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SOUTH AFRICAN QUALIFICATIONS AUTHORITY 
REGISTERED UNIT STANDARD: 

Demonstrate knowledge and understanding of a factoring agreement 
SAQA US ID UNIT STANDARD TITLE
12743  Demonstrate knowledge and understanding of a factoring agreement 
ORIGINATOR
SGB Banking and Micro Finance 
PRIMARY OR DELEGATED QUALITY ASSURANCE FUNCTIONARY
BANKSETA - Banking Sector Education and Training Authority 
FIELD SUBFIELD
Field 03 - Business, Commerce and Management Studies Finance, Economics and Accounting 
ABET BAND UNIT STANDARD TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS
Undefined  Regular  Level 4  NQF Level 04 
REGISTRATION STATUS REGISTRATION START DATE REGISTRATION END DATE SAQA DECISION NUMBER
Reregistered  2018-07-01  2023-06-30  SAQA 06120/18 
LAST DATE FOR ENROLMENT LAST DATE FOR ACHIEVEMENT
2024-06-30   2027-06-30  

In all of the tables in this document, both the pre-2009 NQF Level and the NQF Level is shown. In the text (purpose statements, qualification rules, etc), any references to NQF Levels are to the pre-2009 levels unless specifically stated otherwise.  

This unit standard does not replace any other unit standard and is not replaced by any other unit standard. 

PURPOSE OF THE UNIT STANDARD 
This unit standard is intended for all learners working in factoring.

Persons credited with this unit standard will be able to demonstrate knowledge and understanding of the basic concepts associated with the factoring agreement, specific requirements of the factoring houses agreement, and the breakdown in a contractual relationship between a factoring house and supplier. They will also be able to explain the administrative implications of the factoring agreement and the operational risk management implications of the factoring agreement. 

LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING 
Open. 

Specific Outcomes and Assessment Criteria: 

SPECIFIC OUTCOME 1 
Demonstrate knowledge and understanding of the basic concepts. 
OUTCOME NOTES 
Demonstrate knowledge and understanding of the basic concepts associated with the factoring agreement. 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.The concept of a factoring agreement as a 'buy and sell agreement' is explained in own words with reference to basic legal principles and factoring industry policy and practice. 

ASSESSMENT CRITERION 2 
2.The concept of a factoring agreement as a 'conditional loan agreement' is explained in own word with reference to basic legal principles and factoring industry policy and practice. 

ASSESSMENT CRITERION 3 
3.The legal implications of a 'buy and sell' factoring agreement are explained in own words according to basic legal principles and factoring industry policy and practice. 

ASSESSMENT CRITERION 4 
4.The accounting implications associated with debtors as an asset in a 'buy and sell' agreement are explained, according to generally accepted accounting principles and factoring industry policy and practice. 

ASSESSMENT CRITERION 5 
5.The legal implications of a 'conditional loan agreement' are explained in own words according to basic legal principles and factoring industry policy and practice. 

ASSESSMENT CRITERION 6 
6.The accounting implications associated with debtors as an asset in a conditional loan agreement are explained according to generally accepted accounting principles and factoring industry policy and practice. 

ASSESSMENT CRITERION 7 
7.The concepts of factoring with recourse and without recourse to the supplier are explained according to basic legal principles and factoring industry policy and practice. 

SPECIFIC OUTCOME 2 
Demonstrate knowledge and understanding of the specific requirements of the factoring 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.The roles and responsibilities of the factoring house are explained in own words according to the factoring agreement. 

ASSESSMENT CRITERION 2 
2.The roles and responsibilities of the supplier are explained in own words according to the factoring agreement. 

ASSESSMENT CRITERION 3 
3.The agreed terms upon which invoices are discounted are explained according to the factoring agreement. 

ASSESSMENT CRITERION 4 
4.The charges and fees associated with the service provided are explained according to the factoring agreement. 

ASSESSMENT CRITERION 5 
5.The actions that would constitute breach of contract from the factoring house's perspective are explained with the use of examples according to the factoring contract. 

ASSESSMENT CRITERION 6 
6.The actions that would constitute breach of contract from the supplier's perspective are explained with the use of examples according to the factoring contract. 

SPECIFIC OUTCOME 3 
Explain the administrative implications of the factoring agreement. 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.Key administrative procedures impacted by the terms of the agreement are identified according to the details of the factoring agreement. 

ASSESSMENT CRITERION 2 
2.The administrative implications are identified according to the requirements specified in the factoring agreement. 

ASSESSMENT CRITERION 3 
3.The implications are explained in terms of their impact on the factoring house from an administrative perspective according to the factoring agreement. 

ASSESSMENT CRITERION 4 
4.A specific factoring house's administrative procedures are evaluated according to the requirements specified in the factoring agreement. 

ASSESSMENT CRITERION 5 
5.Findings regarding the compliance of administrative procedures with the factoring agreement are explained according to the requirements specified in the factoring agreement. 

SPECIFIC OUTCOME 4 
Explain the operational risk management implications of the factoring agreement. 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.Key operational risks that the factoring house needs to manage are identified in terms of the requirements laid out in the factoring agreement. 

ASSESSMENT CRITERION 2 
2.The key operational risk management implications are identified according to the factoring agreement. 

ASSESSMENT CRITERION 3 
3.The key risk management implications are explained in terms of their impact on the operational practices of the factoring house according to the factoring agreement. 

ASSESSMENT CRITERION 4 
4.The implications, to the factoring house, of not managing these operational risks is explained with reference to the requirements laid out in the factoring agreement. 

SPECIFIC OUTCOME 5 
Demonstrate knowledge and understanding of the breakdown in a contractual relationship 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.Key elements in the breakdown of the contractual relationship are identified according to losses experienced by a factoring house. 

ASSESSMENT CRITERION 2 
2.Key elements in the breakdown of the contractual relationship are identified according to two court cases experienced by a factoring house. 

ASSESSMENT CRITERION 3 
3.The implications of losses for the contractual relationships are explained according to the factoring house's principles and practices. 

ASSESSMENT CRITERION 4 
4.Corrective practices implemented by the factoring houses to safe guard contractual relationships are identified and evaluated according to the factoring houses internal practice. 


UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS 
1.Anyone assessing a learner against this unit standard must be registered as an assessor with the relevant ETQA.
2.Any institution offering learning that will enable achievement of this unit standard or assessing this unit standard must be accredited as a provider with the relevant ETQA.
3.Moderation of assessment will be overseen by the relevant ETQA according to the moderation guidelines in the relevant qualification and the agreed ETQA procedures.

Therefore, anyone wishing to be assessed against this unit standard may apply to be assessed by any assessment agency, assessor or provider institution that is accredited by the relevant ETQA. 

UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 
  • General knowledge of the factoring industry.
  • Operating and computer systems knowledge sufficient to locate the necessary information and complete the task/function.
  • General understanding of the specific risks and relevant policies relating to processing factoring transaction. 


  • Critical Cross-field Outcomes (CCFO): 

    UNIT STANDARD CCFO IDENTIFYING 
  • To identify and solve problems when key elements in the breakdown of the contractual relationship between supplier and factoring house are explained and corrective practices evaluated. 

  • UNIT STANDARD CCFO COMMUNICATING 
  • To communicate effectively when explaining basic concepts associated with the factoring agreement .
  • The relationship between the factoring agreements and operational risk implications is explained. 

  • REREGISTRATION HISTORY 
    As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. 

    UNIT STANDARD NOTES 
    Legal Requirements

    All procedures must meet recognised codes of practice as well as obligations required by current legislation within South Africa and within the normal parameters of the defined job/task

    Terminology
  • Supplier - A term used in factoring to refer to the party who supplies the invoices for discounting. The term is used to distinguish this party from the terms used for debtors and creditors. 

  • QUALIFICATIONS UTILISING THIS UNIT STANDARD: 
      ID QUALIFICATION TITLE PRE-2009 NQF LEVEL NQF LEVEL STATUS END DATE PRIMARY OR DELEGATED QA FUNCTIONARY
    Elective  20185   Further Education and Training Certificate: Banking  Level 4  NQF Level 04  Reregistered  2023-06-30  BANKSETA 
    Elective  57901   Further Education and Training Certificate: Credit Management  Level 4  NQF Level 04  Reregistered  2023-06-30  FASSET 


    PROVIDERS CURRENTLY ACCREDITED TO OFFER THIS UNIT STANDARD: 
    This information shows the current accreditations (i.e. those not past their accreditation end dates), and is the most complete record available to SAQA as of today. Some Primary or Delegated Quality Assurance Functionaries have a lag in their recording systems for provider accreditation, in turn leading to a lag in notifying SAQA of all the providers that they have accredited to offer qualifications and unit standards, as well as any extensions to accreditation end dates. The relevant Primary or Delegated Quality Assurance Functionary should be notified if a record appears to be missing from here.
     
    1. Absa Learning & Development 
    2. Bidvest Bank 
    3. Chartall Business College 
    4. Cornerstone Performance Solutions (Pty) Ltd 
    5. Felix Risk Training Consultants 
    6. Firstrand Bank - Benmore 
    7. Nedbank Ltd 
    8. The Facilitation Workshop 



    All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.