Preparing for Factoring

Outcome

An agreement is accepted, defining the factoring company's degree of responsibility. The factoring company is registered and factoring charges are defined. The company's customer invoices are sold or pledged to the factoring company.

Remit any issued customer invoices to the factoring company for debt management in 'Bank Remittance. Open' (ARS300).

The customer master table (OCUSMA) is updated.

Before you start

A payment instruction to be used as a reference to the factoring company on the invoices must be entered in 'Payment Instruction. Open' (CRS285).

Follow these steps

1. Enter into an agreement with a factoring company

   Contact a factoring company and enter into an agreement regarding factoring terms. This can include defining responsibility for any unpaid invoices, charges, how the company should be paid for the invoices the factoring company has assumed responsibility for, etc.

2. Register factoring company and payment method

   Register the factoring company as a payer in 'Customer. Open' (CRS610). The payment class connected to this payer via the payment method determines whether the payer is a factoring company.

3. Include customers in factoring routine

   Connect the factoring payment method to each customer that should be included in the factoring routine. At the same time, also connect a payment instruction that informs the payer that payment should be made to the factoring company. You do this in (CRS610/K).