Managing factoring

Outcome

Invoices are sold or pledged to a factoring company. Depending on the factoring agreement, invoices later reported as not paid are reopened and included in the company's debt management routine. For detailed information, see the subordinate process documents.

See Factoring.

Before you start

Before you start, you must meet these prerequisites:

• The company must have a solid understanding of the costs and savings involved in this type of outsourcing and how it may affect its customer relationship management.
• You must perform the activity described in Preparing for factoring.

Follow these steps

1. Create invoices with payment method for factoring.

   If you have connected your customers to a specific payment method for factoring, all invoices created for these customers receive this payment method. This is a prerequisite for including them in the factoring routine.

2. Send invoice to payer for information purposes.

   In addition to the invoice the factoring company sends, you can send a copy of the invoice and payment instructions to the payer. Whether or not you do this depends on your company's routines and your factoring agreement.

3. Remit invoices to factoring company

   Create a selection of invoices in 'Bank Remittance. Open' (ARS300) or 'Remit Direct Debit and Factoring. Open' (ARS410), with the payment method as the main selection criterion, and remit the invoices to the factoring company. Electronic remittance of invoices for factoring is supported for (ARS410) through document 526, but not for (ARS300).

4. Reconcile payments.

   When you receive the money from the factoring company, reconcile the payment against the remitted invoices in 'Bank Remittance. Reconcile Payment' (ARS350) or (ARS410).