Register Factoring Company and Payment Method

This document explains how you register a factoring company to which your company has sold or pledged its customer invoices.

The factoring company is entered as a payer in 'Customer. Open' (CRS610).

Outcome

A factoring company is entered as a payer and connected to a payment method with a payment type specified as payment class 6-'Factoring'.

Connect the payment method created to each customer in (CRS610). The registered information is then used to remit the customer invoices to the factoring company in 'Bank Remittance. Open' (ARS300).

The customer master file (OCUSMA) is updated.

Before you start

See Preparing for Factoring.

Follow these steps

Follow the steps below to create a factoring company.

  1. Start 'Customer. Open' (CRS610).

  2. Specify a customer ID consisting of up to ten alphanumeric characters.

  3. Select option 1='Create'.

  4. Specify the status of the factoring company in the 'Status' field.

  5. Specify 2-'Payer' in the 'Customer type' field.

  6. Specify contact details.

  7. Specify mandatory fields on the other panels to complete the creation.

    (CRS610/F): 'District', 'Customer group'

    (CRS610/G): 'Packaging terms', 'Place', 'Delivery terms', 'Attr price rule', 'Delivery method'

    (CRS610/H): 'Date format', 'Price printout'

    (CRS610/J): 'Currency', 'Exch rate type', 'Payment terms', 'Due date base'

    (CRS610/K): 'Statement code'

    (CRS610/L): 'Geograph code'

    Note: Most mandatory fields in (CRS610) are not applicable for factoring companies. When you specify values for these mandatory fields, specify any value.

Follow the steps below to create a payment type for factoring.

  1. Start 'Payment Type. Open' (CRS078).

  2. Specify an ID consisting of up to two alphanumeric characters.

  3. Select option 1='Create'.

  4. Specify a name, and a description (optional).

  5. Specify 6-'Factoring' in the 'Payment class' field.

  6. Select the ID of the factoring company you created.

  7. Specify the factoring charge, either as a fixed amount or as a percentage.

Follow the steps below to create a payment method for factoring.

  1. Start 'AR Payment Method. Open' (CRS076).

  2. Specify a payment method ID consisting of up to three alphanumeric characters.

  3. Specify the payment type ID of the factoring payment type you created.

  4. Select option 1='Create'.

  5. Specify a description, and a name (optional).

  6. Specify a grouping method in the 'Group due date' field.

    0 = No grouping

    1 = Group by due date

    2 = Group by specific date (in this case the remittance date, which is then used as payment date).

  7. Select a bank operation ID (optional) identifying the bank transaction type, to facilitate external reconciliation in the general ledger.

Follow the steps below to add the payment method for factoring to the factoring company.

  1. Start 'Customer. Open' (CRS610).

  2. Select the factoring company in the list.

  3. Select option 2='Change'.

  4. Open panel (CRS610/J).

  5. Select the payment method for factoring in the 'Payment mtd AR' field.

Parameters to set

This table lists the fields in (CRS610) required for factoring.

Note: Most values required in (CRS610) are not applicable for factoring companies.
Program ID/Panel Field The field indicates …
(CRS610/E) Status

… the status of the factoring company.

The valid alternatives are:

10-'Preliminary'

20-'Definitive'

90-'Blocked/expired'
(CRS610/E) (Contact details) … the name and address of the factoring company as well as other contact information.
(CRS610/J) Payment method

… a payment method belonging to payment class 6-'Factoring'. This payment method is what distinguishes the factoring company from other payers.

Factoring charges are defined for the payment type included in the payment method. The payment type is also used as a selection criterion when remitting invoices to the factoring company in 'Bank Remittance. Open' (ARS300).

This table shows the payment type options for factoring charges.

Program ID/Panel Field The field indicates …
(CRS078/E) Fixed factoring charge

… the amount that the factoring company charges for each remitted customer invoice. The amount is entered in local currency and is automatically converted to the invoice currency at remittance.

The charge is displayed per invoice in the remittance proposal created in (ARS300). The remitted amount minus the charges is displayed in 'Bank Remittance. Reconcile Payment' (ARS350) when reconciling the payments.

Note that even though it is technically possible to enter a remittance charge both as an amount and as a percentage (see below), this is seldom recommended. In such a case both values would be used to calculate the charges.

(CRS078/E) Factoring charge in percent … the percentage of the invoice amount of each remitted customer invoice that the factoring company charges.
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