Automated Invoice Verification Logic Engine for Factoring Risk Assessment
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Solution Overview
Problem
Traditional factoring methods lack efficient analysis of individual invoices, particularly in large-scale transactions, where funding sources typically verify accounts receivable without examining each invoice individually, leading to potential risks and inefficiencies.
Innovation Solution
A system and method for factoring invoices that utilizes a distributed computing environment to automate the verification and management of invoices through an online portal, where clients input invoice information, and a logic engine performs automatic updates, accrues fees, and verifies delivery status, enabling more precise credit scoring and risk assessment for funding decisions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If manual verification of each invoice is performed, then accuracy of credit assessment is improved, but productivity and processing speed deteriorate
Solution Approach 1:
The patent replaces the manual mechanical verification process with an automated electronic system. The logic engine automatically retrieves invoice data from databases, verifies delivery status through electronic communications with customers and shipping companies, and performs credit assessments without manual intervention for each invoice, thereby maintaining accuracy while dramatically improving processing speed.
Solution Approach 2:
The system enables self-service verification where the logic engine autonomously collects and verifies invoice information by automatically communicating with customers, shipping companies, and internal databases. The system serves itself by performing credit assessments and delivery verifications without requiring manual human intervention for each individual invoice.
2Reliability
If individual invoice verification is performed, then reliability of factoring decision is improved, but loss of time increases
Solution Approach 1:
The patent replaces time-consuming manual verification with automated electronic systems that instantly retrieve and verify invoice data from databases, customer records, and shipping company systems. The logic engine performs credit assessments and delivery verifications automatically, maintaining reliable decision-making while reducing verification time from days to minutes or seconds.
Solution Approach 2:
The system performs preliminary verification by automatically checking invoice validity, customer creditworthiness, and delivery status before the factoring decision is made. The logic engine pre-retrieves all necessary information from databases and external sources, so that when a factoring decision is required, the verification is already complete, eliminating time delays.
3Productivity
If automated verification system is implemented, then productivity is improved, but device complexity increases
Solution Approach 1:
The logic engine serves multiple functions within a single system: it retrieves invoice data, verifies delivery status, assesses customer creditworthiness, performs factoring calculations, and communicates with various external systems. This multi-functionality consolidates what would otherwise require multiple separate systems into one unified platform, improving productivity while managing complexity through integration rather than proliferation of separate components.
Solution Approach 2:
The logic engine acts as an intermediary that standardizes communications between the factoring system and various external systems (customer databases, shipping companies, credit bureaus). By providing a unified interface and standardized data exchange protocols, the intermediary simplifies the overall system architecture despite the complexity of integrating multiple external systems.
4Ease of operation
If manual invoice verification is used, then ease of operation is maintained, but measurement precision deteriorates
Solution Approach 1:
The system performs self-service verification where the logic engine automatically retrieves invoice data, verifies delivery status through electronic communications, and performs credit assessments without requiring manual human verification of each invoice. The automated system maintains operational simplicity by handling all verification tasks autonomously while significantly improving measurement precision through consistent, error-free data collection and analysis.
Solution Approach 2:
The patent replaces manual human verification with automated electronic systems that eliminate human errors in data collection and analysis. The logic engine systematically retrieves and verifies invoice information from multiple sources, ensuring consistent and accurate credit assessments without the variability and potential for error inherent in manual verification processes.
Data Source
AI summary
A computerized system and method for facilitating proposed factoring transactions between a funding source and a client in which the funding source advances funds to the client based on accounts receivable to the client by one or more customers on one or more invoices includes a computer program that receives instructions from a client to submit one or more invoices to a funding source for an advance of funds on accounts receivable on the chosen invoices and that provides access to invoice data to a funding source for determining whether the funding source will advance funds on the chosen invoices.