Factoring in purchasing

[SusanneZ]

Hi, I have a question regarding factoring:

Company A purchases goods from a supplier. However, this supplier assigns its receivable to a factoring bank to which Company A makes the remittance (to the factoring bank). What would be the best way to represent the factoring process/workarounds?

Many thanks!

Best regards,

Susanne

[jose_alaman]

What you can do is assign a factoring accounting account to those operations and transfer balances between those suppliers.

[SusanneZ]

Many, many thanks. I will try it tomorrow in the test system. Many greetings Susanne

[Johan_H]

Hi Susanne,

Could the A/P Reserve Invoice work for this scenario?

Company A would pay before they receive the goods. The invoice would be made with the BP code of the supplier, but with the necessary info of the factoring bank (name, vat code, bak account, etc.). The Purchase Order and Goods Receipt PO would be made normally with the same BP code.

Regards,

Johan

[SusanneZ]

Hi, might also be an idea. Thanks for that very much. Unfortunately, the factoring bank is probably issuing the invoice.

Many greetings,

Susanne

[Johan_H]

Hi Susanne,

"Unfortunately, the factoring bank is probably issuing the invoice."

This does not have to be a problem. Recently we had a somewhat similar scenario. In our case we had made the order and goods receipt under the supplier BP, as usual. However, the invoice "got lost in the mail", and the supplier had outsourced their dunning. process. As a result, the invoice was sent again, but now from the dunning agency. They also required that the payment be made to them instead of to the supplier. I.e. their name, their bank account, etc. needed to be on the payment.

We solved this by adding the dunning agency's bank account to our supplier's master data, and changing the name on the supplier's invoice to that of the dunning agency. Thus, the payment went to the dunning agency, and we got to draw the invoice from the supplier's goods receipt = money went to the right place, stock movement was handled in the normal traceable way, and all documents were closed.

Regards,

Johan

[SusanneZ]

Hi Johan,

thanks again for your help.

So it would mean, you would enter in our case in the master data of the supplier for the payment/address that of the factoring bank? LG Susanne

[Johan_H]

Exactly. Basically you do this:

1. Add the factoring bank's bank account to the supplier's master data.
2. Create the Purchase Order with the supplier's BP number, as usual.
3. Maybe change the billing address?
4. Draw the A/P Reserve Invoice from the Purchase Order (Copy to or Copy from). DO NOT ADD YET.
5. Change the name on the Reserve Invoice (Hold down the CTRL key on your keyboard when you leave the field). Now add the document.
6. Pay the invoice. Remember to use the factoring bank's bank account from step 1.
7. The factoring bank (hopefully) approves the delivery of goods from the supplier.
8. When the goods arrive, draw the Goods Receipt PO from the A/P Reserve Invoice.
9. I do not remember, but you may need to change the name on the Goods Receipt PO back to the Supplier's before adding the document (Hold down the CTRL key on your keyboard when you leave the field).

Regards,

Johan