Generic Prepayment Invoice Workflow

The detail of each step is outlined below. We recommend setting clear cut-off times for each party to complete their steps in order to ensure the invoices can be funded on time.

Here is an example of the key steps which need to be taken for invoice approval, and by when, for each party in a typical prepayment transaction.

	Step	Deadline (ideally completed earlier)	By Who
1	Invoice uploaded	7 days before the Last Funding Date	Buyer
2	Invoices reviewed and approved by Funder  (“Maker”)	6 days before the Last Funding Date	Fund Manager
3	4 eye approval of invoices uploaded (“Checker”)	6 days before the Last Funding Date	Fund Manager
4	Risk approval of invoices uploaded (“Risk Maker”) - step not always required	5 days before the Last Funding Date	Fund Manager
5	4 eye Risk approval of invoices uploaded (“Risk Checker ”) - step not always required	5 days before the Last Funding Date	Fund Manager
6	Funder notified of the invoices to fund	Funding Day before Last Funding Date	FinverityOS
7	Fund Manager funds sold invoices	Funding Day before Last Funding Date	Fund Manager
	Reconciliation Leg
8	Buyer makes repayment	Repayment Due date	Buyer
9	Fund Manager confirms that repayments have been received (i.e. checks bank account)	The same day the payment has been made by Buyer	Fund Manager
10	Fund Manager marks invoices as repaid on the Platform, limit is released	The same day the reconciliation has been confirmed	Fund Manager

Detailed Process

1. Invoice Upload

• The payer (buyer) uploads the invoice to the platform. The payer accepts the irrevocable payment undertaking (IPU) and submits the invoice for prepayment. The system generates the order form that details all the information related to the trade.
  More information - Uploading Invoices as a Prepayment Payer

2. Invoice Approval

• After being notified by the system, the funder approves invoices through all stages of the invoice workflow.
  More information - Confirming and Risk Approving Invoices

3. Invoice Prepayment

• Every morning the system purchases fully approved invoices that fall within the funding window. If the invoice is between the earliest and last funding dates, it is purchased.

• As soon as the invoice is purchased, the funder receives the payment instruction file and the funder order form.

• (Optionally) The funder collects transactional cash collateral and extension service fees from the payer outside of the platform.

• The funder remits the full invoice face value to the seller outside of the platform. The seller is not a party to the agreements and therefore should normally not be aware that the invoice is financed. When the funder pays the seller, the receivable is extinguished. The asset a funder retains is only the IPU.

• The seller receives the payment outside of the platform.

4. Repayment and Reconciliation

• On repayment date, the payer generates the repayment reference.
  More information - Generating Repayment Reference

• The  payer repays the IPU to the funder outside of the platform, optionally excluding the extension service fee.

• The funder receives the repayment amount.  The funder refunds transactional cash collateral to the payer outside of the platform if it was previously collected.

• The funder remits platform fee to the platform owner (aggregated and paid monthly).

Example Workflow - No Discount, 45-Day Extension

This example workflow shows the prepayment program with the 45-day payment extension. Prepayment setup doesn't usually include invoice discounting.

Terms and Extension of Maturity

System Setup

Process

*You can create different custom structures by using the pricing and additional settings in the payer onboarding pricing page. Let us know if there are specific structure examples you want us to add here.