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SAP Factoring Automation with EDI

Credit approvals from your factor, straight into SAP in minutes.

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Factoring Without the Paperwork

CONTAX uses EDI and standard SAP credit management to automate the factoring process, from the credit check to the transfer of receivables.

Selling receivables to a factor has been common practice for over a hundred years in industries such as textiles, apparel and wholesale distribution. So has the manual, paper-based work that goes with it: countless hours going back and forth between customer service, accounts receivable and the factor to run credit checks, communicate receivables and receive payment updates. EDI keeps SAP in sync with your factor, without the flood of emails and phone calls.

How It Works

The EDI 850 and 870 connect SAP and your factor at each step of order to cash.

  1. Order Created
    • SAP places the order on credit hold
    • An EDI 850 goes to the factor with the details it needs
  2. Factor Decides
    • The factor reviews the customer's credit
    • An EDI 870 comes back with the decision
  3. Approved
    • The 870 is translated to an IDoc
    • SAP lifts the credit hold automatically
  4. Rejected
    • The order stays on hold
    • Accounts receivable is notified right away

The Benefits

Approved in Minutes
Orders are approved and processed in SAP within minutes of the factor's decision
No Unapproved Shipments
Standard SAP credit checks and holds stop goods shipping to customers the factor hasn't approved
Pre-Approved or Per Order
Works for customers with standing approval and for those that need approval on each order
Your Existing SAP
Builds on standard SAP functionality you already own

Factoring Success Story

Apparel Company Automates Factoring

How an apparel company automated its factoring in SAP using EDI.

Download the Case Study

SAP Factoring FAQ

What is factoring?

Factoring is the sale of a company's receivables to a third party, the factor, which approves customer credit and collects payment. It is common in textiles, apparel and wholesale distribution.

Which EDI transactions are used with a factor?

The EDI 850 sends order details to the factor for a credit decision, and the EDI 870 returns the factor's response, which SAP uses to release or keep the credit hold.

Does this need custom development in SAP?

The solution builds on standard SAP credit checks and credit holds, with EDI connecting SAP to the factor.

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Automate Your Factoring

Tell us how you work with your factor today, and we'll show you how it works in SAP.

Contact Us SAP EDI Integration