Dynamics 365 Business Central – How I configure Business Central when using Invoice Factoring or Invoice Discounting for Cash Collection

Dynamics 365 Business Central

Invoice factoring or discounting is a service that businesses can use to improve cash flow by selling some of their debts to an invoice factor/discounting company in exchange for immediate cash.
The blog article discusses configuring Business Central to manage the scenario of using invoice factoring services.
The first step is to configure relevant bank accounts in Business Central, including the main bank account and a bank account for the invoice factoring company.
The scenario presented involves selling goods on credit terms, passing the sales invoice to the invoice factor company, and drawing down cash from the invoice factor to improve cash flow.
Transactions such as bank transfers, cash receipts, and journal entries are used to manage the process of applying payments, fees, and reconciling accounts in Business Central.
The example provided showcases a simple transaction in an invoice factoring scenario, illustrating the process of sending invoices to the factoring company, drawing down cash, and posting fees.
The article emphasizes that there are multiple ways to configure Business Central when utilizing invoice factoring facilities and services to manage cash flow effectively.
Overall, the blog article serves as a guide for businesses looking to leverage invoice factoring services within the Business Central platform for improved financial management.

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