Most factoring companies verify your invoices before giving you the advance. They verify an invoice in order to be certain that the invoice is accurate and does not have any problems. This process helps prevent accidental over-financing or financing invoices that have disputes.
Most factoring companies verify the following information:
- That the product/service was delivered
- That the product/service met your client’s expectations
- That the invoice amount is accurate
- That the due date is correct
The preferred method for verifying invoices is by email. Simply, your account manager sends an email to the accounts payable representative at your customer and gets the needed information. Since email doesn’t always provide quick results, invoices can also be verified by phone. In some instances, invoices can also be verified by fax, though that method is falling out of use.
Customer impact of verifications
It is recommended that you advise customers that invoices will be verified regularly as part of your quality assurance process. Be sure to emphasize that one of the objectives of this practice is to ensure that they are satisfied with your company. Framing it in positive terms helps obtain their collaboration. Your factoring company should be able to give you more information on how to best approach your clients.
Disputes and problems
Every so often, the verification process uncovers a problem. Often, problems occur if your client is not satisfied with the services or if there is a misunderstanding regarding expectations. Most factors inform you of issues immediately so that you can engage your customer and resolve the problem. Invoices that have disputes can’t be financed until the problem is resolved.
One last word of advice
The verification process is one of the most important points of contact between your clients and the factoring company. You should become familiar and comfortable with your provider’s verification processes before you sign on as a client. You should also consider that some clients may not agree or collaborate with the verification process. If that is the case, you may be better off not financing invoices for that particular client.
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