Factoring - receipts
Receipts from the factor
For factoring with recourse and without recourse, the factor is the default pay-by business partner for all receipt transactions concerning factored invoices. If a factored invoice is selected for receipts, the received amount is the invoice amount minus the factoring commission minus the deductions that apply to the invoice.
You can select invoices for receipts in the following sessions:
- Select Invoices for Direct Debit (tfcmg4220m000)
- Direct Debit Advices (tfcmg4509m000)
- Anticipated Receipts (Details) (tfcmg2117s000)
- Bank Transactions (tfcmg2500m000)
These sessions also display the factoring commission so that you can see how the net invoiced amount was calculated. You can change the amount, the factoring commission, and the pay-by business partner.
The default factoring commission depends on the values entered for the LPS/Discount for Partial Payments and Commission on Partial Payments in the CMG Parameters (tfcmg0100s000) session. The Factoring account is specified in the CMG Parameters (tfcmg0100s000) session.
If the receipt is treated as a normal receipt, the journal entries are:
| Debit/Credit | Ledger Account |
|---|---|
| Debit | Bank Account |
| Debit | Factoring Commission Account |
| Debit | Discount/ Other Deductions |
| Credit | Customer Control Account |
If the receipt is treated as an advance, the journal entries are as follows, when the advance is created:
| Debit/Credit | Ledger Account |
|---|---|
| Debit | Bank Account |
| Credit | Advance Receipt Account |
When the advance is assigned to the invoices:
| Debit/Credit | Ledger Account |
|---|---|
| Debit | Advance Receipt |
| Debit | Factoring Commission Account |
| Debit | Discount/ Other Deductions |
| Credit | Customer Control Account |
Repay unassigned advances
For factoring with recourse and without recourse, you can repay the unassigned amount of an advance payment by means of a credit note for the factor.
When the credit note is created, LN creates the following entries:
| Debit/Credit | Ledger Account |
|---|---|
| Debit | Advance Receipt Account |
| Debit | Factoring Commission Account |
| Credit | Factor Control Account |
To reverse the entry for the Invoices Factored account and the Contingent Liability account, you must un-factor or reopen the invoices that were related to the advance that you repaid.
Factoring commission
The factoring commission is posted to the appropriate accounts when the factor makes payments to your company. If the invoice is linked to a payment schedule, the factoring commission must be proportionally assigned to each installment.
The net amount of the factoring commission is posted only once. The factoring commission is not posted per document. If an anticipated receipt is created for the payment document received from the factor, then the factoring commission is posted to the Actual Deductions account or the Interim Deductions account, as specified in the posting data. If the factoring commission is posted to the actual account on the anticipated receipt, it must not be posted again during reconciliation.
Posting the factoring commission is done in the following sessions:
- Reconciliation of Anticipated Payments/Receipts (tfcmg2102s000)
- Bank Transactions (tfcmg2500m000), for normal receipts or remittance advice
- Assign Unallocated/Advance Receipts to Invoices (tfcmg2105s000)