Factoring software can be defined as an interacting, continuing, future-oriented structure of equipment and procedure, designed to generate and process information flow that can aid business executives in the management of their programs.

Factoring software involves broader and more inclusive activity then, say, research. It includes determining and specifying the data needed, the generation of this information by means of research then the processing of this data. While this is a system concept, research usually deals with fragmented, unrelated research projects, done to solve an existing problem identified by some executive.

Software is used on a continuing basis, serving as both a prognosis and a diagnosis. It is preventive as well as curative medicine for factoring companies. Defining the information needs is the most important step in the development of factoring software. The efficacy of the system as a whole depends on this basic step. When clarity is lacking with regard to information needs, the software as a whole gets misdirected and handicapped. Good software recognizes that different executive levels in the company require different types/ segments of information and it ensures that information needs of various executive positions in the company are defined by the concerned executive themselves.

Good software should fulfill the following requirements. It must be unified. It must be conceived and used as a decision support system. It must be compatible with the company and with the overall level of sophistication of the firm. It must be user oriented and it must secure the involvement of users. It must also involve and motivate the suppliers of the information. It must be economical. The cost value ratio of the information processed by the software should be favorable to the firm. It must be capable of absorbing smoothly any changes that may become necessary in the system.