We have discussed this in the past - so a deep search will show lots of info. There is more than 1 way to account for AR factoring and arrangements with the funders may vary. I have done it this way:
- Establish a "FactorBank" account in QB.
- ALL the cash flow transactions between your company's 'normal bank account' and Factor get posted to that 'FactorBank" account.
- All the Factored Customer Payments are also posted as deposited to the FactorBank. Review the Factors statement to find these.
- When you get statements from the Factor record all the commission/discount charges as a "Vendor Bill" from the factor. Then pay that bill from the "FactorBank" account.
Doing it this way uses a minimum of steps and is pretty clean - except that the FactorBank balance will normally be negative because you will actually owe them money. This is just a presentation problem - the underlying accounting is still correct.
