Factoring Companies

lorraine

Not sure which section to post this in, here goes!:

Does anyone on here have experience of factoring companies?, it is just that I have a client who uses a factoring company and when the factoring company sends through remittances, they have a lower amount as the invoice value then what the original invoice has on it. My question is, would I be correct by putting through the original amount on the invoice and putting vat through as that amount.

Also I have a balance left over from the difference from the original amounts to the amount the factoring company has put the invoice on as.

Thank you in advance if you can help.

jilt

lorraine wrote: »

Not sure which section to post this in, here goes!:

Does anyone on here have experience of factoring companies?, it is just that I have a client who uses a factoring company and when the factoring company sends through remittances, they have a lower amount as the invoice value then what the original invoice has on it. My question is, would I be correct by putting through the original amount on the invoice and putting vat through as that amount.

Also I have a balance left over from the difference from the original amounts to the amount the factoring company has put the invoice on as.

Thank you in advance if you can help.

When you say the remittance has a lower amount on do you mean becasue they have deducted their 'cut'? My employer uses HSBC who don't actually do it like that. Basically the sales should be recorded in full and vat at the correct amount and the difference is the factoring company's fees, but obviously they should still send you a vat invoice for the fees.

jilt

Ah you posted it twice

lorraine

wasn't sure where to post, well it must be their cut, can't think what else it could be, the client has given me copies of invoices for the factoring company fees, that is why I didn't expect this and don't know what it is for.

lorraine

Will be contacting the client and the factoring company to ask what it for. Thank you for your help, very much appreciated.

jilt

Let me know if you still have any queries Loraine afetr they have sent you the info, I may be able to help with bookkeeping entries, it took me a while to get my head around it.