Defining Supplier Bank Accounts: Factor Accounts v/s Account Owners
SummaryWhen to use Factor Accounts and Account Owners
Bank Accounts can be defined for suppliers at supplier, address or site level. While creating a bank account, you can use several fields to define the bank account such as the Bank, Branch, mark it as a Factor Account or add Account Owners etc.
This note explains the significance of making a bank account a Factor Account or adding Account Owners. 2 different use cases drive these two functionalities.
Factor Account: A bank account can be identified as a Factor Account, if the purpose of the bank account is to receive funds that are owed to the supplier, but are being collected on behalf of the supplier by the bank or a third party. The supplier receives payments from the funds collected, minus a commission.