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NickynooNickynoo Feels At HomeRegistered Posts: 34

Does anyone know much about Factoring accounts?

I know the principle of them, just loading them onto sage I wouldn't mind a little advice??

So money is received 80% of the sales invoice this is debit bank credit factoring account?
when the customer pays is this then recorded as a receipt in the factoring account and the difference 20% recorded in the bank?

This is confusing me slightly. . . . also would purchase payments come from the factoring or the bank?

Please shed some light someone :)


  • Claire321Claire321 Well-Known Registered Posts: 209

    When I worked for a company which used factoring some years ago, we had a bank account set up on Sage for the factoring funds received.

    When we received the initial receipt of the 80% of the sales invoice value (drawdown of funds available), we would perform a bank transfer on Sage from the factoring bank account to the current account - this would ensure that our current account would also reconcile correctly to the bank statement.

    When a customer paid an invoice we would receive theses funds on sage on to the sales ledger but would show them as being received from the factoring bank account. This ensured that the sales ledger was always correct and our aged debtors report would also be correct & up to date.

    At the end of each month we would receive a statement of charges from the factoring company, we would then enter this an a charge but paid from the factoring bank account - this would ensure that the balance in the factoring bank account on sage always balanced against the factoring statement.

    This is just the way that we did it but it worked well for us.
  • NickynooNickynoo Feels At Home Registered Posts: 34
    Thank you, that is a great help :)
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