Releasing reserves is a vital step in the factoring lifecycle, ensuring that vendors receive the remaining balance of their invoices after fees and risks are accounted for. In SOFT4Factoring, this process is streamlined and connected to your daily operations and payment flow.

1. Understand What Reserve Means in Factoring

• A reserve is the withheld portion of an invoice payment held back by the factoring company as a safety net.

• Once the debtor pays and all fees (commissions, interest, etc.) are billed, the reserve—minus any deductions—is released to the vendor.

  
  

2. Prepare the Invoice for Reserve Release

• Start with an invoice that has:

  • Advance disbursed

  • Upfront commission billed

• Before releasing the reserve, make sure interest has been invoiced, since it may affect the final reserve amount.

  
  

3. Invoice the Interest

• Open the relevant invoice.

• Click Process → Invoice Charges.

• In the popup, select “Interest” as the charge type.

• Check Post Created Invoices and click OK.

Note: Depending on your factoring product setup, interest may be deducted from the reserve or billed separately. In this example, interest is invoiced separately, so the Reserve Outstanding remains unchanged.

4. Open the Payment Journal

• From the Main Page, go to Daily Operations → Payment Journal.

• This is where all outgoing vendor payments—including reserve releases—are recorded and tracked.

  
  

5. Use “Suggest Vendor Payments”

• Click Suggest Vendor Payments to automatically pull in:

  • Eligible invoices

  • Reserve release amounts

• The system matches the reserve amount based on your factoring agreement.

  
  

6. Post the Reserve Release

• Review the journal lines to confirm amounts and agreements.

• Click Post to complete the reserve disbursement.

  
  

7. Verify the Invoice Status

• Return to the Main Page and go to Archived Invoices.

• The invoice will now appear here—this confirms that:

  • All payments have been received

  • All charges have been invoiced

  • The reserve has been released

    
    

8. Double-Check Reserve Values

• Open the original invoice.

• The Reserve Released field will now show the disbursed amount.

• The Reserve Outstanding should display zero.