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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Debtor verification

What is debtor verification in invoice finance, and why does it matter?

ONE OF 416 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

Debtor verification is a receivables financier confirming with a borrower's customers that invoices it has funded are genuine, for work or goods actually delivered, and that the customer accepts the amount and the due date. It is done by phone, email, letter or the customer's supplier portal, on a sample or on large and new invoices, and under confidential invoice discounting it is often done in the client's name so the customer does not learn of the financing. It is the main defence against invented or pre-billed invoices, so a financier treats a client who resists it, or whose contact details lead back to its own staff, as a warning.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// THE FULL PAGE

Debtor Verification: How a Financier Checks an Invoice →

The customer who owes the money is the only one who can say it does.

// WORKED IN

// NEXT TO IT

RECEIVABLES AND TRADE

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