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Questions about dealing with factoring and Quickbooks.

I have a small business (staffing company) and need help on how to properly account for factoring cycle using quickbooks. I have used the help in quickbooks but I need a better understanding of it. If any one give me a step by step process for this, I will greatly appreciate it.

The steps involved:

  1. recording the deposit in QB which is the amount of all the invoices being factored less the factoring companies fees.

  1. Recording payment received from the customers for the invoices the have been factored.

Sincerely, Afzal.

Reply to
afzal
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I would say you shouldn't do it.

Just reconcile your accounts to the factors statements.

Reply to
Peter Saxton

Hi Afzal

In Quickbooks create a 2nd bank account and name it the name of the factoring company.

  1. Record your customer payments to this factoring bank acct.

  1. Make deposit - recording the payment from the factoring company to your real bank acct from the factoring bank act.

  2. Write cheque - The difference left over in the factoring bank acct is your expense (the factoring company's fees) - post to bank charges or create an expense called Receivables Factor expense. And this transaction should clear the factoring bank acct to zero.

gennif

Reply to
gennif

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