Invoice Factoring Video Library
How Does Invoice Factoring Work?
Invoice factoring is a great way to build and maintain cash flow. This video explains about the lifecycle of a factored invoice. Here’s what happens after an invoice leaves your hands.
- It begins when you receive and fulfill an order.
- As soon as your services or goods are delivered, you invoice your customers. You also send the factoring company a copy of the invoice.
- Once the invoice is quickly verified, funds are wired directly into your bank account.
- You’ll usually receive an advance anywhere from 80% to 95% of the invoice amount. The remaining percentage is placed into a reserve account.
- The factor then collects payment from your customer within the agreed upon terms (net 30, 60 or days, etc.).
- Your account is credited for the payments received by your customers and the remaining funds deposited in your account minus a small factoring fee. This is the factoring rate which ranges from 0.55% to 2% monthly.
- You can see all your transactions through our secure online portal at any time.
Financing that Grows With Your Business
Learn how accounts receivable financing is a scalable financial solution that grows as your business grows. Invoice factoring offers business owners a cash flow solutions that is quick, inexpensive and flexible.
Why B2B Service Providers Turn to Invoice Factoring
This video illustrates how you can turn your accounts receivables into working capital fast through invoice factoring with Universal Funding. Learn how you can say yes to big projects and get the funding you need today.
Sell Your Unpaid Invoices for Cash Today
If you spend time waiting for your customers to pay their invoices, you may want to consider invoice factoring. Universal Funding offers a fast and easy way to get an advance on your unpaid invoices and free up your cash.
How Much Will It Cost to Finance My Business?
Alternative lenders approve 63-67% of applications compared to large banks, which approve 17-19% of the time. But the loan rates for alternative financing can be fairly high. Business owners can look to other forms of funding, such as accounts receivable financing or invoice factoring to get access to immediate working capital. Invoice factoring is a financing solution providing an advance against unpaid invoices. It is not a traditional loan, so your business is not incurring additional debt.
How To Reconcile QuickBooks For Factored Invoices
What’s the best way to record an invoice in QuicBooks and keep track of outstanding balances along with the factoring rates paid to the factoring company once the transaction is complete? Here is a 3-step process for you to follow:
Step 1: Create an A/R account in the Chart of Accounts (CoA), titled Factored A/R. All factored invoices will be created from this account. Use the original account for non-factored invoices.
Step 2: Check your eFactor account daily to see which invoices have been paid. In your QuickBooks account, you’ll go to Customers Receive Payments and receive the payments for the factored debts. You’ll post these payments to a new “other current assets” account called “Due from Factor.” This will show the balance owed to you from your factor.
Step 3: When you receive funds from your factor, make a deposit into the checking account and choose “Due from Factor” as the from account.
It’s essential that you use accrual accounting methods or VAT if you factor debts. If you have any challenges reconciling your QuickBooks, don’t hesitate to contact your dedicated Account Representative to assist you with this process.