QBO - Factoring Use and Setup
Modified on: Wed, 25 Mar, 2020 at 4:53 PM
Dr. Dispatch is capable of handling the factoring of your freight bills. This feature must be turned on and set up prior to use.
Setup Factoring in Dr Dispatch:
- Each load can be marked to be factored or not factored in the customer rate screen.
- Open Dr. Dispatch and go to Settings->Preferences-> Trucking Factoring or Brokerage Factoring.
- The factoring process operates identically for trucking and brokerage; place a checkmark to engage factoring for trucking, brokerage or both.
- You must supply the percentage rate your factoring company charges. If your factor fee is 5%, then type in .05 in the provided field. Always use a decimal point and the proper leading zero(s). Dr. Dispatch can only allow one percentage.
- Check "Factor All Loads" to have factoring automatically applied to all loads.
Using Factoring on a Load:
- Close setup and navigate to either Trucking Dispatch or Brokerage Dispatch.
- Select the 'Dispatch' tab and choose a load to use as a test.
- Press the button to open the 'Customer Pay' form in the upper right corner of the screen.
- After rating a load, simply put a checkmark in the factor box and press 'Calc Factor Chg' button.
- The calculation should now happen automatically each time the rate screen is closed.
- When loads are invoiced, Dr. Dispatch will print an invoice for the entire amount due. When exported to QuickBooks, the invoice will appear with an additional line item displaying the factoring amount deducted from the invoice total. The factor fee will be placed in an expense account of your choice and will be deducted from income.
- The QuickBooks 'Accounts Receivable' entry will reflect the gross pay minus the factoring fee to reflect the proper balance due.
Setup Factoring in QuickBooks:
Creating a QuickBooks Factoring Account
- If you haven’t already, turn on the discount feature.
- Select Settings ⚙ and then Account and Settings.
- Select the Sales tab on the menu.
- In the Sales form content section, select the pencil ✏ icon to edit it.
- Select the Discount checkbox to turn it on.
- Then select Save and then Done.
Create a discount item
- Select Settings ⚙ and then Products and Services.
- Select New to create a new item.
- Select Service for the type.
- Name the item Factor Fee.
- From the Income account drop-down menu, select the Discount given account. QuickBooks creates this account for you when you turn on the discount feature.
- When you’re done, select Save and close.
Setting Up a Factoring Line Item in DRD
- Open Dr. Dispatch and select System-> set up-> QuickBooks set up
- Press the 'Setup Now' button and go to the 'Manage Accounts' tab.
- Important: You must place a checkmark next to 'Discount Items' before pressing the 'Refresh' button.
- With the proper QuickBooks company file still open in the background, press the 'Refresh' button and wait until all the fields populate.
- All of your prior items and accounts should come back after refreshing the setup screen. You have simply added a new item to existing items.
- Locate the 'Factor Fee' field at the bottom of the page, click the drop-down list and you should see your new line item in the list; choose your new account from the list.
- Press the 'Save Changes' button.
- You may now exit the QuickBooks setup as this finalizes the factoring set up.
- To test this new feature, choose any load then open the customer rate screen. Place a checkmark in the factor box, close the screen and create a test invoice for the load.
- When invoices are exported and opened up in QB, you will notice your normal rates listed as well as a discount subtracting the factor fee from the total amount due. This discount will also carry over into your Accounts Receivable account and reflect the correct amount owed to your company.
- The invoice printed from Dr. Dispatch will reflect the entire gross pay amount without discounts. When the factoring company issues payment for the invoice, QB will calculate and retain the correct amount due. The factoring fees will accumulate in your 'Factor Fee' expense account automatically to streamline tax and accounting tasks.
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