Account Receivable Purchase Agreement Template for Indonesia

When your business needs immediate cash flow from outstanding receivables, an Account Receivable Purchase Agreement provides a legally compliant solution under Indonesian law. This contract enables you to sell your accounts receivable to financial institutions, factoring companies, or other investors, converting future payments into immediate capital while transferring collection risks to the purchaser.

When do you need this document?

You'll require this agreement when your company faces cash flow challenges but has substantial outstanding receivables from creditworthy customers. Manufacturing companies often use this structure to finance raw material purchases while waiting for customer payments. Export businesses frequently sell their foreign receivables to manage currency risk and accelerate cash conversion. Technology companies with long payment cycles use receivables purchase agreements to fund operations and growth initiatives. Service providers with government contracts commonly monetize their receivables to bridge payment gaps, as government payments can take months to process.

Key legal considerations

Your agreement must clearly define the scope of receivables being sold, including specific invoices, customer obligations, and any limitations on the sale. The purchase price mechanism requires careful structuring, typically involving discounts that reflect credit risk, collection costs, and the purchaser's required return. You must provide comprehensive representations about receivable quality, customer creditworthiness, and the absence of disputes or setoffs. The agreement should address ongoing servicing obligations, including who will collect payments and handle customer communications. Default provisions must specify consequences if receivables prove uncollectible or if you breach representations. Recourse provisions determine whether you remain liable if customers fail to pay, significantly affecting the transaction's risk allocation.

Legal requirements in Indonesia

Under Indonesian Civil Code provisions, your receivables purchase agreement must satisfy basic contract formation requirements including offer, acceptance, and consideration. Law No. 42 of 1999 on Fiduciary Security governs the legal transfer of receivables as security, requiring proper notification procedures and registration where applicable. If the purchaser is a financial institution, compliance with OJK regulations under Law No. 21 of 2011 becomes mandatory, including licensing requirements and operational guidelines. Bank Indonesia Regulation No. 14/22/PBI/2012 imposes specific requirements on receivables financing activities, including documentation standards and risk management obligations. For electronic transactions or digital receivables, Law No. 11 of 2008 on Electronic Information and Transactions applies, ensuring digital signatures and electronic records have legal validity. The agreement must include proper Indonesian governing law clauses and specify jurisdiction for dispute resolution within Indonesia's court system.