Invoice Verification

Since factoring companies depend on third parties (your customers) to make payments, a portion of their daily work focuses on checking customer credit, confirming invoices, and keeping tabs on payments.

It’s understandable that some business owners feel uneasy about a factoring company reaching out to their customers, but it’s a necessary part of the process. The good news is, when done professionally, those communications can be handled in a way that feels almost invisible to your clients.

You can help cut down on how often your factoring company needs to reach out to your customers by making sure you’re invoicing and supporting paperwork is complete, accurate, and up to date. The more solid documentation you provide, the more confidence the factor will have in funding based on a review of the supporting documents. Let’s face it, it’s simply not possible to reach every customer every time an invoice is submitted.

That said, it’s pretty rare for a factoring company to never want to call your customer, some level of verification is almost always part of the process.

There are essentially three forms of verifications or combination thereof used by factoring companies routinely:

Phone Calls to Customers

Many factoring companies will actually call on behalf of your business to verify invoices, without identifying themselves as the factor. This helps avoid introducing a third party into the mix, which could confuse your customer. When the factor has solid documentation, they can verify the invoice quickly and wrap up the call in less than a minute.

These days, a lot of larger companies have online vendor portals where you can view open invoices. Giving your factor access to that information makes their job much easier and speeds things up for you.

Support Documentation Review

If fast funding is what you’re after, make it easy for your factoring company. Provide complete, clear, and signed supporting documents, things like proposals, contracts, purchase orders, delivery receipts, or timesheets. Remember, factoring companies only make money when they buy invoices, so they’re just as motivated as you are to keep things moving.

Written Confirmation

Since it’s not always easy (or quick) to reach someone live, email can be just as effective, sometimes even better. A clear, concise message can confirm invoices, open balances, payment details, and remittance info in one shot. Plus, with email, you avoid the back-and-forth or missed questions that can happen over the phone.

The method of verification whether it’s reviewing documents, making a call, sending an email, checking a vendor portal, or some combination usually depends on the account’s performance, the industry, and how much funding is on the line.

Enhanced Customer Service

Verification isn’t just about checking boxes; it’s often an early warning system. Many factoring account managers build solid relationships with their clients’ customers, and during a verification call or email, they might catch wind of an issue before it turns into a payment problem. Getting that heads-up early gives you a chance to fix things before non-payment ever becomes a concern.

Factoring companies aren’t looking to overcommunicate with your customers, their job is simply to confirm invoices, open balances, and remittance details. That’s it. Their ideal outcome is straightforward: the invoice gets paid on time, just like normal.

A lot of people mistakenly associate factoring with collections, but that couldn’t be further from the truth. Factoring companies only purchase performing invoices, meaning ones that are expected to be paid within terms. They’re not in the business of chasing down overdue accounts, and they definitely can’t make customers pay faster. They’re not magicians, they just want clean, verifiable invoices that fund smoothly and pay as agreed.