Kapwork Verify Launch: Free tools to automate invoice verification

The factoring industry processes over 28 million invoices in the US alone, accounting for an annual factoring volume of US $170 billion. As a factor, you need to track at least three events for every invoice you purchase: when it’s issued, verified, and paid. If you multiply this by the total number of invoices processed, that is at least 84 million events that US factors track manually, and yet, this accounts only for a fraction of all B2B invoices issued. [1]

For centuries, factoring has remained essentially unchanged. Challenged by back-office overhead, oftentimes significant credit risk, and an archaic distribution network, it mainly relies on third-party brokers and referrals from other factors. These characteristics have limited factoring’s market penetration to select industries such as transportation, staffing, and manufacturing, where the need for working capital is so acute that it justifies the high operational costs and cumbersome process.

That is why we are launching Kapwork Verify for free: to help factoring companies automate data extraction, authentication, and verification so factors can move money quicker, cut costs, and reduce risk. Our mission is to accelerate transactions between invoice sellers and buyers so that more businesses can access working capital.

Factoring company cost breakdown

The cost structure of factoring companies directly influences their profitability and competitiveness: higher operational efficiency can lead to lower costs and improved margins. Effective management of bad debt is crucial for long-term sustainability. The ability to optimize each cost category can significantly impact a company's financial performance and market position.

Why invoice verification matters

Invoice verification is a crucial process within a factoring operation. Relying solely on information provided by small and midsize businesses (SMBs) exposes factoring companies to significant fraud risks:

• Invoice duplication: SMBs may intentionally or unintentionally submit the same invoice multiple times, leading to double factoring.
• Invoice inflation: Businesses might artificially inflate invoice amounts to secure larger advances.
• Non-existent invoices: SMBs could create fake invoices for non-existent goods or services.

These risks make authenticating invoice records directly from debtors' systems crucial for factoring companies. However, today, it’s done manually, which adds significant cost to overall operations and percentage points to the cost of capital, given how long it takes to verify these invoice records literally by hand.

By implementing a direct verification system like Kapwork Verify, factoring companies can significantly reduce these operational costs and increase efficiency. For example, automating the verification process through integration with debtors' systems can reduce operational expenses by 15-20% of the total cost associated with invoice processing and verification.

“Kapwork saves on average 74 hours of manual labor for factors.” [2]

By doing this, we help factors improve margins and retain invoice sellers with attractive rates, while unlocking more funding opportunities from the almost +35 million SMBs [3] in the US alone!

Enter Kapwork Verify

To help factors deploy capital faster, minimize risk, and reduce operational costs, we’ve developed an automated platform that verifies all data directly from your debtors’ systems of record.

Kapwork Verify includes a free tier, giving factors the power to verify invoice records automatically. The system deploys intelligent agents that automatically retrieve, map, and verify the status of all relevant data in vendor portals. This automation delivers authenticated invoices, preventing fraud while minimizing overhead and saving valuable time. This free tier shows the immediate value of having Vendor Portal Agents automatically aggregate and centralize data from your invoice sellers' vendor portal accounts, giving you the most comprehensive and clear picture of their outstanding payments.

Key features

• 🎯 Goal-directed Portal Agents. You can configure agents to seek and retrieve all record categories from vendor portals. Kapwork offers agents that can retrieve:
  • Invoice data. Get complete invoice records, including issue dates, amounts, statuses, and payment history for a year or more.
  • Remittance details. Access payment confirmations, dates, and amounts, ensuring accurate reconciliation.
  • Scheduled payments. Track cash flow commitments and retrieve data on upcoming payment schedules, including due dates and amounts.
  • Purchase orders. Pull purchase order details, such as order numbers, quantities, and statuses, to verify the legitimacy of invoices against fulfilled orders.

• 📡 Scalable data retrieval. Instantly connect to thousands of portals with automated data extraction.
  • Support for thousands of vendor portals. Right off the shelf, the intelligent agents can extract and aggregate data from thousands of portals such as Ariba, iSupplier, and more.
  • Schedule Vendor Portal Agents. Configure agents to run on demand or on a schedule so you have verified records when you need them.
• 🛡️ Security and control. Maintain secure access and control over vendor portals, authentication, and data visibility.
  • Password management, 🔒 Maintaining access to vendor portals on behalf of invoice sellers is a hassle. With Kapwork, you can invite your invoice sellers to maintain their login credentials. Invoice sellers only see data relevant to their specific vendor portals.
  • Confidentiality and safety. Kapwork uses state-of-the-art encryption and safety protocols so your data remains secure.

🎁 Factors get up to 600 free credits per month. You sign up online, integrate with portals, and download all invoice records directly from the Verify dashboard.

Why invoice authentication matters

Direct verification from debtors' systems significantly reduces risks by providing an independent, authoritative source of invoice data. Kapwork Verify saves time and reduces risk by ensuring that factored invoices are legitimate and accurate.

Delays in authenticating invoices can also impact cash flow for factoring companies. If, for example, a factor verifies invoices once a week due to operational load, they are subject to:

• Cash drag: Funds remain idle while awaiting verification, reducing overall capital efficiency.
• Delayed deployment: Slower authentication processes delay SMBs' funding, potentially causing them to seek alternative financing options.
• Reduced scalability: Inefficient verification processes limit the ability to quickly onboard new clients and expand operations.

Manual invoice processing is a labor-intensive and costly process for factoring companies. It involves tasks such as data entry, verification, approval routing, and payment processing. Adobe indicates that the average cost to process an invoice manually ranges from $13.11 to $40 [4].

The benefits of fast and reliable invoice authentication are substantial. It reduces risk exposure by minimizing the window for fraud, improves trust by helping you strike a balance between invoice inquiries and pestering your customers, and enhances capital deployment.

Kapwork is building a more equitable business environment where companies of all sizes can access the working capital they need to grow. That starts with equipping factors with the right tools to streamline invoice-to-cash workflows and scale their impact.

Sign up to start using Kapwork Verify today

Want to learn more or share thoughts about this new approach? Let’s talk. We’re here to answer your questions and help you discover how Kapwork can help your business.

Thank you for joining us on this journey. We look forward to building a stronger, more connected world where small businesses can thrive.

Ready to explore Kapwork or have any questions? We’d love to hear what you think.