How can I credit on invoice and apply that credit to a cost of doing business account we lose 10% off of our invoices to a factoring company

Hi @tracydhamers,

Let me help you record your credit on an invoice.

To record a credit, the first thing you need to do is to create an Invoice. Follow the steps below:

1. On the Plus (+) icon, click on Invoice.
2. Fill in the necessary information. Note that the amount should be exact.
3. Click on Save and Close.

Next, you process a Receive Payment transaction. Here's how:

1. On the Plus (+) icon, click on Receive Payment.
2. Fill in the necessary information. Note that for the Deposit to drop-down, choose Undeposited Funds.
3. Click Save and Close.

After, this is when you will process a bank deposit. Also, we can enter here the 10% which is taken out for the factoring company.

1. On the Plus (+) icon, click on Bank Deposit.
2. Tick the Payment you received.
3. Under Receive From column in Add fund to this deposit, enter the credit card fee as a vendor.
4. On the Account column, choose an expense account.
5. On the Amount column, enter the amount corresponding the fee. Note that you have to enter a negative amount. This way, the fee will be deducted to the amount you're depositing.
6. Click Save and Close.

Also, you might want to consider checking this answer discussed by @Rustler, one of our Established Community Backers: https://community.intuit.com/replies/3480565.

If you have other concerns, feel free to leave a comment below or post again. I'll be here to help you.

Well, invoice crediting is so important, but at times it can create problems too.

Well, if you are finding any kind of difficulty in crediting your invoice factoring services then better advice would be of consulting or contacting an expert or a financial consulting firm. They can provide you with the best and most reliable solution, which will help you and your business.

@Alessandra_B 

The link to my response you referenced, shows my response has been deleted, thanks anyway though

@lindak1119 

You need a factoring fee expense account and a non inventory type item for factoring fee which is linked to that expense account

best practice

create a credit memo for the customer, use the factoring fee item and enter the amount, then in receive payments, apply the credit memo to the invoice and receive payments.

The method that @Alessandra_B  proposes, works, but there is no way to tie that negative number on the deposit screen to one or more invoices, that breaks your paper trail during an audit as well as just being confusing months down the road - I do not recommend it.

some folks will edit the invoice and use that factoring fee item with a negative number to reduce the invoice amount to what was received.  That works, but it also might raise an eyebrow since you are not supposed to change historical sales with an edit