Adding a New Factoring Invoice

Once the factoring agreement is Valid, you are ready to accept factoring invoices. Navigate to New Invoices section on Agreement Card page. Mandatory fields are Invoice ID, Debtor No., Invoice Date, Invoice Amount (Incl. VAT), Invoice Due Date. Other fields are filled automatically from the Factoring Agreement section but can be edited if necessary for each invoice.

More detailed description of New Invoices fields:

• Invoice ID - A unique invoice identifier must be entered.
• Status - New, Notification Sent, Accepted, Disbursed, Overdue, Closed or Rejected.
• Debtor No. - Select the applicable debtor from the list.
• Invoice Date - Cannot be later than the current date.
• Invoice No. - Same as Invoice ID.
• Invoice Amount (incl. VAT) - Must be specified.
• Invoice Due Date - Must be entered.
• Max. Fund Disbursement % - Can be adjusted.
• Advance % - Can be adjusted.
• Advance Amount - Can be adjusted.
• Commission % (Upfront) - Can be adjusted.
• Commission Amount (Upfront) - Can be adjusted.
• Commission % (Deferred)
• Interest Rate % (APR) - Can be adjusted.
• Increased Interest % (APR) - Can be adjusted.
• Minimum Interest Type - Not Applies, Fixed Amount, or Number of Days.
• Minimum Interest Value - Can be adjusted.

Factoring Invoice Status Flow

Key steps in the factoring invoice lifecycle:

1. Status set to New when invoice data is entered.
2. Notification Sent when a notification letter is sent to the debtor (optional).
3. Accepted when debtor confirms invoice. Receivables and payables posted. Mandatory before disbursement.
4. Disbursed automatically when the advance is paid to the vendor.
5. Overdue if debtor outstanding and invoice past due date.
6. Closed when debtor outstanding and reserve outstanding are zero.
7. Rejected if the debtor rejects the invoice. Can revert back to New or Notification Sent.

The Update Factoring Amounts function automatically handles status changes to Overdue and Closed based on outstanding amounts.

• Status New is assigned automatically when the officer inputs Factoring Invoice Data. The System does not allow the creation of a new Factoring Invoice record if the Factoring Agreement Status is not Valid. The system does not allow the manual insertion of a factoring invoice when Factoring Type = loan. The system enables the deletion of the Factoring Invoice with the Status New.
• Status Notification Sent can be updated manually when the officer sends a Notification to a Debtor about a new Factoring Invoice received from a Vendor. This is not a mandatory status and can be skipped. The system allows you to revert the status to New if required.
• Status Accepted is updated manually when a Debtor confirms the new invoice acceptance. The system automatically posts Receivables and Payables for the "Invoice Amount (incl. VAT)" value on this action. If Factoring Type = Loan, Status Accepted is set automatically when the officer sets Status to Valid for the Factoring Agreement. This is a mandatory status because the System will not allow funds disbursement to a Vendor if the Factoring Invoice Status is not Accepted.
• Status Disbursed is automatically set when an Advance Payment to the Vendor is posted. In case of an Advance Payment reversal, the Status is automatically updated back to Accepted.
• If Factoring Type = Loan, Status Disbursed is always set automatically when Advance Payment to Debtor is posted.
• The function Update Factoring Amounts always sets the status overdue
  automatically. The status is set to Overdue when the "Debtor Outstanding" amount is not zero and the “Invoice Due Date” is lower than the calculation date. The System updates the status to Disbursed if the “Debtor Outstanding” amount becomes zero.
• The function Update Factoring Amounts always sets the status Closed automatically. It is set to Closed when "Debtor Outstanding" = 0, "Reserve Outstanding" = 0, and Status > Accepted. This rule does not apply to Loans.
• If Factoring Type = Loan, Status Closed must be set manually. The System does not allow changing the Status to Closed if "Debtor Outstanding" <> 0.
• Status Rejected can be updated manually when the officer receives the answer from the Debtor that a new Invoice is not accepted. The System allows Status to revert to New or Notification Sent if required.

Open Factoring Invoices

Open Factoring Invoices can be accessed from either an “Open Invoices” FastTab on an Agreement, or from “Open Invoices” cue in Factoring Manager Role Centre.

The aforementioned list provides users with an overview of all their Open Factoring Invoices, regardless of the agreement.

Factoring Open Invoices list contains these fields:

• Agreement information, such as Agreement No., Factoring Product Code, Disclosed/Undisclosed.
• Generic invoice information such as Invoice ID, Status, Increased Interest % (APR), Vendor Name, Debtor, Invoice Date, Invoice No., Invoice Amount, Currency Code, Invoice Due Date, Fund Code, Max. Fund Disbursement %, Advance %, Advance Amount, Commission Amount (Upfront), Commission Amount (Deferred), Interest % (APR).
• Disbursement Date – shows when advance payment was made the first time.
• Advance Paid shows the advance amount paid for a given date. Drilling down allows users to see which vendor ledger entries were taken into account when calculating this amount.
• Disbursed From Fund – shows the advance and reserve paid from the fund.
• Comm. Amount (Upfront) Billed shows the amount of upfront commission invoiced for a given date. Drilling down allows users to see which customer ledger entries were taken into account when calculating this amount.
• Comm. Amount (Deferred) Billed - shows the amount of deferred commission invoiced for a given date. Drilling down allows users to see which customer ledger entries were taken into account when calculating this amount.
• Interest Amount – shows the interest amount accrued for a given date. Drill down allows users to see more detailed calculations. More details in the section Interest Calculation Details
• Interest Amount Billed - shows the interest amount invoiced for a given date. Drilling down allows users to see which customer ledger entries were considered when calculating this amount.
• Term Charges Total - shows the total term charges, including the upfront commission amount, deferred commission amount, and interest amount.
• Term Charges Billed – shows the total of term charges invoiced for a given date.
• Term Charges Collected – shows the total amount collected for term charges invoices.
• Reserve Total – shows the total reserve amount without any deductions.
• Reserve Allocated - shows the percentage of the reserve amount allocated for other fees deducted from the reserve. For more information, refer to Automatic Posting of Collections from Reserve.
• Reserve Released shows the reserve amount that was already paid to the client. Drilling down allows users to see which vendor ledger entries were considered when calculating this amount.
• Debtor Collections - shows the debtor collection amount already paid by the debtor for a given date. Drilling down lets users see which customer ledger entries were considered when calculating this amount.
• Debtor Outstanding – shows the outstanding amount of debtor collections for a given date.
• Overdue Days – shows the number of days the invoice is overdue. This number is calculated starting from the invoice due date to the given date.
• Overdue Amount – shows the amount of debtor outstanding which is already overdue.
• Penalty Interest Amount -shows the penalty interest accrued for a given date. Drilling down allows the user to see more detailed calculations. There are more details in the section Interest Calculation Details.
• Penalty Interest Amount Billed - shows the penalty interest amount invoiced for a given date. Drilling down allows users to see which customer ledger entries were considered when calculating this amount.
• Estimated Max. Int. Amt. – shows the estimated maximum amount of interest that the business can expect if the invoice is not overdue.
• Estimated Reserve Outstanding – shows the estimated reserve outstanding after deducting the expected maximum interest amount and upfront commission amount.
• Last Notification Level – shows which level of the overdue notification was last sent.
• Do Not Send Overdue Notif. – users can check this box to exclude specific invoices from overdue notifications.

Interest Calculation Details

Clicking on the Interest Amount value (drill down) allows access to a more detailed interest calculation. The same applies to Penalty Interest; however, if the user drills down on the Penalty Interest Amount value, only lines related to Penalty Interest are shown.

The Factoring Interest Calculation Details page can contain more than one line, each representing the change in interest calculation, e.g., increased interest calculation started, interest base amount or outstanding amount changed, etc.

In this example, regular interest started accruing on 5/23/2023 when advance disbursement was made. After the due date passed, starting from 6/26/2023, increased interest started accruing. Interest calculation finished on 9/28/2023 when the debtor payment was received.

• Outstanding Amount – shows the outstanding amount of the calculation line.
• Disbursed In Period Start – shows the amount disbursed (only Loan).
• Interest Base Amount – shows the base amount on which interest is calculated in the calculation line.
• From Date – shows the starting date for the calculation of interest in the calculation line.
• To Date – shows the ending date for the calculation of interest in the calculation line.
• Number Of Days – shows the count of days in the calculation line.
• Interest % (APR) – shows annual interest percentage for the calculation line.
• Interest Amount – shows the interest amount calculated for the line.