Notice of assignment

The notice is not a request. Once a debtor has received it, paying the original carrier does not discharge the debt, and the debtor can be required to pay twice. The document that reverses it is a release letter, sometimes called a letter of release, issued when the factoring relationship ends.

In practice. The factor sends the notice when the relationship starts, and brokers record the remittance change in their system. Problems appear with brokers who had you set up before, because their accounts payable may keep paying you out of habit.

If that happens, the money is not yours. Forward it to the factor. Keeping it becomes a chargeback and, in some agreements, a default.

Example. A broker pays $2,400 directly to a carrier whose invoices are assigned. The factor still expects $2,400. The carrier now owes the factor that amount regardless of whether the money has already been spent on fuel.

Why it matters for your cash flow. A misdirected payment shows up as a chargeback against your reserve or your next advance, which turns one administrative error into an immediate hole in working capital.