Accounting Entries for Remittances

When you create a receipt that requires remittance to your bank, Receivables debits the Confirmation account instead of Cash. An example of a receipt requiring remittance would be a check before it was cashed. Receivables creates the following journal entry when you enter such a receipt:
DR Confirmation CR Receivables

You can then remit the receipt to your remittance bank using one of the two remittance methods: Standard or Factoring. If you remit your receipt using the standard method of remittance, Receivables creates the following journal entry:
DR Remittance CR Confirmation

When you clear the receipt, Receivables creates the following journal entry:
DR Cash DR Bank Charges

CR Remittance

If you remit your receipt using the factoring remittance method, Receivables creates the following journal entry:
DR Factor CR Confirmation

When you clear the receipt, Receivables creates a short-term liability for receipts that mature at a future date. The factoring process let you receive cash before the maturity date, and assumes that you are liable for the receipt amount until the customer pays the balance on the maturity date. When you receive payment, Receivables creates the following journal entry:
DR Cash DR Bank Charges CR Short-Term Debt

On the maturity date, Receivables reverses the short term liability and creates the following journal entry:
DR Short-Term Debt CR Factor