Verification

The overall process of confirming invoice, delivery, and payment obligation details.

Why it matters

Verification requirements differ by industry. Trucking may require a signed bill of lading; staffing requires approved timecards; energy services requires field tickets. The verification process is the factor primary check against invoice fraud—a customer who disputes, cannot be reached, or refuses to confirm the invoice may cause that invoice to be held or rejected. Some factors perform verification through an outbound call to the customer; others use an online customer portal or accept documentation in lieu of direct contact. Verification delays are among the most common causes of same-day funding failures.

How it appears in contracts

Factoring agreements specify what constitutes successful verification in the Eligible Receivables or Verification section. Some programs require pre-funding verification; others fund in advance and verify within a specified window. If verification fails after funding, the agreement defines the outcome: typically either the invoice is held in reserve until resolution, or the seller is required to repurchase. Factors may maintain records of verification results, and disputed verification outcomes between the factor and a customer can become the basis for a chargeback if not resolved.

Related terms

Related article: What is invoice factoring?

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.