Loi Dailly: everything you need to know to use it

Definition of the Dailly Law

The Dailly Law allows commercial receivables to be assigned to a credit institution. Promulgated in France in 1981, it establishes a legal framework for the assignment of receivables and secures transactions. It takes its name from its author, the French senator Jean-Raymond Dailly.

A Dailly assignment ou Dailly claim is the transfer of receivables to a bank or financial institution in return for financing.

Le bordereau Dailly is the form used to make this transfer ( article L313-23 of the French Monetary Code ).

Let's take an example Telcomtel issued an invoice to SoftConnect on September 5. On the same day, it transferred the invoice for €200,000 to its bank. On September 6, it received €160,000, or 80% of the invoice value, from the bank. Telcomtel remains responsible for collection. On October 4, the day before the due date, she received the €200,000 from SoftConnect: €160,000 was reimbursed to the bank and €40,000 cleared the remaining debt.

What is a pledge of receivables?

Le pledge of receivables is a money-back guarantee between a company and its customer. There is no no third-party intervention (bank). Pledging provides a guarantee by allowing you to become a priority creditor, but does not provide any financing facility.

La cession Dailly, she , involves transferring the receivable to a third party (the bank). Collection is not only secure, but above all accelerated.

How does a Dailly assignment work?

During a cession Dailly The financial institution advances a company's receivables with immediate financing.

This can have several positive impacts on cash management of a company :

• Rapid access to cash to finance current operations or repay debts,

• Improved working capital to better cope with expenses,

• Financial flexibility allowing you to choose between assigning certain receivables or all of them.

Dailly banking and factoring: what's the difference?

• With the Dailly bancaire the assigning company retains responsibility for debt collection.

• L' affacturage delegates collection to a factoring company.

What's the difference between the Dailly Act and financial discounting?

• In the Dailly law In this case, the bank becomes the assignee of trade receivables, and the assigning company bears the risk of non-payment.

• In the financial discount, the bank buys the receivable at a reduced value before maturity and assumes responsibility for collection.

Dailly Act 1981: advantages and disadvantages

La Dailly Law has several advantages and disadvantages for companies

How do you account for an assignment of a Dailly receivable?

For the accounting for a Dailly sale :

1. Record the receivable (invoice),

2. Record the bank transfer and a debt to the bank for the same amount,

3. Record the customer's collection, the bank's repayment (generally 80% of the collection) and the balance of the receivable,

4. Expense bank charges

Which banks offer Dailly assignments?

Most banks prefer to offer factoring, rather than cessions Dailly.

Among the banks offering Dailly cessions are :

• La Banque Populaire

• La Caisse d'Epargne

• Le Crédit Coopératif

Is it possible to finance an association with a bank Dailly?

Le financing an association is possible if it is engaged in commercial activities or generates receivables.

Some banks allow associations to be financed with a bank Dailly: the Crédit Mutuel or the Crédit Coopératif for example.

Sogama Crédit Associatif is one of the associations facilitating this process.

Cession Dailly: what are the alternatives?

In addition to the assignment of Dailly receivables, there are other financing alternatives for companies, including :

• Inter-company credit allows you to extend the payment terms for your purchases or the payment terms for your customers.

• Stock pledging allows you to benefit from financing using your stock as collateral.

• Short-term bank credit offers a revolving credit line or short-term loan at an average rate of 4.28% in France, compared with 5.18% in the rest of Europe.

• Hero is the most economical and flexible financing alternative, with (among others) two solutions:

1. Accelerated Payout :

Hero offers SMEs and e-merchants a cash advance on their sales, with reduced fees. Unlike factoring, which costs between 5 and 15%.

1. BNPL (Buy Now Pay Later) :

Hero provides e-tailers with payment facilities to their B2B and B2C customers. Your customers can make staggered or deferred payments from 30 to 60 days. And you get paid instantly.

This solution is part of your digital strategy: over 64% of companies worldwide now carry out more than half of their B2B transactions electronically.

Frequently asked questions :

What are the conditions for a Dailly assignment?

Conditions may vary, but generally speaking, to assign receivables, they must be certain (service and delivery completed), non-contentious and not overdue.

Does cession Dailly affect customer relations?

Generally speaking, a Dailly assignment facilitates business relations, since it allows you to grant a longer payment term. However, you remain the debt collector, and must deal with any disputes to repay the bank.

Is it possible to cancel a Dailly claim?

Once the Dailly assignment has been carried out, it is difficult to cancel. The customer may object if he has not given his prior consent, or if he raises objections. arguments valid against the bank or the assignee.

Other articles on the same subject:

• Customer receivables: definition, calculation, management and collection

• How to easily calculate your accounts receivable

• Accounts receivable turnover: definition and calculation

• Customer collections: how do you manage them?