One important aspect of the due diligence verification process of funding accounts is making sure there are no outstanding commitments are hanging out between our client and their customer. Particularly if we are getting involved an existing relationship with a customer. But it may also be a consequence of negotiations that are going on that the factor is not privy to.
When a factoring company finances an invoice, making an advance on the forthcoming payment, there needs to be an assurance that no prior arrangements were made in the form of credits that might get applied to the payment. The amount of the invoice submitted for funding should match the payment.
If there is any question, this may require the customer in certain situations to sign off on the invoice stipulating that they have no intentions of deducting anything from their payment such as credit for work uncompleted or products that have not been delivered.
Verifying each account with the customer is integral to the overall factoring processing. The verification can be handled as expeditiously as possible without unnecessary complications.