How to Track Accounts Receivable in Quickbooks when Working with a Factor

Step-by-Step Guide

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   Step 1: Create a 2 Accounts Receivable account in the COA called “Factor AR.” Any invoices that are to be given to the Factor have to be created out of this AR account.

   Using this report, you can go to Customers
   -> Receive Payments in QuickBooks.
   
   You will receive the payments against the invoices in the normal fashion, but instead of having the payment go to the normal “ Undeposited Funds ” account, you will have to post it to a new Other Current Asset account called “ Due from Factor .” This process will reduce the actual receivable (because it’s paid) and increase the “ Due from Factor ” account therefor showing that money is owed to you from the Factor. , This process will increase the bank account and decrease the “ Due from Factor ” account therefor reducing the amount of money that is owed to you from the Factor.
   
   If you then double click on the “ Due from Factor ” account, it will have a running balance just like a bank account so you can see the balance owed to you from the Factor.
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   Step 2: On a daily basis you will be able to get a Cash Receipts report from the Factor to see which invoices had been paid by the customer.

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   Step 3: when lump sums of money are received from the Factor

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   Step 4: all that needs to be done is make a deposit in QuickBooks depositing the money into the checking account and choosing “ Due from Factor ” as the From Account .

Detailed Guide

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