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Factoring of Accounts Receivable
Selling your unpaid customer invoices to a third party (Factor) to get immediate cash.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash | Asset (+) | 9,500.00 | - |
| Factoring Fee / Loss | Expense (+) | 500.00 | - |
| Accounts Receivable | Asset (-) | - | 10,000.00 |
💡 Accountant's Note
Factoring is a way to speed up cash flow. You give up a percentage of the invoice value (the fee) in exchange for getting the cash today instead of in 60 days.
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QA
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.