InFactor: XinFin's Hybrid Blockchain Use Case in Business Financing
One critical area where blockchain seems to have had the most impact or deployment is finance. Money is the fuel on which every home, business or government runs. However, there are certain times when a business falls short of funds to meet its short-term needs probably because of many slow-paying invoices from its customers. With Invoice factoring, invoices that are not due for payment until later dates can be leveraged for immediate funds. Due to problems posed by lack of access to Financers (Factors), unclear factoring agreement, and trust issues on finance-worthiness of the invoices, many businesses are unable to explore and benefit fully from invoice factoring. Infactor aims to address these issues with its platform.
InFactor is an online finance platform that assists businesses and suppliers to factor their unpaid invoices. Invoice factoring helps businesses to quickly access funds from an unpaid invoice to meet their short-term cash-flow problems and keep the business running smoothly. InFactor is leveraging on XinFin's Hybrid Blockchain and smart contracts to power this innovative solution that eliminates operational bottlenecks, insecurity, and lack of trust inherent in the process of traditional invoice factoring, thereby facilitating the transfer of unpaid invoice to the factoring company without hassle. InFactor provides the meeting place for the three parties involved in the factoring transaction; Buyer, Supplier (seller of account receivables), and Financer (the factor).
How to Use InFactor
InFactor streamlines the process of invoice factoring into quick and easy steps for the Buyer, Supplier and Financer. The steps involved in a successful factoring on the platform are provided below:
Step 1: Registration
To use the platform, users are required to create InFactor account as appropriate, whether as Buyer, Supplier or Financer.
Step 2: Login to Dashboard
Supplier logs in to their dashboard and clicks on ‘Create Request’ button to create new invoice. They are expected to fill appropriate information needed as regards the invoice such as contact name, contact details, images of the invoice and so on. Buyer can save these details for future modifications by clicking ‘Save Now’.
Step 3: Upload Invoice
Once done with the invoice creation, supplier can submit the invoice. The system uploads it to the blockchain and it becomes visible to the Buyer for approval.
Step 4: Buyer’s approval or rejection
The Buyer logs in to their account to verify the invoice by clicking on the appropriate button on their dashboard (‘approve’ or ‘reject’). Once approved by the Buyer, the status of the invoice changes to ‘Approved’ on the blockchain.
Step 5: Invoice Factoring Request
The Supplier can request invoice for factoring by clicking on ‘Factor Now’ button. The factoring request is transmitted to all the Financers on the InFactor Platform. The Supplier can then wait for interest from Financers.
Step 6: Financer Proposal
The Financer logs in to their dashboard to view and access the factoring requests. They can select any of the requests and either ‘reject’ or send ‘factoring proposal’. If interested, a factoring proposal containing necessary information such as interest rate, initial advance, terms and conditions, and other relevant files and details is sent to the Supplier.
The Supplier can accept or reject the proposal. If accepted the Financer pays initial advance of the invoice amount as contained and agreed in the proposal. When the Buyer fulfills payment of the invoice amount, the Financer completes the payment to the Supplier.
N.B: The Financer and Buyer are required to have sufficient funds in their XDC wallets on InFactor platform in order to settle payments. Transactions can be viewed and confirmed on the blockchain.
To watch a video demo of how InFactor works, click here
Final Thought
Invoice factoring is that seamless on InFactor for everyone. In essence, InFactor provides a technological solution which ensures that businesses do not suffer from cash crunch by effectively connecting the supplier with a third-party factor.
With InFactor, there is no time delay or cash crunch for businesses and suppliers as long as the factoring request is genuine.
For more information about InFactor and other use cases of XinFin Hybrid Blockchain and XDC utility token, click on
InFactor API
XinFin Website
XinFin Medium
Written by Yomi Oyesiji (Mexite)