My client has started invoice financing with HSBC. I have researched AW, the web and Sage and have worked out what seems to be best practice accounting system, using a dummy bank account.
My problem is that HSBC do not seem to maintain records that they can report to us that mirror the dummy bank account method. Their ‘Current Account’ receives value from our client invoices as they are raised, in addition to what I see as valid dummy bank account entries. Thus we cannot balance to this account as it effectively represents not just the cash position with HSBC but the sales ledger value.
We seem to have two alternatives. To plough on with what I see and read as best practice, and by downloading, then amending transaction listings (ie getting rid of the sales invoices) from HSBC, performing a reconciliation to that.
Or alternatively, posting ‘payments’ of client invoices to the (what now won’t be) dummy bank account. Thus clearing the client sales ledger before the customer has actually paid. HSBC maintain a good sales ledger record, so I can see that we can use that for control purposes. But this is not a system that is recommended by anybody that I can find.
I’m sure this is straightforward when up and running, but I don’t want to set the client off on the wrong track if anyone can advise please?