A non-factored (NF) invoice is one you track and collect for your client without purchasing it. There's no advance and no purchase fee. The invoice still goes through the usual Pending → Approved → Funded workflow, so it shows up in AR, Collections and your client's reports. When the debtor pays, the money goes to the client's Cash Reserve, and you pay it out to them with a reserve release.
Before you start
- The Nonfactored Invoice option has to be turned on for your account. If you don't see it on the Create Invoice form, contact FactorCloud support.
- NF invoices are for clients only. They can't be created for brokers.
- Create NF invoices one at a time with Create Invoice. Invoices brought in through Import Invoices or submitted from the client portal are always factored.
Step 1: Create the invoice as non-factored
- In the left-hand menu, click Invoices. From the Pending tab, click Create Invoice.
- Choose the Client and the Debtor, then enter the invoice number, amount, dates and any other details as usual.
- Leave Fuel Advance (1) blank. You can't fund an NF invoice that has an open fuel advance attached.
- Turn on Nonfactored Invoice (2). The switch sits under Labels and only appears after you pick a client.
- Click Create (3).
FactorCloud tags the new invoice with an NF label automatically, so you can spot it in every invoice list.
Tip: To change an invoice between factored and non-factored, open it, click Edit and change the switch. This only works while the invoice is Pending or Rejected. Once it's approved, the setting is locked.
Step 2: Approve the invoice for funding
Approve the NF invoice the same way as any other invoice. See Approving Invoices for Funding.
To find your NF invoices on any tab, look for the NF label (1), or click the filter icon and choose Nonfactored Invoice (2).
Client and debtor credit limits don't count NF invoices, because you aren't advancing any money on them.
Step 3: Fund the batch
- In the left-hand menu, click Funding. On the Fund tab, open the batch that holds the NF invoice.
- Check the batch:
- Each NF invoice shows the NF label (1), with an Advance Amount and Purchase Fee of 0.00.
- A batch with only NF invoices has a Total of 0.00 (2). Nothing is paid out, and no payment fee is charged.
- Fund the batch as usual.
NF and factored invoices for the same client can go in the same batch. Only the factored invoices are advanced, and the payment fee applies only when the batch has at least one factored invoice.
After funding
The invoice moves to the Funded tab with a status of Open. On the invoice's Details tab, Nonfactored Invoice reads Non-Factored (1) and the Advance Amount is 0.00 (2).
On the client's ledgers, the full invoice amount goes into Open AR and is held in Escrow until the debtor pays. The client's remittance has an NF column that marks which invoices weren't advanced.
When the debtor pays
- Post the payment to the invoice as usual.
- FactorCloud closes the invoice and moves the amount from Escrow to the client's Cash Reserve.
- Pay the client with a reserve release. See Reserve Releases.
NF invoices aren't charged collection fees or interest while they're open.
Things to keep in mind
| Situation | What happens |
|---|---|
| Fuel advance on an NF invoice | Don't attach one. Funding is blocked while the fuel advance is open. If it was already closed, funding can leave that day's accounting export out of balance. |
| Split payment method | Not available for NF invoices. Turning on Nonfactored Invoice clears a Split selection. |
| Marked NF by mistake | Change it before approval. After that, move the invoice back to Pending from the Funding screen, or reject it, and then edit it. |