This article describes a way you can show the purchasing of the debtors and payments in your company file.
This article is provided for guidance only, and might not be suitable for your busines...
Updated 6 years ago
Version 2.0
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Hi,
Great article SupportNoteGuy.
I'm just trying to get my head around how to record our situation...
In our case the finance company is advances money on the purchase order and then when the customer pays us we reimburse the finance company.
For example
PO/Invoice value: $29,179.88
The finance company gives us 3 advances
- Advance 1: $13,000
- Advance 2: $5,000
- Advance 3: $6,500
Total advances $24,500
Debtor then pays us when job is complete $29,179.88 (full value of PO/Invoice)
We remit back to the finance company $28,369.81 which is the money advanced ($24,500) plus the finance companies interest and charges ($3,869.81)
The remianing residual ($810.07) we bank.
$24,500 + $3,869.81 + $810.07 = $29,179.88
How do I record this using the factoring accounts you mention above.
Thanks
L.