The Factor Payment Processing option allows you to identify a customer as a Factor. Once a customer is identified as a Factor, the system will allow you to apply checks from the company to any open invoices in the system (regardless of the Billto customer used on the invoice).
Factor Payment Processing is used to handle situations where you factor your receivables after they are created, and will receive payment for the invoices from a Factor company. Factor Payment processing can also be used when you have a very large amount of child customers for a single parent company and do not have the Parent Company for each child company defined in the Customer Master. The Factor Payment Processing option should be used carefully since it allows you to potentially pay an incorrect invoice when applying the checks for the Factor company.
Factor processing is accomplished by setting up the Finance Company in the Customer Master file and setting the Type field of the record to "F". Once this is done, the user can apply a payment from a Type F company to open invoices from any other company in the system.
During Cash Application the system checks to see if the check company type is set to F (indicating a Finance company). If the check company is a type F company, or if the check company is the parent of the company listed on the invoice, the operator can apply the payment to the invoice. If the check company is not a type F company or the parent of the invoice company, an error message is displayed and the operator is not allowed to process the invoice.