Factoring Companies Guidebook

Any invoices where the original invoice date is amended subsequently to a later date.

Concerns

The re-ageing of invoices can amount to the granting of extended credit, normally without our agreement, but can also be indicative of administrative difficulties at the Client. Both of which may lead to problems for us, not only on an on-going basis, but also in a gone-concern situation where we endeavour to collect-out. The deliberate re-ageing of invoices to obtain extended credit from us is a fraudulent act.

Identification

Monitor the ageing of the invoices and any requests from the Client to re-age previously assigned debt. This is more difficult to monitor in an undisclosed situation, but can be tackled by comparing the level of assignments in a month with the outstanding debt for the same month, from the sales ledger ageing report submitted by the client.

Track the movement in the sales ledger ageing from month to month e.g. it would be expected that the total of the debts outstanding in one month will fall into the following month with receipts deducted. If it were to increase, this could indicate re-ageing or potential fictitious invoicing.

Treatment

We should ensure that the reason for re-ageing invoices is clearly identified and that it does not amount to the granting of extended funding terms i.e. regardless of the invoice age, it should be funded for greater that the usually agreed terms. If an invoice has already been funded on the ledger for the agreed term and has been re-aged, it should be excluded and the facts reported.