I don’t have a lot to write for this month’s edition; however, there are a few points of interest that I did want to share. Happy reading!
Did you know that you can reverse search debtor websites or even debtor email addresses by looking up the owners of those domain names? These are helpful to be sure you are receiving an independent verification from the debtor. After all, who owns the website where you are verifying the receivables? Where did that confirmation email come from? Was it from the debtor, or could it be from the client? I typically use Go Daddy to research this information.
On their home page, there is a domain search field where you can enter domain names or even try email address extensions (i.e., factoring.org). The site will tell you if that name is already registered. Then, you can just click on the link that says “Get Info” to see details on who owns that domain.
Why do we use the term ‘rely’ when we send out those written verification letters or when we pre-verify receivables? If you tell the debtor you are relying on the information they are providing to fund an invoice, then they know you only funded based on their response. This helps when pre-verifying invoices to ensure that the proper message has been conveyed. And, as a side note, if you verify an invoice after the fact, then you would not be relying on their information. That is why these post-funding calls are typically considered confirmation calls only.
What are some early warning signs and red flags to watch for during the verification or collection process?
- Credit memos, disputes, offsets start to increase
- Quality issues arise more frequently (i.e., incorrect product, damages)
- Debtor responses for verifications / collections decrease
- Key personnel changes at the debtor or client
- Clients picking up checks or changing factor remittance
- Average days to pay increases
- Payment patterns change
- Invoice receipt delays by accounts payable
- Billing errors increase
- Invoice dates vary (invoice date on invoice versus the date on the debtor’s check)
- Name changes on invoices or remittance (ABC Mfg Co now says ABC Company)
- Skipped invoice payments
Until the next time… Wishing you continued success. The Factor Guru.
