Factoring

The factoring company holds 10% in reserve for 30 days and takes a 1% fee for every 15 days that the invoice is outstanding.

I do.

Does anyone who is not a troll have an answer?

Thanks

I remember back in the day I asked a beautiful young lady if "I can make love to her?". She said "I believe so", then she walked away and I never saw her again.

Since you're cash basis:

Debit Cash 90 Debit Factoring expense 10 Credit sales (or income) 100

The real sale/invoice may have been 125 dollars, but since you're cash basis only recognize the revenue you received. Whatever they collect is the revenue/income. Then you break in down between how much they keep as their fees (expense it) and you deposit the rest into your checking account. Make sense?

If the OP had asked how to account for factoring instead of if anyone knows how, the first thing I would ask the OP is to walk us through each step of the process before shooting from the hip.

Michelle L. Long, CPA, MBA Author of: Successful QuickBooks Consulting: The Complete Guide to Starting and Growing a QuickBooks Consulting Business

I think this can be a little more complicated than you have posted. More information is needed from the OP. Who does the customer pay, the seller or the factor? Do open invoices over 90 days go back to the seller. Who does the collection effort?

Macy

Hopefully the discussion below is helpful.

If you are interested, I use a funding company that is not a factor, but advances funds in a similar fashion. The benefit is that their rates are low (2.18 - 5%), and I keep ownership of my invoices. I'm not shilling for them, so if you're interested, send me a note & I will get you their info.

I have a pretty tortured method of posting everything, but if the other suggestons do not work, feel free to let me know.

Goog luck! Tony

Sorry that I was slow to repond. Thank you for the breakdown Michelle, it makes total sense!

and you still have the same effect on people.

"Gil Faver"