<br/>Invoice factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third party (factor) at a discount. The factor then collects payment from the business's customers. This allows the business to receive immediate cash flow rather than waiting for customers to pay their invoices, which can improve liquidity and working capital. Invoice factoring is often used by businesses that have cash flow constraints or need to fund growth but have slow-paying customers.