Why does the difference between a consignment sale and a final sale matter when a company selling a product is using invoice factoring to boost their production? If accounts receivable financing is in place, the customer must acknowledge they have accepted all the product they purchased. Selling product as a consignment means the seller only needs to pay for it when it sells. If the seller cannot sell the product they can return it under the normal terms of a consignment sale.
This makes factoring an invoice for product on consignment impossible. The sale must be final without credits or set offs. The factor will verify that the entire order has been shipped in full and accepted by the account debtor before an advance will be made.