Ethiopia office has been implementing the global Germany-funded Making Migration Safe for Women programme in   with the goal of ensuring that international norms and standards for protecting and promoting migrant women’s rights are strengthened and the development and implementation of national migration policies and laws are gender-responsive. The programme has also aimed to improve the use and collection of sex- disaggregated data and provide robust evidence and research on migrant women to inform national policy making.

It is in this context that UN Women in Ethiopia is seeking to recruit a Programme Associate to support the WEE Programme Portfolio including the MMS Project and members of the Programme Team in the effective development, implementation, monitoring and knowledge management tasks in consistent with UN Women rules and regulations.

Under the overall supervision of the Deputy Country Representative in Ethiopia, the Programme Associate will work under matrix supervision by the MMS National Coordinator and Women’s Economic Empowerment team leader, the Programme Associate works in close collaboration with the Programme and Operations teams to ensure successful programme implementation and reporting.  The Programme Associate will dedicate fifty percent of her/his time to supporting the MMS project and the remining fifty percent to the WEE portfolio.

Duties and Responsibilities

Provide administrative and logistical support to the formulation and management of the WEE Programme and MMS Project

• Provide administrative support in the preparation and implementation of work plans, budgets, and proposals on programme implementation arrangements.
• Assist the programme team in the drafting of Terms of Reference (TOR), call for proposals (CFP) and Internal Memos and related,
• Undertake logistical and administrative arrangements for organization of meetings, workshops and missions and assist the programme team in conducting trainings to key stakeholders and partners,
• Support the programme team in tracking use of financial resources, follow up with Implementing Partners (IPs) for timely reporting, review of reports from the same,
• Provide inputs to the preparation of procurement plans related to the programme and project activities; provide technical guidance to the Project/programme team and responsible parties on routine delivery and reporting of programme supported activities and finances.
• Closely work with programme and finance team in ensuring timely fund transfers and reporting as per the plans /agreements with implementing partners,
• Identify sources and gather and compile data and information for the preparation of documents, guidelines, speeches, policy briefs and position papers.

Prepare and administer project budgets in full compliance of UN Women rules, regulations, policies, and recording and reporting systems:

• Formulate the budget, control allotments, monitor expenditures, and prepare revisions according to the needs of the Office. 
• Track the appropriate and timely use of financial resources.   
• Create projects in Quantum, prepare budget revisions, revise project awards and status; and determine unutilized funds; operational and financial close of a project,
• Implement and maintain control mechanism for development projects through monitoring budgets preparation and modifications and budgetary status.   
• Undertake corrective actions on un-posted vouchers, including vouchers with budget check errors, match exceptions and unapproved vouchers. Respond to RO /HQ requests to resolve financial data issues. 
• Input data in Quantum and monitor status. Keep stakeholders and clients informed for timely action and/or decisions. 

Provide administrative support to the financial management of the Project:

• Review accounts receivables for UN Women project and follow-up with. 
• Create requisitions for procurement, travels and process payments for suppliers and consultants.
• Monitor the setup of budgets in Quantum to ensure they are in accordance with budgets agreed with donors and are input into Quantum at the detailed Activity ID level. 
• Monitor each month over-expenditure of budgets and follow up with Budget Owner. 
• Monitor regularly transactions posted to projects ensuring actual expenditure has been recorded against correct budget category and activity, take timely corrective actions as required. 
• Monitor proper follow up of advances to implementing partners, review their financial reports together with project coordinator. 
• Keep stakeholders and clients informed for timely actions/decisions and review status reports for quality control. 
• Associate revenue and expenditure in commitment control for non-core project. 
• Provide inputs and take necessary actions to facilitate timely financial project closure. 
• Support financial donor reporting by providing timely information and taking necessary actions as required by UN Women Virtual Global Service Centre for financial donor reporting. 
• Assist in drafting annual reports of the programme and uploading of cleared reports to RMS.
• Support the registration of new contracts and vendors and ensure expenditures are aligned with budget lines.
• Communicate and follow up with the operations team in facilitating gender responsive procurement.

Facilitate Knowledge Building and Knowledge Sharing

• Provide administrative support synthesis of lessons learnt and best practices related to programme management and finance.
• Provide administrative support to the organization of training for the office staff and partners on programme and operations related issues.
• Assist the team in holding regular Programme team meetings and take minutes of the meetings and follow-up with the team members on implementations agreed action points, 
• Assist in dissemination of knowledge products generated under WEE programme portfolio and MMS project,
• Keep an updated physical and digital archive of all WEE Programme and MMS project   documentation/ knowledge products,
• Assist suppliers/service providers in the production of knowledge products, the editing and design activities, 
• Assist the team in internally designing and production of quality knowledge products and promotion materials

The incumbent performs other duties within their functional profile as deemed necessary for the efficient functioning of the Office and the Organization.

Competencies

Core Values:

• Respect for Diversity
• Professionalism

Core Competencies:

• Awareness and Sensitivity Regarding Gender Issues
• Accountability
• Creative Problem Solving
• Effective Communication
• Inclusive Collaboration
• Stakeholder Engagement
• Leading by Example

Please visit this link for more information on UN Women’s Core Values and Competencies:

https://www.unwomen.org/en/about-us/employment/application-process#_Values

FUNCTIONAL COMPETENCIES:

• Strong knowledge of financial rules and regulations and accounting principles.  
• Strong knowledge and application skills of IT tools and understanding of management systems.   
• Strong knowledge of spreadsheet and database packages. 
• Ability to provide input to business processes re-engineering, implementation of new systems. 
• Ability to administer and execute financial and accounting processes and transactions. 

Required Skills and Experience

• Bachelor’s degree in programme/project management, social sciences, finance and accounting, business management or other related fields, with 4 years of experience or Master’s degree with 2 years’ experience.

Specialized national or international certification in accounting and finance is an asset. 

• Progressive experience in administration or programme management/support. 
• Experience in the usage of computers and office software packages (MS Word, Excel, etc.) and spreadsheet and database packages, experience in handling of web-based management systems is required. 

.      Experience in the use of a modern web-based ERP System, preferably Oracle Cloud, is desirable.