Factoring

1. Create a Factoring Account in the Current Assets Group. To do this double click on the Current Assets Group, this opens the group on the right hand side of the page. On the right press the green plus button and type the account name (Factoring Account) the accout type I would use is Bank. This account is reconcileable.
2. When you create a sales invoice the ‘From’ account is your Sales type and the ‘To’ account is Unpaid Invoices (debtors).
3. When you receive money from the factoring company you need to enter a Green Book Transfer ‘From’ Factoring Account ‘To’ Bank Account.
4. When the factoring company reports that an invoice has been paid this is a Green Book Transfer. Enter Customer name ‘From’ Unpaid Invoices ‘To’ Factoring Account. You will then need to go to the customer record view and tick the paid box on the correct invoice.
5. To enter the factoring invoices charges these are a Red Book transaction ‘From’ Factoring Account ‘To’ (new expense account called ‘Charges Factoring’ of the type ‘Other finance Charges account’ which does not need to be reconcileable).

NOTE: If you have the Customer Records functionality, you can do step 4 directly from there, where all the information for that customer can be seen in one place.