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• # 101681
• Fri 26 Sep 2014 04:21 PM

Hello Everyone,

I wondered if there are any Quickbooks users on here who might be able to help regarding posting and reconciling of Factored Invoices?

I have been told various accounts to set up, but none of them are the same depending on who I speak to. I have found it rather confusing to be honest. 

The way I am looking at it, is that I probably need to set up a separate Factored bank account and another accounts receivable account (stating it as Factor AR) due to the fact that not all of the Invoices are factored and that I would need to separate the ones that are?  And an account for charges? 

Once the right accounts are set up, reconciling should be fairly straight forward I assume. 

Thanks in advance for any help and advice.

Kind Regards

Tracey

• T.Durant

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• # 101682
• Fri 26 Sep 2014 05:58 PM

> Hi Tracey

You will need to set up a bank account for the factors.

When reconciling the there are two reconciliations to be done one for the sales ledger and one for the factoring current account.

You need to look at the factoring arrangements as it fairly unusual for the factors to allow companies not to factor some of their customers they usually have an all or nothing view in order to spread their risk. Otherwise you could just factor the slow paying or potentially dodgy customers. That said please note I said it is unusual not un heard of.

In terms of posting you should set up each of your customers as individual customers on the sales ledger so you can keep an eye on the. Raise the invoices and post them accounting for sales and VAT in the usual way.

When a customer settles the invoice credit the relevant sales ledger account as per normal the debit entry will be to the factoring companies bank account on your ledger.

When you drawdown money from the factors debit the current account and credit the factoring companies bank account.

Each month they will send you a breakdown of their charges i usually just post these as bank postings to save entering them on the purchase ledger and clearing them off. All I do is post it as a bank charge to the relevant P&L accounts.

Once you have posted all the transactions you can then reconcile the aged debtors for your QB system and the factors as well as reconciling the Factors bank account.

i hope this helps

Kind regards
stuart
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• Forum Moderator, South East & Greater London Regional Chairman
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