Construction
Factoring of Progress Invoice
Selling a certified progress invoice to a factoring company to receive immediate cash.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash in Bank (Advance) | Asset (+) | 190,000.00 | - |
| Factoring Fee / Finance Charge | Expense (+) | 10,000.00 | - |
| Accounts Receivable (Progress Invoice) | Asset (-) | - | 200,000.00 |
💡 Accountant's Note
Contractors with long payment cycles can factor certified invoices for immediate cash. The discount charged by the factor (typically 3-6%) is a finance cost.
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