USA Using General Entries to Overcome Multiple Software Systems

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Good Morning,

I recently started working for a new company. Previously, they had managed their accounting with two different software systems. Invoices are generated by one system and were recorded in quickbooks online individually. Aside from invoicing, the rest of the accounting is all recorded in quickbooks.

As the company continues to grow this method of entry is becoming increasingly inefficient. I haven't found an effective way to batch enter invoices from the other system into quickbooks online.

Additionally complicating things is we recently began factoring our A/R and A/P. Now two additional entries are needed for each order we generate:

upload_2015-7-23_9-54-6.png


My question is, can I manage the invoices in the one system and just create general entries in QBO and attach a spreadsheet of supporting documentation? It seems this would be much easier as QBO wants you to receive a payment for each receivable. You can batch these receipts, but only by customer. Same goes for payables.

Any advice on how to effectively scale up this operation is much appreciated.

Thanks,

Shawn
 

smallbushelp

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Are you sure you're accounting for factoring correctly? Your journal entry example doesn't look like a typical factoring arrangement. Why are you crediting accounts payable when debiting COGS?

You can most certainly use the second accounting system as a subsidiary ledger and enter your sales transactions in batches in QBO as an invoice with the factoring company as the customer. Then when the receivables are sold to the factoring company, you would just record the payment received as usual.
 
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That should read cost of service. We basically hire independent contractors to work on our client's behalf.

What's the typical factoring arrangement look like?
 

smallbushelp

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Factoring is when a company sells it's receivables to a factoring company at a discount. The factoring company would pay you maybe 85 cents on the dollar then they take over the responsibility for collecting the receivables and assume the risk of non-payment. Your company gets cash sooner to continue operations. You can do an internet search on factoring to get more information.

Your example looks more like you're borrowing money to finance your operations.
 
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I'm familiar with the concept of factoring. Research in how to make these entries is what resulted in the above. I've seen variations where "Note Payable" was notated as "Invoices Factored" or something along those lines, but the essence is the same. Technically we're financing our operations using our A/R as collateral.
 

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