This guide describes how to manage factoring invoicing in the Netvisor system when the financing company is supported by Netvisor. The guide covers examples of recording payments when payments are made using a reference.
At least a few financing companies offering factoring invoicing can provide account statements and reference materials related to payments for factoring invoicing. This greatly facilitates the monitoring of accounts receivable and accounting work in companies and accounting firms. The following example describes the factoring invoicing process from both the sales ledger and accounting perspectives according to the methods described below. A table-like material of accounting vouchers and entries is compiled below. Note: this is one way of handling factoring invoicing, where account statements are obtained from factoring accounts and payments are received with the original invoice reference numbers.
Factoring invoicing handling process in the example:
- The financing company is one of the financing companies supported by Netvisor regarding factoring invoicing.
- The company has a so-called financing and invoice account with the financing company.
- The financing company electronically delivers account statements from both accounts. The delivery frequency of account statements should be the same as the company's bank account, where the financing company pays the financing.
- The financing company delivers reference material for payments received in the invoice account.
- The financing company pays the payments for invoices transferred to factoring with the original reference numbers.
- Necessary accounting rules are created for account statement processing and these rules are utilized in the creation of vouchers from account statements (using accounting proposal).
- Expenses charged by the financing company from the factoring financing account are recorded in accounting through account statement processing.
- When the events visible in the invoice account are recorded in accounting according to this example, the balance of the accounting invoice account always matches the balance of the Factoring invoice account statement, regardless of whether the invoiced sales have already been recorded in the invoice account. If the sales have not yet been recorded in the invoice account, the so-called sales in transit are visible in account 1717 Factoring sales receivables in transit.
Factoring implementation in my example case
Accounts used in the example
1717 Factoring receivables in transit, interim account for processing payments (Sales/Basic information and settings/Factoring account management)
1718 Factoring sales receivable account invoice account (Company name/Bank accounts)
1910 Bank account
1995 Transfers in transit
2841 Factoring credit account financing account (Company name/Bank accounts)
2939 Value-added tax liability
3000 Sales
9690 Other financing expenses
1. Set up the invoice and financing accounts reported by the financing company in Netvisor's bank accounts with the following information:
Invoice account
Financing account (The accounting account for the financing account is chosen as either 2639 or 2841 depending on the nature of the financing, in the example account 2841 is used)
2. Set up the factoring account in Netvisor according to the guide. In the example, it is done like this:
3. Set up the necessary accounting rules through account statement processing when the respective events are on the account statement. This way, you can best define the correct identification information (e.g., payment subject code, payment name specification, bank account, etc.). Remember that there is a difference between uppercase and lowercase letters in the payment name specification.
Factoring invoice creation and payment recording, example case
1. Set up the customer, remember to define the Factoring account on the Additional information editing tab of the customer card.
2. Create invoices and send them. The sending process automatically includes both the factoring notification and the sales invoice to be sent. Vouchers are created from the sent invoices, with the following content:
3. The respective event is visible on the factoring invoice account statement, from which it is recorded using the accounting proposal after creating the accounting rule as follows:
4. The financing company transfers financing from the invoices to the company's factoring financing account. The event on the account statement is recorded using the accounting proposal after creating the accounting rule as follows:
5. The financing company credit is visible on the company's bank account. The event on the account statement is recorded using the accounting proposal after creating the accounting rule as follows:
6. The customer pays the invoice and the reference payment arrives (automatic recording) and at the same time, the payment is also recorded in the sales ledger. Content on the voucher as follows:
When the customer pays the invoice, a reference payment event is created in addition to the invoice and financing account. These recordings are reviewed in the following sections.
7. The payment event is visible on the financing account statement, from which it is recorded using the accounting proposal after creating the accounting rule as follows:
8. The payment event is visible on the invoice account statement, from which it is recorded using the accounting proposal after creating the accounting rule as follows:
9. After the payment, the financing company transfers the missing part of the payment to the company's bank account. The recording is done in the same way as in sections 4 and 5. Thus, the vouchers in the example case are as follows:
10. Factoring expenses visible on the factoring financing account are recorded on the desired expense accounts. In the example, expenses and interest are not itemized and the voucher is recorded as follows:
Accounting entries and sales ledger events
Keywords: Factoring invoicing, accounting rules, sales ledger, accounting, supported financing company
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