Factoring consists in transferring all or part of the customer accounts receivable or debts to a third party financial body: the factoring company. The factoring company collects the accounts receivable that have been transferred to it and the related non-payment risk. In exchange, the factoring company settles the amount of the invoices, minus commissions and late charges.

It is important to note that saving commissions and late charges is not automated. When entering the payment of the factoring company, you need to create at least two lines: one line for the payment of the receipt as a whole, and another line for commissions and late charges (under an appropriate payment attribute, see Payment attributes).

The factoring function as it is managed in Sage X3 is sub-divided into several phases:

  • Identification of the factors:  It is used to gather all the information relating to the factor, such as, its details, the specificities of the magnetic file that are sent to it, accounting information (factor accout, collective account or dedicated customer account)...
  • The assignement of a factor to the customer invoices to be processed (see Entry of factoring companies)
  • The creation of receipts (see Generation of Receipts)
  • The posting of these receipts (see Posting of Receipts)  
  • Notification of the payment (see Payment notification)  
  • You need to save a payment receipt the payment of the amount mentioned on the factoring company's receipt. This phase follows the normal payment flow (see Payment entry).

The factoring company is not considered a BP. The payment must be entered on the account of the factoring company, without mentioning the BP.

Prerequisites

SEEREFERTTO Refer to documentation Implementation

Screen management

Header

Factor code (field FCTCOD)

Factor code

The factor code is defined by the FCT data type which is made of 1 to 10 alphanumerical characters.
Factor name (field FCTNAM)

Factor name

The factor name is made of 1 to 30 alphanumeric characters.

Tab Details

Details

Information about the factor company including Bank ID and paying bank or banks. 

Information

Country (field CRY)

Factor details

This mask is used to enter the factor details, i.e. postal address and bank ID.

It is essential to enter the bank ID and the paying bank for the withdrawals and the remittances on magnetic media.
field CRYNAM
Factor address (field ADDFCT)

Factor details

This mask is used to enter the factor details, i.e. postal address and bank ID.

It is essential to enter the bank ID and the paying bank for the withdrawals and the remittances on magnetic media.
Postal code (field POSCOD)
City (field CTY)
field ITINERAIRE

Click this icon to open a mapping site and locate the entered address.
State (field SAT)

Factor details

This mask is used to enter the factor details, i.e. postal address and bank ID.

It is essential to enter the bank ID and the paying bank for the withdrawals and the remittances on magnetic media.

Block number 2

Telephone (field TEL)
Fax (field FAX)
Internet address (field WEB)

Bank details

Bank account number (field BID)
Paying bank 1 (field PAB1)
Paying bank 2 (field PAB2)

Tab File

File 

Vendor code

Enter the vendor code used when printing receipts.

File name and extension

When the receipt posts, a magnetic file is issued in the "Bk" sub-directory in the tree structure of the active folder. This information is used to name the root of this issued file and to define its format.

Receipt sequence no.

A counter (see Counters) must be related to the factor in order to generate a number for each receipt.

Factor account no.

This is the general account related to the factor. Entries are recorded on this account when the receipt has posted. The final payment issued by the factor to the sales site as payment for the account receivable needs to be recorded to this account.

If this general account does not exist in the accounting plan, you need to create it in General Accounts.

Collective account or dedicated customer account

To avoid receipt posting and payment notification operations to be posted to a suspended account, you need to stipulate a collective account or a dedicated customer account. A record of the factoring operation is kept on the customer.

The account (or collective account) is an account dedicated to the customer WIP transferred to a factor. If there is no such account, you need to create it Chart of accounts.

Text

This text appears on the invoice print-out when an invoice is sent to the factor. It only applies to invoices where the factor is stipulated before validation.

Accounting data

Factoring type (field FCTTYP)

This field defines the type of relationship or contract with the factor. You have three options:

Standard: This type defines the current factoring management and these fields are disabled: Reserve %, Payment bank, Company/Site, Currency, and Rate type.

Recourse: You assume the risk in the event of a nonpayment.

No recourse: The factor assumes the risk in the event of a nonpayment and withholds an amount proportional to the invoice based on your contract, known as the Reserve %.

Reserve % (field FCTRES)

This field displays the percentage of the invoice that the factor withholds to anticipate a possible nonpayment. You can only edit this field if the factoring type is No recourse.

The actual percentage is based on your contract with the factor and cannot exceed the total invoice amount. If the invoice is unpaid, the factor does not return the reserve percent.

Payment bank (field FCTBAN)

This field shows the bank account that is used for all transaction with this factor. A factor must be linked to a bank account. You can only edit this field if the factoring type is not set to Standard.

The payment bank populates the following display-only fields:

Company/Site — This is the company/site for the factor. It must be compatible with the company/site for invoices being settled by the factor.

Currency — All the journal entries in the bank account use the currency allowed (currency of the account or currency of the company) and in the site of the bank (or in the main site of the company).

Rate type — When the invoice currency is different from the bank currency, the rate type is used to calculate the exchange rate.

The currency of this bank is used in the Receipt posting and Payment notification functions.
Company/site (field BANCPY)

The selected payment bank populates this display-only fields. This is the company/site for the factor. It must be compatible with the company/site for invoices being settled by the factor. You can only edit this field if the factoring type is not set to Standard.

Currency (field BANCUR)

The selected payment bank populates this field. All the journal entries in the bank account use the currency allowed (currency of the account or currency of the company) and in the site of the bank (or in the main site of the company). A factor must be linked to a bank account. You can only edit this field if the factoring type is not set to Standard.

The currency of this bank is used in the Receipt posting and Payment notification functions.
Rate type (field TYPRAT)

The selected payment bank populates this field. When the invoice currency is different from the bank currency, the rate type is used to calculate the exchange rate. A factor must be linked to a bank account. You can only edit this field if the factoring type is not set to Standard.

Accounting code (field ACCCOD)

This field is used to specify the accounting code of the BP.
The accounting code is a default value used in the creation of accounting documents.
It refers to a table that lists a certain amount of elements (collective accounts, accounts or parts of accounts) that can be used for the determination of the documents that will be posted.

File

Vendor code (field SALCOD)

The seller code

Code by which the company is referenced with the factoring company.
Receipt sequence no. (field FCTQTCVCR)

Enter here a document counter code. This code leads to the document counter table which is used to define the format of the receipt number.
This number is increased by 1 at each receipt generation request.
A counter must be related to the factor in order to generate a number for each receipt

SEEREFFERTO See the documentation on Counters.
File name (field FILNAM)

Name of the file

The code of the bank file that defines the set up of the file transmitted to the factor must be entered here.

The entry of this file code is mandatory for the magnetic remittances to the factor.
File extension (field FILEXT)

Extension name of the file

The extension name of the magnetic file which is transmitted to the factor must be entered it.
The entry of this field is mandatory if the name of the file is entered.
Text (field TXTSBRGT)

This text appears on the invoice print-out when an invoice is sent to the factor. It only applies to invoices where the factor is stipulated before validation.

Reports

Error messages

The only error messages are the generic ones.

Tables used

SEEREFERTTO Refer to documentation Implementation