Business Glossary

the process of writing a promissory note with accounts receivable as collateral. If the note is dishonored, the assignee can collect upon the accounts receivable. In a general assignment, all the receivables serve as collateral. New receivables can be substituted for those collected. In a specific assignment, the parties sign an agreement specifying who will receive collection (assignor or assignee), whether customers will be notified of the arrangement, specific accounts to be collateralize , and the finance charges.