Sage 50 Accounting - U.S. Edition

[mackeym]

Steve

I agree with you regarding trying to avoid factoring.  Some that I looked at were basically loan sharks.  However, there are several reputable factoring companies with rates less than accepting credit cards.  The problem is the better ones want larger businesses.  When I looked into the ones that specialize in my industry, they want sales in excess of $5M.  My personal preference is credit card, but I have rather large tickets and customers don't always have the credit limit for them.  There are advantages to factoring beyond getting your money sooner.  Mine will give me credit ratings, etc. on potential new accounts.  I also earn interest on my earnest money.

[mackeym]

i recently started factoring, too.  Have you looked at this solution from the knowledgebase?  Sometimes their solutions make things worse though.

Mike

http://kb.sagesoftwareonline.com/cgi-bin/sagesoftwareonline.cfg/php/enduser/std_adp.php?p_faqid=576&...

[streamline_mn]

I would receive payment against the customer invoice and use  the discount field for their cut.

If they're not paying you right away for the invoices turned over to them, then I'd create an other current asset account called "due from factoring company" and then do a receipt into that account instead of a bank account to pay off the invoice.

Then when you get payment from them, the receipt would go against the due from account, with a deduction for their cut to whatever expense account. 

[GaryCahn]

We recently just started using a factor. Did you ever figure out how to set up Peachtree software with your factoring of invoices. We also have house invoices. Its a nightmare when you start thinking how to do this.

please let me know

[kayflanery]

I agree with Steve Collins, factoring is extremely costly.  There's a company called GreenFlag, Jeff Otto, 618-540-4727.  They do collections for just $15 per account.  Check it out!  Use my name, Kay Flanery, JCS Computer Ressource.

[StephenC]

Others here may disagree with me, but I think the best advice anyone can give you about factoring is don't do it.  If you look at the percentage they charge you and convert that to an annual interest rate, it usually turns out to be a very expensive way to borrow money.  Most of the companies that I have known that routinely factored invoices were circling the drain - some of them knew it, others were blind to it, but they met the same fate.  I think that is the reason most accounting software doesn't have features to accommodate factoring - the users keep going away.  I don't mean to be rude or insulting, that is just the pattern I have seen.  I hope your experience is different.

In addition to the expense, it is a bookkeeping nightmare, as you have already learned.   The closest thing to a solution I can think of is to record the initial money received from the factoring company as a partial payment on the customer's invoice. When you get the remainder of the money, less fees, enter a Receipt that pays the invoice in full and put the fees in the discount column so that your cash comes out to the right amount.  You can change the GL account for the discount at the bottom of the window.

[urbaita]

Hi - We have recently started using a factoring company and are having difficulty modifying our process and using peachtree correctly to account for the discount that the factoring company takes.  I have searched and have not found any discussion on factoring.  Any insights are helpful.  Thanks.

Anthony