Invoice Factoring: Verification vs. Notification

The invoice funding experts at PRN Funding are frequently asked: When it comes to invoice factoring, what is the verification process, and what it the notification process? Watch this video to find out:

Invoice Factoring Notification Procedures

At some point in the beginning stages of a factoring relationship, the invoice¬† funder will communicate with your clients’ accounts payabale department in order to make them aware of the new factoring relationship as well as give instructions on where to send future payments. This can usually be accomplished with a quick phone call and/or email. In most cases, the factor will send a written notification via fax or email to re-affirm what was discussed over the phone.

Invoice Factoring Verification Procedures

Verification procedures differ depending on the funder and depending on the type of business you operate.

For example, if you run a medical supply company, a good way for a factor to verify the invoices is to view a copy of the signed delivery receipt and/or speak to the person who accepted the shipment to confirm that they are satisfied with the supplies.

On the other hand, if you own a nurse staffing agency, where you are, in effect, providing a service, rather than a concrete good, the verification process will be slightly different. Most likely, factors will verify invoices with signed timesheets and/or periodically speak with a Director of Nursing (DON) at the facility where you staff to confirm the nurses listed on your invoices worked the shifts listed on the invoices.

Some factoring clients are concerned that a factoring firm who notifies and verifies will become hurt their vendor-customer relationship, the opposite is true.In most cases, notification and verification procedures are brief and non-intrusive.

Do you have more invoice factoring questions? Feel free to write them in the comments section below…