Understanding the True Sale and Accounts Receivable (AR) Invoice Workflow

The platform supports two types of financial structures - prepayment and true sale (including AR finance) . Based on the selected structure, invoices follow a different workflow. If you need to learn more about the differences between the structures, please refer to the following page - Understanding Legal structures .

This page covers the high-level workflow of a true sale and AR structure and provides several example structures.

Generic True Sale and AR Invoice Workflow

The process flow below outlines main steps of a generic true sale and AR invoice workflow. Below the flow you can find the description of each step and links to the respective knowledge base articles that explain the step in more details.

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 reverse factoring true sale transaction (assuming the Seller uploads the invoice).

	Step	Deadline (ideally completed earlier)	By Whom
1	Invoices uploaded	7 days before the Last Funding Date	Seller
2	Invoices confirmed	6 days before the Last Funding Date	Buyer
3	Invoices reviewed and approved by Funder (“Maker”)	5 days before the Last Funding Date	Fund Manager
4	4 eye approval of invoices uploaded (“Checker”) - step not always required	5 days before the Last Funding Date	Fund Manager
5	Risk approval of invoices uploaded (“Risk Maker”) - step not always required	4 days before the Last Funding Date	Fund Manager
6	4 eye Risk approval of invoices uploaded (“Risk Checker ”) - step not always required	4 days before the Last Funding Date	Fund Manager
7	Seller notified that invoices are eligible for sale	3 days before the Last Funding Date	FinverityOS
8	Seller sells invoices on the Platform	3 day before the Last Funding Date	Seller
9	Fund Manager notified of the invoices to fund	Funding Day before Last Funding Date	FinverityOS
10	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

Every true sale and AR invoice follows the following phases and steps:

Invoice upload:

The seller delivers goods to the payer (buyer) and issues an invoice for payment. The seller uploads the invoice to the platform.
More information - Uploading Invoices as a Seller

Invoice approval and submission for funding

Depending on whether the facility is disclosed or not, the payer may or may not be involved in the approval process. Portal Administrators can configure this setting via Admin Portal, for more information refer to Filling in Payer Company Details .

If the facility is not AR: After being notified by the system , the payer approves the invoice and accepts the irrevocable payment undertaking (IPU). More information - Confirming Invoices as a True Sale Payer
If the facility is AR: The payer is not notified or involved via confirming invoices.

After being notified by the system, the funder approves the invoice through all stages of the invoice workflow.
More information - Confirming and Risk Approving Invoices
After being notified by the system , the seller sells the invoice. When selling the invoice, the seller accepts the system generated order form and reassigns receivables.
More information - Selling Invoices

Invoice purchase

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 payer outside of the platform.
The funder transfers the amount that equals the invoice's selling price to the seller outside of the platform and retains the IPU.
The seller receives the payment outside of the platform.

Repayment and reconciliation

On repayment date, the payer generates the repayment reference.
More information - Generating Repayment Reference
The payer repays 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 - True Sale Discount, No extension

Terms and Extension of Maturity

Invoice Term	45 days
Invoice Term + Max Extension	45 days (45 days + 0 days)

System Setup

Tenor (Max Financing Period)	40 days from purchase date
Max Extension	0 days after maturity
Funding Window	8 days (inclusive date range)
Earliest Funding Date	40 days before maturity
Last Funding Date	35 days before maturity
Advanced %	100%
Fee paid by Payer %	0%
Fee paid by Seller %	100%
Fee paid in Advance %	0%

Process

Invoice upload

Day 1: The seller (supplier) delivers goods to the payer (buyer) and issues an invoice for payment on 45-day terms. The seller uploads the invoice to the platform.

Invoice approval and submission for funding

Days 2 - 5: The payer approves the invoice and accepts the irrevocable payment undertaking (IPU).
Days 2 - 5: The seller sells the invoice on the platform and requests immediate payment at a discount .

Invoice purchase

Days 5 - 10: The funder remits the discounted invoice face value to the seller.

Repayment and reconciliation

Day 45: The payer repays 100% of the invoice face value plus the service fee to the funder.
Day 45+: Remits platform fee to the platform owner.

Example Workflow - True Sale No Discount, 45-day extension

This transaction is a slight variation on a standard true sale SCF trade in that the funder pays 100% of the face value at the actual payment date or at least within a 7-day funding window of the original invoice, as opposed to a discounted amount at the date of issuance. Each invoice has wording that allows this to happen.

Terms and Extension of Maturity

Invoice Term	45 days
Invoice Term + Max Extension	90 days (45 days + 45 days)

System Setup

Tenor (Max Financing Period)	51 days from purchase date
Max Extension	45 days after maturity
Funding Window	7 days (inclusive date range)
Earliest Funding Date	6 days before maturity
Last Funding Date	0 days before maturity
Advanced %	100%
Fee paid by Payer %	100%
Fee paid by Seller %	0%
Fee paid in Advance %	0%

Process

Invoice upload

Day 1: The seller (supplier) delivers goods to the payer (buyer) and issues an invoice for payment on 45-day terms. The seller uploads the invoice to the platform.

Invoice approval and submission for funding

Days 2 - 44: The payer approves the invoice and accepts the irrevocable payment undertaking (IPU).
Days 2 - 44: The seller sells the invoice on the platform and requests payment.

Invoice purchase

Days 39 - 45: The funder remits 100% of the invoice face value to the seller, with payment extended to day 90 (45 days after maturity).

Repayment and reconciliation

Day 90: The payer repays 100% of the invoice face value plus the service fee to the funder.
Day 90+: Remits platform fee to the platform owner.

*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.