· Reviewed by Nimra Khalid
What is factoring reconciliation?
Factoring reconciliation means matching the money a factoring company advances, holds in reserve, releases and deducts in fees back to the invoices you sold it, and proving that your ledger agrees with the factor's statement. It keeps revenue recorded in full, shows the true cost of factoring, and catches unpaid invoices, chargebacks and short pays before they become losses.
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Factoring reconciliation: what we do and how it runs
Factoring reconciliation means matching the money a factoring company advances, holds in reserve, releases and deducts in fees back to the invoices you sold it, and proving that your ledger agrees with the factor's statement. It keeps revenue recorded in full, shows the true cost of factoring, and catches unpaid invoices, chargebacks and short pays before they become losses.
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What it is
Factoring reconciliation means matching the money a factoring company advances, holds in reserve, releases and deducts in fees back to the invoices you sold it, and proving that your ledger agrees with the factor's statement. It keeps revenue recorded in full, shows the true cost of factoring, and catches unpaid invoices, chargebacks and short pays before they become losses.
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What you get
Every advance, rebate, fee and chargeback matched to its invoice
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How it runs
Factor account reconciled to the factor's statement each month
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Discovery call
A 20-minute call to map your factor, recourse or non-recourse terms, advance and reserve structure, fee schedule, and which invoices are factored and which are not.
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A named accountant, a backup and a team lead
Inside your own software, on a fixed close calendar, with a reply from a person within 1 business day. Call +1-657-777-0006 or start a quote.
Get a custom quote 06 / 06
Who it is for
Trucking and freight carriers
You factor broker invoices to keep fuel and driver pay flowing. Advances, reserve releases and fees land in the bank in lumps, and the books show cash, not revenue by load.
Staffing and contract labor firms
Payroll runs weekly but clients pay in 45 days, so you factor. You want each client invoice tracked through the factor to payment, with fees and rebates in their own accounts.
Owners who rely on the factor's portal
The portal shows what the factor says you are owed. You want your own ledger to show the same number, reconciled and explained, for lenders, your CPA and yourself.
What's included
- Invoice schedules submitted to the factor captured against each invoice
- Advances posted to the correct invoices, with the reserve tracked separately
- Reserve releases and rebates matched to the invoices they close
- Factoring fees, discount charges and wire fees posted to their own accounts
- Chargebacks, recourse returns and short pays identified and posted
- Non-factored invoices kept apart and followed up in your name
- Broker and customer payments to the factor tracked to invoice closure
- Fuel card, advance and equipment deductions netted by the factor reconciled
- Monthly factor account reconciliation to the factor's statement
- Revenue recorded gross with the cost of factoring shown as expense
- Aged report of invoices open at the factor by broker or customer
- Monthly factoring cost summary as a share of revenue factored
Deliverables and KPIs
| Deliverable | KPI we report | Cadence |
|---|---|---|
| Factor account reconciliation | Ledger balance ties to the factor's statement with every difference explained | Monthly |
| Advances and releases posted | Every advance and reserve release matched to invoices within 2 business days | Weekly |
| Fee and chargeback log | Every fee, rebate and chargeback posted with the invoice reference | Weekly |
| Open-at-factor report | Aged list of invoices unpaid at the factor by broker or customer | Monthly |
| Factoring cost report | Total fees as a percentage of revenue factored, month on month | Monthly |
| Non-factored AR follow-up | Every non-factored invoice past due actioned within 5 business days | Weekly |
KPIs are what we measure and report, agreed per engagement. Service-level commitments are set in your agreement.
How it works
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Discovery call
A 20-minute call to map your factor, recourse or non-recourse terms, advance and reserve structure, fee schedule, and which invoices are factored and which are not.
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Portal access and ledger review
You grant accountant access to your ledger and read-only access to the factor's portal and bank feed. We review how factoring has been recorded so far and hand you a cleanup plan within 48 to 72 hours.
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Dedicated accountant assigned
A named accountant, a backup and a team lead set up factor, reserve and fee accounts, clear the historical difference, and begin weekly posting from schedules and remittances.
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Weekly posting and monthly reconciliation
Advances, releases, fees and chargebacks are posted weekly. Each month the factor account is reconciled to the statement under our Two-Tier Review and you receive the cost and open-invoice reports.
Software we work in
How much does factoring reconciliation cost?
Factoring reconciliation is priced as a flat monthly fee based on the number of invoices factored each month and the number of factor and bank accounts involved, or bundled into a bookkeeping engagement. There is no setup fee and engagements run month-to-month. Pricing depends on volume and scope, so we send a custom quote within 1 business day.
What moves the quote
- Invoices factored per month and the share with chargebacks or short pays
- Number of factors, bank accounts and fuel-card programs to reconcile
- Whether historical months need to be rebuilt first
- Whether non-factored AR follow-up and bookkeeping are included
Market benchmarks
| Market | Typical range | Source |
|---|---|---|
| US | Outsourced bookkeeping $150 to $1,600 per month; dedicated offshore accounting staff $8 to $35 per hour all-inclusive | indinero (Jul 2026); Madras, Acculink, Rose Talent (2026) |
| Canada | Outsourced bookkeeping C$300 to C$2,000 per month; most SMBs C$400 to C$800 | Outsource Bookkeeping CA, TheAccTaxCo (2026) |
| US | Catch-up bookkeeping $200 to $500 per back month where factoring history needs rebuilding | John Galt Finance (2026) |
Third-party ranges for orientation, not our prices.
Get a custom quote No setup fee. Month-to-month.
Factoring reconciliation for your industry
Security and compliance
- Read-only factor portal and bank feed access; we never move money or submit schedules
- MFA on every login, least-privilege access and a per-client access log
- NDA per engagement, background-checked staff, no local downloads of load or customer data
Full control list on the security page and country rules on the compliance page. Certifications are listed only when held.
Frequently asked questions
How much do factoring reconciliation services cost?
Pricing depends on volume and scope, and we send a custom quote within 1 business day. As a market reference, US outsourced bookkeeping runs $150 to $1,600 per month (indinero, 2026), and catch-up work to rebuild factoring history runs $200 to $500 per back month (John Galt Finance, 2026). Most carriers bundle factoring reconciliation into a monthly bookkeeping engagement.
Why does factoring make the books hard to read?
Because the factor pays you in pieces. An advance arrives when the invoice is sold, fees are deducted, the reserve is released later when the customer pays, and chargebacks come back if they do not. Recording those deposits as revenue understates sales and hides the cost of factoring. Reconciliation puts each piece back against the invoice it belongs to.
How do you record factored invoices in QuickBooks Online or Xero?
The invoice is recorded at full value as revenue and receivable. When the factor advances, the receivable moves to a due-from-factor account, the advance hits the bank and the reserve stays due from the factor. Fees post to a factoring expense account, releases clear the reserve and chargebacks reopen the receivable. Your CPA sees revenue gross and fees separately.
Which factoring companies and portals do you work with?
Any factor that provides a portal, schedule confirmations and statements, including the freight factors commonly used by carriers and the general factors used by staffing and manufacturing businesses. We work from your portal login with read-only access and never submit schedules or request advances on your behalf.
Do you handle fuel cards and other factor deductions?
Yes. Many factors net fuel-card balances, equipment advances or insurance down payments against reserve releases. Each deduction is posted to its own account and reconciled to the fuel or advance statement, so the reserve release is explained line by line rather than lumped into revenue.
What about invoices the factor rejects or charges back?
Rejected schedules stay as normal receivables and are followed up in your name through our accounts receivable service. Chargebacks under recourse terms reopen the receivable and go on a weekly list for follow-up with the broker or customer. Both appear on the monthly open-at-factor report so nothing is quietly lost.
Can you rebuild past months where factoring was recorded wrongly?
Yes. We start with a catch-up project that rebuilds the factor, reserve and fee accounts from portal statements and bank deposits, month by month, until the ledger ties to the factor's closing balance. The result is handed to your CPA with a schedule showing the corrections. Ongoing reconciliation then keeps it tied.
Do you also handle driver settlements and broker invoicing for carriers?
Yes, through our sister brand TransportBPO, which handles dispatch-side billing, driver settlements and broker invoicing for trucking, limo and taxi operators, with the books and factor reconciliation kept by the same LedgerBPO team. That way the settlement, the invoice and the factor remittance all agree.
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