The Essential Choices That You Are Sure of In Factoring Now

There are shipments to the buyer is done standardly, through the “Sales of goods / services” and issue an invoice.Assign the request to the agent with a similar document. The operation is not subject to taxation, so you do not need to issue an invoice.

Your Smart Options

Write off a monetary claim from the buyer (usually carried out as “Other expenses”). To do this, create a document “Debt write-off”, select the type of debt “Debt of the debtor”, select the customer by the debtor and tie up the cost item.

The first payment from the factor is carried out as “Payment from the buyer”. The payer chooses his financial agent, at the base of the payment pull up the implementation, on which the assignment was made.For the services rendered, the agent levies a commission on which it is necessary to pay VAT. Create a new “Receipt of goods and services” and enter an invoice on its basis. The support of the factoring company is essential now.

The Second Part

When you receive the second part of the amount after deduction of commission, the balance of the debt is closed with the document “Offsetting accounts receivable”. The creditor and the debtor choose your financial agent. If you fill out the document automatically (using the “Select by balances” button), then the “Debt receivable” tab will show the balance of the assignment debt, and on the “Debt of the creditor” tab – the invoice for the commission.

Take to deduction of VAT on commission, for this purpose, in the journal “Formation of purchases book records”, create a new regulated document.Important! When working with this algorithm, make sure that the factoring agreement is correctly selected in each document.

Factoring in the Country: Advantages, Disadvantages and Prospects

The convenience of factoring is confirmed by the benefits that each participant in the transaction receives.

Supplier Factor Buyer

  • There is no receivable.
  • Income from commission.
  • Deferment of payment.
  • There are no financial risks.
  • Growth of the customer base.
  • Possibility of payment in installments.
  • Fast turnover of capital.

Increase in profitability

The main disadvantage of factoring until recently was a cumbersome and not always transparent document flow, which at times increased the transaction cycle and costs for it.

Decreased commission

Decreased labor costs for document processing.Shipment of goods and receipt of payment became possible in one day.Knowing the rules and features of factoring operations, it is easy to understand whether they suit you or not. However, it should be taken into account that factoring is ineffective with too rhythmic schedule of shipments and payments.

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