Payment Certification
Introduction
Supplier confirming is a type of financial service consisting of managing a company's payments to its national suppliers, and which includes for the creditor the possibility of collecting payments prior to their due date. Confirming is a payment management service for an organization's accounts receivable.
Definition
Confirming is a financial service offered by a financial entity (or private companies) in order to make it easier for its clients to manage the payment of their purchases. It is offered to pay invoices before their due date or to obtain financing from the bank that the supplier was not willing to grant, in this way, the relationship between client and supplier is not damaged and the client obtains the term they require. Its use is frequent in companies that have diversified suppliers, that wish to delay payment to suppliers or that have a complex payment system.
Confirming should not be confused with "confirmed payments" or "direct debit payments" that are less linked to the financial institution's responsibility for payment. Confirming is equivalent to a certified payment, with the difference that here the bank guarantees the payment to the supplier. In fact, it is reverse factoring, since it is initiated by the customer and not the supplier. Consequently, in English this service is called "reverse factoring")"[1] (and not, as one might think, cconfirming).
Confirming was developed in Spain in the 1990s and has spread throughout the world due to the international expansion of large Spanish banking entities, especially in southern Europe and Latin America.
Phases
First stage
The supplier delivers goods or services to the customer, documenting this transaction through an invoice.
From this moment, the client informs the financial institution about compliance with the invoice, the amount to be paid to the supplier and its expiration.