How to track daily ACH collections against individual deal balances in QuickBooks

MCA funders collect hundreds of daily ACH payments from merchants. Without per-deal tracking, delinquencies hide and the P&L reports the wrong numbers. Here is how to fix it.

An MCA funder we work with closed 14 deals in a single quarter and deployed $740,000 in advances. By week six, the bank feed had over 200 ACH line items sitting unreviewed. Most said “ACH DEBIT” and a dollar amount. At month-end, the bookkeeper categorized everything under a single “collections” account and moved on. Two merchants had stopped paying three weeks earlier. The funder found out when the processor flagged the accounts.

What ACH collections actually represent

Daily ACH payments from merchants are not revenue. They are repayment of an asset. The advance the funder deployed is a receivable, that is, money owed to you, from the day it funds. Each daily payment reduces that receivable. The difference between the funded amount and the total owed back (RTR, or the full repayment amount) is factor income, and it accrues as payments arrive, not on the funding date.

When collections are recorded as a single line item without deal-level detail, the funder cannot see which merchants are current, which are behind, and where defaults are building. That information cannot be recovered from a bank feed after the fact.

Why deal-level tracking breaks down

ACH descriptions don’t identify the deal. Banks display whatever string the processor sends, usually a short merchant abbreviation or a generic transaction code. “ACH DEBIT $312.50” can match four different merchants on the same day. Without a process that ties each payment to a specific deal number, reconciliation becomes a manual exercise with no audit trail at month-end.

Factor income is booked on the wrong date. A $70,000 advance at a 1.4x factor produces $28,000 in income spread over the life of the deal. Many bookkeepers book the full $28,000 on the day the advance goes out. That overstates income in the month the deal funds, understates it during the collection period, and gives the funder a Profit and Loss report (P&L) that tells the wrong story at every point between those two dates.

No sub-ledger exists per deal. Most funders maintain one receivables account for the entire portfolio. They see a total outstanding balance but not per-deal balances. A merchant who has missed six payments looks identical to one who is perfectly current because both belong to the same account.

Missed payments have no home in the records. When a daily ACH returns, the bank feed shows a fee and a reversal. Without a deal-level record, there is no place to mark that payment as missed. The delinquency exists only in the processor system, invisible to the books.

A deal tracked properly

A $60,000 advance at a 1.4x factor. The merchant owes $84,000 back at $300 per day. Here is what the first week looks like in the books.

Date	Payment received	RTR balance remaining	Status
Funding day	$60,000 advanced	$84,000	Open
Day 1	$300	$83,700	Current
Day 2	$300	$83,400	Current
Day 3	$0 (return)	$83,400	Missed
Day 4	$300	$83,100	Current
Day 5	$0 (return)	$83,100	Missed x 2

A funder with this table visible on day five can act. A funder relying on an aggregate collections balance cannot.

Why this matters

Three problems develop when deal-level tracking is absent.

Early defaults stay invisible. By the time a problem shows up in the portfolio-wide receivables balance, a merchant may be 30 or 45 days behind. Intervention at missed payment three, a modified daily rate or a short deferral, costs little. Intervention at missed payment 20 usually means negotiating a settlement on a balance that has already deteriorated.

The P&L overstates early performance. A quarter with heavy new deal origination looks more profitable than it is if factor income is recognized on the funding date. When a lender or investor reviews the books between period-ends, that mismatch is one of the first things they notice.

Reserve calculations require per-deal payment history. The loan-loss reserve calculation, the accounting standard that requires funders to estimate expected losses across the portfolio, depends on actual payment histories at the deal level. Funders who cannot produce a clean per-deal record cannot support a defensible reserve figure at audit.

What proper remittance tracking looks like

For MCA clients we work with, each deal has its own receivables sub-account from the day it funds. The advance is recorded as a receivable. Each daily ACH is applied to the specific deal it came from, matched using the processor’s daily settlement report. Factor income is recognized in proportion to payments received. On a 280-payment deal, each payment recognizes one two-hundred-eightieth of the total factor income.

At month-end, every open sub-account balance is totaled. That sum should equal the outstanding RTR on the processor’s ledger and the total receivables in the operating books. If those three numbers disagree, something was misapplied, and we find it before the period closes. Delinquency flags on the sub-account record are reviewed weekly. Two consecutive missed payments is a review trigger. Three is an escalation.

Best practices for MCA operators

Five practices that keep deal-level tracking working as the portfolio grows:

Create one receivables sub-account per deal, named with the deal number and merchant name. Close the account when the deal pays off or is written off. Do not let closed deal balances accumulate in the portfolio total.
Use the processor’s daily settlement report, not the bank feed, as the primary source for matching payments. Settlement reports carry deal identifiers. Bank feed descriptions do not.
Recognize factor income as payments arrive, spread evenly over the expected payment count. Booking the full factor income on funding day will produce a P&L that misleads at every point in the deal’s life.
Set a delinquency policy and apply it to every deal. Two consecutive missed payments is a reasonable review trigger. Document the review and its outcome in the deal record.
Write off uncollectable RTR balances on a defined schedule rather than carrying them as live receivables indefinitely. Leaving defaulted balances open overstates the portfolio and skews reserve calculations.

Three questions worth asking

If you are not certain how daily remittance tracking works in your current books, three questions to bring to whoever manages them:

Can you pull the current RTR balance for each open deal as of today, with the payment history behind it?
When a daily ACH returns, how long before that fact appears in the books, and who sees it?
Is factor income on the P&L recognized on the funding date or as payments come in?

If those answers are uncertain, the books are operating without per-deal visibility, and delinquencies are forming without any record of it.

Send us your last 30 days of processor settlement reports and a list of your currently funded deals. We will review how collections are being recorded, whether factor income timing is correct, and whether the outstanding RTR in your books matches your processor’s ledger. If there are gaps, we will tell you exactly where they are.