Factoring Charges

droobledrooble New MemberRegistered, Array Posts: 8
I wonder if someone could help me. I have a new client who is using a factoring firm to collect sales income. Could anyone tell me if the factoring charges (which are shown on an a statement, but are deducted from the amount they pay to the company I am working for) are shown in the expenses part of the profit and loss statement as 'Factoring costs' or if they are reduced as a kind of 'cost of sales' in the revenue part.

Many thanks for any advice!

Comments

  • JodieRJodieR Experienced Mentor Registered Posts: 1,002
    Factoring charges need to be recorded on the P&L as an expense, in the same way in which bank charges are accounted for. If you've not already done so I find that it helps to set up a bank account on your accounts software for the factoring account and post all factoring transactions there, and this can then be reconciled to the factoring company's statments.
  • droobledrooble New Member Registered Posts: 8
    Thanks to other postings here, I had already opened the factoring account. Thanks for answering my question
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