Source: Universal Funding | Re-Post QB Scott 6/27/19
“Which is the best way to record an invoice in QuickBooks and correctly keep track of outstanding balances and the factoring rates paid to the factoring company once the transaction is complete? I’ve seen references to several different solutions to this question. I’m getting a bit confused!”

Universal Funding’s answer comes in three easy steps.

Step 1: Create an Accounts Receivable account in the COA Chart of Account titled “Factored A/R”. All invoices that you submit to your factoring company for funding will need to be created out of this account. Then use the original account for non-factored invoices.

Step 2: If you are factoring with Universal Funding, check your e-Factor account to view which invoices have been paid. You will want to do this on a daily basis. In QuickBooks, you will go to Customers Receive Payments and receive the payments for the factored debts but instead of applying the payment to the normal “Undeposited Funds” account, you will post to a new “Other Current Asset” account called “Due from Factor” showing that a balance is owed to you from Universal Funding.

Step 3: When you receive money from your factor, make a deposit into the checking account and choose “Due from Factor” as the “From Account.”

Hope this helps!

Scott

 

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Author: Scott Meister, CPA

I help small businesses, accountants, bookkeepers, office managers, and business owners with their accounting needs. I’ve used QuickBooks since 2002 and train folks on how to use it efficiently. I create high-quality video training tutorials for QuickBooks and post them on QBScott.com

Certifications include:

Certified Public Accountant (CPA)
Certified Bookkeeper (CB)
Advanced Certified ProAdvisor for QuickBooks Desktop
Advanced Certified ProAdvisor for QuickBooks Online
Certified ProAdvisor for QuickBooks Enterprise
Certified ProAdvisor for QuickBooks Point Of Sale