Factoring a Bill

[Andres Stickar]

Yes Justin.
This is a very simple and easy way to do it.
I asked about it, because maybe exist a better way to do it.
Thanks a lot.

Andrés.

On Thu, Jun 23, 2011 at 6:38 PM, jldugger at gmail.com <jldugger at gmail.com>wrote:

> "Factoring is a financial transaction whereby a business job sells its
> accounts receivable (i.e., invoices) to a third party (called a
> factor) at a discount in exchange for immediate money with which to
> finance continued business.
> ...
> There are three principal parts to the factoring transaction; a.) the
> advance, a percentage of the invoice face value that is paid to the
> seller upon submission, b.) the reserve, the remainder of the total
> invoice amount held until the payment by the account debtor is made
> and c.) the fee, the cost associated with the transaction which is
> deducted from the reserve prior to it being paid back the seller.
> Sometimes the factor charges the seller a service charge, as well as
> interest based on how long the factor must wait to receive " [1]
>
> I think you would take the bill in accounts recievable and make an
> offsetting transaction,  splitting off the advance to your cash
> accounts, the reserve to a separate account, and the fees to an
> expense account. Does this sound wrong?
>
> Justin Dugger
>
>  [1]: http://en.wikipedia.org/wiki/Factoring_%28finance%29
>
> On Thu, Jun 23, 2011 at 3:47 PM, Andres Stickar <astickar at gmail.com>
> wrote:
> > Hi all.
> >
> > In the normal operation, I bill a client and enter the bill in the system
> > with a due date to 30 days.
> > But in the real world, if I need the money before the due date, I can
> > negotiate it in a factoring enterprise or a Bank.
> > I release the bill to an enterprise or  Bank who give my the money today
> ,
> > but not all, and wait to the due date (30 days)
> > After 30 days they receive the all amount of the original bill.
> > Now the problem. How can I register this.
> > Thanks in advance
> >
> > Andrés Stickar
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