Factoring invoices

Hi @Adam_Lahouidek

I think what you have going on here are a few different scenarios. As long as I’ve understood correctly, I’ll try and go through them individually.

1. Custom pays factoring company
Let’s keep it simple, you invoice for £100, customer pays the full £100 to the factoring company and you receive £70 of this.

You should treat this the same as you would a merchant account.

Firstly, create a virtual bank account. When the client pays, you end up with three transactions:

  1. £100.00 into factoring account, tagged to the invoice
  2. £30.00 paid out of the factoring account tagged to a supplier invoice
  3. £70.00 paid out, tagged as a transfer to your current account

Resulting balance is zero, and everything should be accounted for.

This article my be of use to you.

2. Customer pays you
I’m guessing that you would normally keep 100% of the invoice balance, in which case you just tag the £100.00 in to the invoice.

If the factoring company received the £100, you’d follow a similar principle as above. However, you’d alter the amounts and the bank accounts to fit your scenario.

3. Monthly invoice
Your supplier invoices you in a monthly basis for the £450.00 and you tag it to their invoice as normal.

Hopefully I’ve understood you correctly, and hopefully that helps.