Factoring, as a service for enterprises with unexpired claims for goods and services, affects many aspects of activity of a company. Liquidity management is an important element for the enterprise in moving towards its purpose and strategy. The factoring instrument, through the range of offered options, supports a more efficient and more effective activity of the enterprise, supplying the entity with capital or monitoring the repayment of debts. This article will describe the functioning of factoring, its character and development in Poland and in the world. After introducing the service, the connection between using factoring and financial liquidity management will be determined.