Invoice Verification as an enhanced service to the usual collection activities which Import Factors are offering upon request to Export Factors in the Two-Factor scheme. This is a service which makes the best practices of many existing IFs consistently and widely available.
Invoice Verification will serve Export Factors (EFs) with a higher level of comfort prior or after to their providing of finance to Exporters and reduce the risk of fraud and disputes resulting from the assigned receivables. For IFs, it is a tool to reduce buyer risks and generate additional service income through greater confidence in a two-factor system. Occasional verification is already a part of FCI services and can be provided within the normal service charge as long as it is mutually agreed by the IF and EF. Where verification is frequent or intensive, the IF shall be entitled to charge a special commission or a handling fee for this add-on service.

Even though the verification of the Import Factor is not legally binding (as it is the case with invoice confirmation in Reverse Factoring), the main benefit of this service for Export Factors is the early detection of client fraud and commercial disputes. The early contact to the buyers will also help the Import Factors to reduce their risks and long-term costs.
The early contact to the buyer helps IFs reduce their risk and long term costs. This arises from securing prompt collection from the importer but also it helps the IF to identify any data affecting the buyer credit decision at an early stage. IFs can consider offering more frequent and detailed verification to EFs and thus strengthen their business. The charging structure introduced enables IFs to secure a revenue stream to compensate for any extra investment in staff and training.
The main benefit to EFs is prevention of fraud and the early detection of disputes so that the EF can build up appropriate reserves and clarify the matter with its client.
Although not very frequent, fraud is experienced in FCI two-factor international factoring. Invoice verification can help detect fraud early and may act as a deterrent. It also helps to identify weaknesses in the order/invoice cycle which will help to prevent or resolve disputes faster when they are identified.
Early contact with Importers gives an opportunity to establish the relationship with the Import Factor which can foster mutual understanding. In case of a commercial dispute Import Factor provides support to resolve it together with Export Factor and Exporter in an amicable way.
Invoice verification can build the trust of exporters in the FCI two-factor business and gives comfort to the exporter that the invoice has been received by the importer and is being processed in his accounts. However, verification does not guarantee anything. The importer can still raise dispute and delay payment. Early contact with buyer may give clues of a possible fraud, misconduct or intentional payment delay.
For this service FCI has developed specific trainings, standard messaging in Edifactoring (MSG 70 and 74) and clear mutual responsibilities and a dedicated manual (in the private library under Manuals and Guides: “FCI invoice verification guide”). It also offers the possibility for the Import Factor to charge a supplementary commission for this extra service when verification is on a larger scale or frequent