This help describes how to manage factoring invoicing in the Netvisor system when the finance company is supported in Netvisor. The help covers example postings of payments when the payments are to be paid using a reference.
At least some finance companies that offer factoring invoicing deliver bank statements for accounts related to factoring invoicing and reference payment materials for payments. This facilitates accounts receivable monitoring related to factoring invoicing and the bookkeeping case in companies and accounting offices.
In the following example, the factoring invoicing process is described from both the accounts receivable and bookkeeping perspectives in accordance with the operating methods described below. A tabular material has been compiled from the bookkeeping vouchers and entries. Note that this is one handling method for factoring invoicing, where bank statements are received for factoring accounts and payments are received with the original invoice reference numbers.
Factoring invoicing handling process in the example:
The finance company is one of the finance companies supported by Netvisor in terms of factoring invoicing.
The company has a finance account and an invoice account with the finance company.
The finance company delivers electronically a bank statement for both accounts. It is advisable to set the delivery frequency of the bank statements to be the same as that of the company’s bank account to which the finance company pays the funding.
The finance company delivers reference payment material for payments received to the invoice account.
The finance company pays the payments from invoices transferred to factoring with the original reference numbers.
For bank statement handling, the necessary posting rules are created and used in forming vouchers from bank statements (using the posting proposal).
Costs charged from the finance company’s factoring finance account are posted to bookkeeping via bank statement handling.
When the transactions shown on the invoice account are posted to bookkeeping according to this example, the balance of the bookkeeping invoice account will always match the balance of the factoring invoice account bank statement, regardless of whether the invoiced sales have already been posted to the invoice account. If sales have not yet been posted to the invoice account, the so-called sales in transit will be shown on account 1717 Factoring receivables in transit.
Factoring implement in the example case
Bookkeeping accounts used in the example
1717 Factoring receivables in transit, clearing account for handling payments (Sales > Basic data and settings > Factoring account management)
1718 Factoring sales receivables account invoice account (Company name > Bank accounts)
1910 Bank account
1995 Transfers in transit
2841 Factoring credit account finance account (Company name > Bank accounts)
2939 VAT liability
3000 Sales
9690 Other financing expenses
1. Create the invoice and finance accounts reported by the finance company in Netvisor bank accounts with the following information:
Select Company name > Bank accounts.
Create the invoice account according to the information provided by the finance company.
Invoice account
Finance account (For the finance account bookkeeping account, either 2639 or 2841 is selected depending on the nature of the financing; in this example, account 2841 is used.)
Create the finance account according to the information provided by the finance company.
Select 2639 or 2841 as the finance account bookkeeping account depending on the nature of the financing.
2. Create the factoring account in Netvisor according to the help. In the example, the factoring account is defined as follows:
Select Sales > Basic data and settings > Factoring account management.
Create the factoring account as described in the linked help.
3. Create the necessary posting rules via bank statement handling when such transactions appear on the bank statement. This allows you to define the correct identifiers (for example, payment reason code, payment description, bank account) as precisely as possible. Remember that uppercase and lowercase letters make a difference in the payment description.
Select Bookkeeping > Bank statement handling.
Open the bank statement on which the transaction related to factoring appears.
Create a posting rule based on the transaction and define the identifiers (e.g. payment reason code, payment description, bank account).
Save the posting rule and use it to form the posting proposal.
Creating factoring invoices and posting payments, example case
1. Create a customer and define the factoring account on the customer card.
Select Sales > Customers.
Create a new customer or open an existing customer.
Select the Edit additional information tab.
Select a factoring account for the customer.
2. Create the invoices and send them. In the sending process, the factoring notification and the sales invoice will automatically be sent. Vouchers are created from the sent invoices, containing the following:
Create sales invoices for customers for whom a factoring account has been defined.
Send the invoices according to the normal sending process.
Note that the system creates both the factoring notification and the sales invoice.
3. Handle the transaction shown on the factoring invoice account bank statement using the posting proposal.
Select Bookkeeping > Bank statement handling.
Open the factoring invoice account bank statement.
Select the transaction related to the factoring invoice.
Use the previously created posting rule to form the posting proposal.
Check the posting and post the transaction to bookkeeping.
4. Handle the finance transferred by the finance company to the factoring finance account from the bank statement using the posting proposal.
Select Bookkeeping > Bank statement handling.
Open the factoring finance account bank statement.
Select the transaction corresponding to the finance transfer from the finance company.
Use the posting rule to form the posting proposal.
Check the posting and post the transaction to bookkeeping.
5. Handle the finance company’s crediting on the company’s bank account from the bank statement using the posting proposal.
Select Bookkeeping > Bank statement handling.
Open the company’s bank account statement.
Select the transaction corresponding to the finance company’s crediting.
Use the posting rule to form the posting proposal.
Check the posting and post the transaction to bookkeeping.
6. Handle the invoice paid by the customer as a reference payment and as an accounts receivable payment.
Receive the reference payment material from the finance company for the invoice account.
Let the system create the automatic posting for the reference payment.
Note that at the same time, the payment is recorded in accounts receivable.
The contents of the reference payment voucher are shown as follows:
When the customer pays the invoice, in addition to the reference payment, a transaction is created on both the invoice account and the finance account. The postings of these transactions are handled in the following sections.
7. Handle the payment transaction on the finance account bank statement using the posting proposal.
Select Bookkeeping > Bank statement handling.
Open the factoring finance account bank statement.
Select the transaction corresponding to the customer’s payment.
Use the posting rule to form the posting proposal.
Check the posting and post the transaction to bookkeeping.
8. Handle the payment transaction on the invoice account bank statement using the posting proposal.
Select Bookkeeping > Bank statement handling.
Open the factoring invoice account bank statement.
Select the transaction corresponding to the customer’s payment.
Use the posting rule to form the posting proposal.
Check the posting and post the transaction to bookkeeping.
9. Handle the missing portion of the payment transferred by the finance company to the company’s bank account in the same way as in steps 4 and 5.
Select Bookkeeping > Bank statement handling.
Open the factoring finance account bank statement and post the transfer made from the finance account to the bank account.
Open the company’s bank account statement and post the incoming transfer to the bank account.
Use posting rules to form posting proposals in both postings.
Check the postings and post the transactions to bookkeeping.
10. Handle the factoring costs shown on the factoring finance account and post them to the desired expense accounts.
Select Bookkeeping > Bank statement handling.
Open the factoring finance account bank statement.
Select the transaction containing factoring costs and interest.
Post the costs to the desired expense accounts (in the example, costs and interest are not separated and the voucher is posted to one expense account).
Bookkeeping entries and accounts receivable transactions
Frequently asked questions
Question: How is factoring invoicing enabled in Netvisor when the finance company is supported?
Answer: First create the invoice and finance accounts reported by the finance company in Netvisor bank accounts, create the factoring account in Netvisor according to the factoring help, and create the necessary posting rules for bank statement handling. After this, you can create factoring invoices and handle the payments according to the example process in the help.
Question: Which bookkeeping accounts are used in the factoring invoicing example?
Answer: The following accounts are used in the example: 1717 Factoring receivables in transit, 1718 Factoring sales receivables account (invoice account), 1910 Bank account, 1995 Transfers in transit, 2841 Factoring credit account (finance account), 2939 VAT liability, 3000 Sales and 9690 Other financing expenses.
Question: How do posting rules affect the handling of factoring invoicing?
Answer: Posting rules make it possible for transactions related to factoring shown on the bank statement to be posted automatically using the posting proposal. This way, the bookkeeping vouchers are formed correctly and the factoring invoice account balance matches the factoring invoice account bank statement balance.
Question: How is a factoring invoice paid by a customer posted in Netvisor?
Answer: When the customer pays the invoice, the reference payment is received and creates an automatic posting as well as a payment in accounts receivable. In addition, a transaction is created on both the invoice account and the finance account, which are posted to bookkeeping through the bank statements using posting rules and the posting proposal.
Question: How are factoring costs posted to bookkeeping?
Answer: Factoring costs shown on the factoring finance account are posted in bank statement handling to the desired expense accounts. In the example, costs and interest are not separated but are posted to a single expense account (9690 Other financing expenses).
Keywords: Factoring invoicing, posting rules, accounts receivable, bookkeeping, supported finance company
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