Verification calls: what your factor asks your customer

Verification is the step between submitting an invoice and getting funded, and it is the step that most often decides how fast the money arrives.

What the factor is confirming

• That the invoice exists in your customer's system.
• That the goods were delivered or the services performed, and accepted.
• That the amount is agreed and no credit or adjustment is pending.
• That there is no dispute, no return, no short pay.
• That the customer holds no offset against you.
• Sometimes, the expected payment date.

That last item is not idle. It feeds the factor's aging expectations and, on some structures, it feeds your fee.

Why it protects you as well

An invoice that would have been disputed is better found before funding than after. Once funded, a dispute becomes a chargeback, and a chargeback comes out of the cash you were expecting. Verification catches problems while they are still small: a wrong PO number, a missing signature, a delivery signed for by someone the customer says was not authorised.

It also catches your own errors, which is less comfortable and just as useful.

How it is done

What a failed verification costs, in days

The factor funds the verified $94,000 on Tuesday at 85%, which is $79,900, and holds the rest. You are $39,100 short of what you planned for that week, on a facility that is working exactly as designed. Nothing has gone wrong and nobody has done anything unreasonable — the timing simply depends on somebody else's inbox.

This is the reason question six below matters more than the others. If your business runs to a Friday payroll, a facility whose funding depends on third-party responsiveness needs either a fallback route — funding against a signed delivery document, a reduced advance pending verification, or a pre-approved customer list — or a buffer sized to a week of unverified invoices. Work out which you have before the first slow week rather than during it.

Asking the right questions before you sign

1. Who do you contact — the person I name, or whoever answers?
2. Email, phone or portal, and can I state a preference per customer?
3. How often — every invoice, first invoice only, or a sample?
4. What do you say, and can I see the script?
5. Do you record calls, and do you tell the customer that?
6. If verification fails or nobody answers, what happens to my funding?

Question six is the practical one. An unresponsive AP department can stall funding indefinitely, and knowing the factor's fallback — a second attempt, a signed delivery document as substitute proof, funding at a reduced advance — tells you how much risk sits with your customers' habits.

How to make it painless

The businesses that find verification intrusive are usually the ones whose paperwork forces the factor to keep asking. Tighten the documentation and most of the contact disappears.

The invoice-level fixes that remove the question entirely

1. Put the customer's purchase order or job number on every invoice, in the field their system actually reads.
2. Get delivery or completion signed by a named person, printed as well as initialled.
3. Match the description on the invoice to the description on the order, word for word where you can.
4. Send the invoice the day the work completes rather than at month end. An invoice checked against a fresh delivery is confirmed in minutes; one checked against a delivery six weeks old goes to someone's queue.

Each of those removes a reason for anyone to telephone your customer, which is the outcome you actually want.

When verification turns into something else

Two situations are worth recognising early, because both change how you should handle the relationship.

Neither is a reason to avoid factoring. Both are reasons to treat the first thirty days of a new facility as a documentation audit rather than a funding exercise.