Patent Publication Number: US-2015066755-A1

Title: Resolution System Linking, Matching, Transferring, Paying and Netting Obligations

Description:
This U.S. Utility Application claims priority to U.S. Provisional Application Ser. No. 61/872,823 filed on Sep. 2, 2013, which is commonly-owned and incorporated herein in its entirety by reference. 
    
    
     BACKGROUND 
     Access to efficient financing for small and medium size businesses and consumers is an extremely rare process since the introduction of commercial and consumer lending. Although small and medium size companies represent half of the business economy, they have limited and often overpriced access to liquidity. Today, four banks control most of the deposits and loan portfolios in the United States. Limited competition allowed the banks to maximize margins on their loans by 1) focusing on higher creditworthy borrowers, which reduces their risk and the interest they pay to their depositors and creditors, and 2) increasing the amounts they charge on these loans much higher than capital markets&#39; pricing. This made lending to small and less creditworthy businesses uncompetitive, since any increase in lending risk increases the bank&#39;s interest costs and any further increase in charges on already overpriced loans is likely to increase loan defaults. Smaller lenders cannot fill the gap. Their inability to diversify with higher creditworthy loans dramatically increases their risk and funding costs. With the shape and structure of credit and bank consolidation, there is a significant need for a liquidity solution in the market that also gives an opportunity for liquidity providers beyond what is available today. 
     Consumers suffer from a similar lack of access to efficient amount and cost of liquidity. For example, although a consumer can save on interest in some cases by paying a monthly mortgage payment on a bi-weekly basis, any form of credit he or she obtains would outweigh the savings. Payments on credit cards and interest charges are always very high and an alternative short-term access to liquidity could be of significant benefit to consumers. 
     On the other hand depositors and investors lack good access to low risk investments that pays a good return in comparison to risk and liquidity. For example, money market returns are always close to inflation and for many years significantly below inflation. Savings accounts are similar in return and any alternative either significantly increases illiquidity (CDs, annuities, real estate, etc. . . . ) or significantly increases risk (longer termed bonds, high yield securities, preferred stock, etc. . . . ). 
     Therefore, it would be ideal to address a significant portion of the mentioned problems in a very efficient manner. There is no solution in existence today that provides solutions or is comparable in efficiency and economic benefit to the solutions from this new invention. 
     SUMMARY OF THE SUBJECT MATTER 
     An invoice resolution system is disclosed that includes: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database or repository stored on a medium for executing the executable code that collects the information for the at least one sales invoice and the at least one purchase invoice; and an executable code for intelligently determining an invoice Chain comprising at least one purchase invoice having a debit value and at least one sales invoice having a credit value and offsetting the debit value with the credit value to form an offset value. 
     Another invoice resolution system is disclosed that includes: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database stored on a network computer system that collects the at least one sales invoice and the at least one purchase invoice; and an executable code for intelligently sorting the at least one purchase invoice having a debit value and at least one sales invoice having a credit value to produce an invoice Chain and offsetting the debit value with the credit value. 
     A method for resolving invoice obligations is described and includes: providing at least one seller having at least one sales invoice, providing at least one customer having at least one sales invoice and at least one purchase invoice, producing an invoice chain by utilizing the at least one sales invoice and at least one of the at least one purchase invoice; and offsetting the at least one sales invoice of the seller with at least one sales invoice of the customer, at least one purchase invoice or a combination thereof to produce an offset value. 
     An economic value exchange and invoice resolution system is described that includes: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database or repository stored on a medium for executing the executable code that collects the information for the at least one sales invoice and the at least one purchase invoice. 
     An economic value exchange and resolution system is disclosed that includes: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database or repository stored on a medium for executing the executable code that collects the information for the at least one sales invoice and the at least one purchase invoice; and an executable code for intelligently determining an invoice Chain comprising at least one purchase invoice having a debit value and at least one sales invoice having a credit value and offsetting the debit value with the credit value to form an offset value. 
    
    
     
       BRIEF DESCRIPTION OF THE FIGURES 
         FIG. 1  describes the basic structure of a Chain, providing at least one Party  10  having at least one sales invoice  11 , providing at least one customer  20  having at least one sales invoice  21  and at least one purchase invoice  22 , producing an invoice Chain by utilizing the at least one sales invoice  21  and at least one of the at least one purchase invoice  22 ; and (1) offsetting the at least one sales invoice of the seller  31  with at least one sales invoice of the customer  21 , at least one purchase invoice  22  or a combination thereof. 
         FIG. 2  shows a contemplated embodiment, wherein System  101  comprises or, in the alternative, consists of a network of connections between Parties based on their obligations to pay each other any amounts at any time. 
         FIG. 3   a  shows an invoice Chain as described in  FIG. 1 , with the addition of an Agent  150 . 
         FIG. 3   b  is a continuation of  FIG. 3   a  and a combination of Chains similar to  FIG. 1  and  FIG. 3   a  using an Agent  300  to facilitate the direct or indirect combination of separate Chains. 
     
    
    
     DETAILED DESCRIPTION 
     A new system and related methods have been produced to enable a seller of services or products to use the economic value of the service or product, provided or sold, or to be provided or sold, to satisfy debt obligations on product, services or taxes owed, or receive early cash on that economic value. 
     An invoice resolution system is disclosed that includes: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database or repository stored on a medium for executing the executable code that collects the information for the at least one sales invoice and the at least one purchase invoice; and an executable code for intelligently determining an invoice Chain comprising at least one purchase invoice having a debit value and at least one sales invoice having a credit value and offsetting the debit value with the credit value to form an offset value. 
     Another invoice resolution system is disclosed that includes: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database stored on a network computer system that collects the at least one sales invoice and the at least one purchase invoice; and an executable code for intelligently sorting the at least one purchase invoice having a debit value and at least one sales invoice having a credit value to produce an invoice Chain and offsetting the debit value with the credit value. 
     A method for resolving invoice obligations is described and includes: providing at least one seller having at least one sales invoice, providing at least one customer having at least one sales invoice and at least one purchase invoice, producing an invoice chain by utilizing the at least one sales invoice and at least one of the at least one purchase invoice; and offsetting the at least one sales invoice of the seller with at least one sales invoice of the customer, at least one purchase invoice or a combination thereof to produce an offset value. 
     An economic value exchange and invoice resolution system is described that includes: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database or repository stored on a medium for executing the executable code that collects the information for the at least one sales invoice and the at least one purchase invoice. 
     An economic value exchange and resolution system is disclosed that includes: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database or repository stored on a medium for executing the executable code that collects the information for the at least one sales invoice and the at least one purchase invoice; and an executable code for intelligently determining an invoice Chain comprising at least one purchase invoice having a debit value and at least one sales invoice having a credit value and offsetting the debit value with the credit value to form an offset value. 
     Resolution systems are disclosed that include: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database or repository stored on a medium for executing the executable code that collects the at least one sales invoice and the at least one purchase invoice; and an executable code for intelligently determining an invoice chain comprising at least one purchase invoice having a debit value and at least one sales invoice having a credit value and offsetting the debit value with the credit value. 
     Invoice resolution systems are also disclosed that include: at least one sales invoice, wherein each sales invoice comprises a credit value, at least one purchase invoice, wherein each purchase invoice comprises a debit value, at least one database or repository stored on a network computer system that collects the at least one sales invoice and the at least one purchase invoice; and an executable code for intelligently sorting the at least one purchase invoice having a debit value and at least one sales invoice having a credit value to produce an invoice chain and offsetting the debit value with the credit value. 
     Methods for resolving invoice obligations include: providing at least one seller having at least one sales invoice, providing at least one customer having at least one sales invoice and at least one purchase invoice, producing an invoice chain by utilizing the at least one sales invoice and at least one of the at least one purchase invoice; and (1) offsetting the at least one sales invoice of the seller with at least one sales invoice of the customer, at least one purchase invoice or a combination thereof; (2) exchanging, transferring or assigning value or rights in whole or in part of one sales invoice of a seller, with another sales invoice of another seller and offsetting the at least one sales invoice of that seller with at least one sales invoice of that seller&#39;s customer; or (3) transferring or selling the economic value and or rights of at least one sales invoice of the seller to a third Party, which pays the obligation of the seller on the customer sales invoice. 
     A party, seller or customer, as used herein, means or can be a business; institution; organization; employee; contractor; non-profit, public or government entity; any natural person or legal entity with rights and obligations to receive and make payments; or any combination thereof. Sales invoice, as used herein, means any right of a Party to receive payment for any purpose from another Party (example a receivable, paycheck, etc.); Purchase invoice, as used herein, means any obligation of a Party to pay another Party (example, a bill, a tax, an IOU, a bond etc. . . . ) and invoice alone, as used herein, means either Sales invoice or Purchase invoice. Network computer, as used herein, means any computing device that can communicate data to another device directly or over a network of any sort, examples such as a computer over the Internet or a tablet over a mobile or local network. Database or repository, as used herein, means any method on a device that holds data. 
     Contemplated embodiments transform papers invoicing and physical cash transactions into electronic transactions and to allow access to liquidity for Parties owed an obligation prior to the obligation becoming due; to maximize the available liquidity to such Parties; to provide such liquidity without conventional methods of debt obligation; to provide economic incentives without credit risk to liquidity providers; to provide Agents as intermediaries of risk to expedite transactions; to provide economic value to Parties making payments on obligations in the regular course of business; and to minimize the efforts, actions and or cost of liquidity, maximize economic return on providing liquidity; minimize or eliminate credit risk from providing liquidity; and provide a system and method to achieve all the above that is not available and without which there is no efficient manner of achieving the purposes of the invention. The invention provides economic benefits that no existing alternative system or method can provide. 
     The result from the implementation of contemplated embodiments disclosed herein is to significantly increase access to investment returns while significantly reducing or eliminating risk; significantly increasing access to liquidity while reducing cost and maximizing efficiency and benefits. 
     Contemplated embodiments transform paper invoicing and physical cash into electronic transactions. Disclosed and contemplated embodiments use information from the sales invoices to link sellers and customers together into Chains of invoice credits and debits. These Chains can be organized in multiple fashions to allow the flow of a one-dollar payment at the beginning of the Chain to clear several dollars through the Chain. This is the result of netting the sales invoices of each seller with the sales invoices of each customer sequential or simultaneously in the Chain. Allowing one-dollar to clear multiple dollars of obligations. Multiple Chains of different sellers and customers can be linked through a third Party, transferring and/or purchasing the at least one sales invoice of the seller in one Chain, paying or netting the obligation of that seller on the customer sales invoice in that Chain; and if desired, using the proceeds when the purchased sales invoice of the seller is received or is part of the third Party Chain, using its value to pay or net the third Party&#39;s obligation in a new Chain. A Chain may consist of only one seller and one customer, or multiple sellers and customers. 
     One contemplated system and method involves the use of an intermediary agent to form and transact in invoice Chains. The agent (“Agent”) can be an automated matching system or a third Party that intermediates transactions between the Parties of a Chain. The Agent may also be a third Party that purchases, sells, assigns, transfers, transmits, control and/or act on behalf of other third Parties to pay, net, match, fulfill any obligation to a financial transaction or right to receive monetary value in the form of connecting third Parties together and providing non-cash methods in fulfilling such obligations, payments, credits or debits. 
     Another contemplated system and method comprises a computing system to which obligation and credit data is connected, uploaded, entered manually or integrated in any form usable by a computing system. The computing system will then use the information from these obligation and credit data to find statistical, cash flow, trade and other relationships that result in forming credit and debit Chain between two or more Parties, especially between multiple Parties in which one payment or equivalent of a credit value can net several other obligations belonging to several Parties as credit and debit counterparts within this Chain. 
     Another contemplated system and method comprises a computing system to obligation and credit data is connected, uploaded, entered manually or integrated in any form usable by a computing system. The computing system will then use the information from these obligation and credit data to form statistical, cash flow, trade and other relationships that result in forming credit and debit Chain between two or more Parties, even if there is no linear relationship linking the two or more Parties together in any normal flow of payment, credit or debit, as per the previously described system and method above. 
     Another contemplated method comprises a computing system to obligation and credit data is connected, uploaded, entered manually or integrated in any form usable by a computing system. The computing system will then use the information from these obligation and credit data to form statistical, cash flow, trade and other relationships that result in forming credit and debit Chain between two or more Parties, even if there is no linear relationship linking the two or more Parties together in any normal flow of payment, credit or debit, as per the previously described system and method above. Whereas, the system and method of the Agent can offer specific economic value for a credit or debit obligation to one Party to participate in a transaction that can only be available through the Agent since no such economic value can be obtained from an unrelated Party without the Agent. The unrelated Party is a Party that is not a direct creditor or debtor of another Party, which is offered an economic value related to an economic value of that unrelated Party. 
       FIG. 1  describes the basic structure of a Chain, providing at least one Party  10  having at least one sales invoice  11 , providing at least one customer  20  having at least one sales invoice  21  and at least one purchase invoice  22 , producing an invoice Chain by utilizing the at least one sales invoice  21  and at least one of the at least one purchase invoice  22 ; and (1) offsetting the at least one sales invoice of the seller  31  with at least one sales invoice of the customer  21 , at least one purchase invoice  22  or a combination thereof. 
     One contemplated embodiment is to use a cash payment  15  by a customer  10  on its purchase invoice  11  to pay purchase invoice  22  of customer  20  directly without the need for the cash on purchase invoice  11  to be sent to customer  20  first and then for customer  20  to pay seller  30  on it&#39;s sales invoice  31 . The process allow purchase invoice  22  to be netted and offset by sales invoice  21 . It also allows seller  30  to receive cash without customer  20  using cash from its deposit account. Assuming all amounts are equal and any partial amounts are made whole by other sales invoices with credit or cash from deposits or credit of the customer offsetting or making payment. 
     Sellers and customers of an invoice Chain are Parties as described above in the description section. An invoice Chain comprises any form of debt or debit owed for any purpose and any credit to be received for any purpose, including but not limited to, businesses doing business together or an employee owed hours of work using their economic value to make a mortgage payment. A Chain can include any number of Parties and branch into any number of Chains. In virtually every Chain, there are economic incentives exchanged between liquidity providers (such as payers using cash or the value of a receivable to pay or net the full or partial value of a payable) and liquidity seekers (such as Parties getting paid early on a receivable or receiving Agent or other financing). The economic incentives are communicated to Parties in the Chain ahead of a transaction of payment or netting taking place. These economic incentives can vary in amounts, forms and based on Business Rules. 
       FIG. 2  shows a contemplated embodiment, wherein System  101  comprises or, in the alternative, consists of a network of connections between Parties based on their obligations to pay each other any amounts at any time. The network is controlled and managed by centralized and decentralized computing devices running a software code and either directly or indirectly managing the processes of the invention. A contemplated system  101  allows participants to communicate with it through computer code or other means translated into computer code through manual or other input. Once a Party  100  decides to join the network, it can communicate through several means/methods  101  and be qualified to join based on a set of business rules, for example, providing identification information. 
     The Network Admission System  102  then approves the Party  100  to join or rejects it, with option to do so automatically or manually by one or more operators. The Network Admission System  102  also manages and organizes access to the System  101  for each User (i.e., a Party  100  interacting with a contemplated system  101 ). The Network Admission System  102  can run certain checks including relationships of the Party  100  joining or accessing the System  101  with other Parties, the data cloud  111 , and its data in the network. Any new or changed data is processed and updates data in the data  111  to be considered for processing  112  by the System  101 . The data cloud  111  comprises of centralized and decentralized databases, including, but not limited to, P2P in a form of grid computing and/or on System  101  computing devices, for example servers or specialized devices. 
     The data received  109  or pulled  109  from the Party  100  is then reviewed and validated  110  automatically and/or manually for authenticity, accuracy and other business rules in order to be usable by a contemplated system  101  for matching, obligation netting, credit and debit and payment transactions. Once usable data  110 , then it is considered along with the rest of the data in the Data Cloud  111  for netting and payments subject to business rules. The netting and payment process  112  find relationships between Parties and their obligations through their invoices, billing, loan obligations or other forms of payment or debt obligation or credit. These relationships form Chains  113  of credit and debit obligations connections and flow of economic value between the Parties. 
     A contemplated system  101  finds and forms these Chains using heuristics based on Business Rules, Business Rules are controls to manage the activities of the System  101 , for example, apply or waive a penalty on an overdue bill or interest rate cannot be below LIBOR. Each Chain at the time of processing  113  or post processing  113  would have economic value applied to each obligation or credit within it, such as a discount or premium, interest payment or receipt, fees or other forms of economic value in addition or subtraction to the obligation amount. This added or subtracted economic value is used to compensate liquidity providers and as a cost to liquidity recipients in the System  101 . Liquidity providers, recipients and added/subtracted economic value of the total obligation or credit amounts are all determined based on Business Rules. 
     A contemplated system  101  based on forming and sorting Chain based on Business Rules in process  113 , can determine automatically and/or manually whether to not include  114  or to include  115  an Agent  117  in processing the obligations and credit payments in the Chain. An Agent  117  is a third Party that can purchase, assign, be assigned, credit and debit obligations, such as a company factoring an invoice. 
     A contemplated system  101  will act as netting and clearing system, thus allowing transactions to occur in the Chains by using credit one obligation, including but not limited to, an invoice receivable or money owed on work hours for an employee to be used instead of cash or electronic cash transfer to make a payment and fulfill an obligation to another Party, such as paying a bill or a tax. 
     A contemplated system  101  can clear a Chain of obligations and credit by several methods, including but not limited to, (1) using cash payments made by one or more Parties in a Chain to fulfill the liquidity need of one or more Parties at the end of the Chain; (2) providing a Party or Parties at the beginning of Chain with economic incentives, such as a discount or interest income, to make a cash payment on an obligation in the Chain which can be used to clear a Chain as in (1) above; (3) netting obligations and credit of the Party(ies) in between the first Party(ies) in the Chain and the recipient(s) of liquidity at the end of a Chain(s), such as the Chain in (1) or (2) above; (4) using cash and netting to fulfill obligations and credit of the Party(ies) in between the first Party(ies) in the Chain and the recipient(s) of liquidity at the end of a Chain(s), such as the Chain in (3) above; (5) using an Agent as an intermediary to link two or more separate Chains, by assigning credit, selling credit and/or making payment on obligations as described in  FIG. 3 ; (6) a combination of all of the methods above. 
     A contemplated system  101  performs the methods based on Business Rules and optimization of balancing or favoring liquidity and other economic incentives, automatically and/or manually. Once the Chains to be netted and paid are decided  120 , all fees and economic incentives are added and deducted and the Chains are cleared  120  and any netted values and cash payments are completed  120  and reports to Party  122  as well as cash and incentives provided to Party  121 . The Party  100  receives the economic value for the Chains on its obligations and other Party(ies) obligation(s) to it. The change in any data of the Party  100  related to the System  101  is then shared  123 , as will as any User control decisions and data is communicated  124  to the System  101 . 
     All communication between the Party  100  and a contemplated system  101  occurs through the Data Communication Network  125  representing existing data, voice, transportation or mail networks in existence or in future development, including internet protocols, mobile wireless or postal systems among others. All computing devices, including but not limited to, servers and other system used by the System  101  shall include existing computer system, such as servers, pc, mac, tablets, phones, etc and future systems that replace them for data communication and processing. 
       FIG. 3   a  shows an invoice Chain as described in  FIG. 1 , with the addition of an Agent  150  (Agent described in the Description section above). The Agent  150  can act as a facilitator in initiating and/or completing a Chain or increasing the economic value and/or incentives in a Chain when needed or desired. Some methods involving the Agent  150  in a Chain of the invention are: (1) the Agent  150  can replace a payment  111  to be made by Party  110  in order to initiate the Chain of Parties  110  through  130  ( 111  to  122 ). The Agent  150  can do so by (a) purchasing, factoring or (b) lending against the sales receivable  121  of Party  120 ; (c) lending secured by other assets or unsecured; or (d) any combination of (a), (b) or (c); by paying  151  payable  131  equivalent amount, plus or minus, economic incentives to Party  130 . Agent  150  under condition (a) and (b) above then holds the rights  152  to receivable  121  and upon payment by Party  110  on Payable  111 , Agent  150  would receive the proceeds  153 , plus or minus, any economic incentives. Chains can be of any lengths, amount or date ranges among other variables. 
       FIG. 3   b  is a continuation of  FIG. 3   a  and a combination of Chains similar to  FIG. 1  and  FIG. 3   a  using an Agent  300  to facilitate the direct or indirect combination of separate Chains. Separate Chains can include any Chain where the first Party is three of more Parties removed from a recipient of payment in any Chain, whereas the payer and recipient can be, not exclusively, considered to be in separate Chains. 
     Some contemplated methods include that the Agent  300  pay  301  the payable  322  of Party  320  on its purchase invoice  322 , according to the methods of  FIG. 3   a  followed by offering and/or sharing economic incentives  306  offered by Party  370  with  307  Party  310 , which is usually linked but not always to specific receivables and payables, for example receivable  371  and payable  311 . 
     The economic incentives will be based on Business Rules and may include deadlines and amounts among other variables and conditions. Party  310  can decide to make cash payment  302  on payable  311 , which will go to or through Agent  300  (see  FIG. 3   a  for explanation) to pay  303 , in part or in whole, payable  362  to Party  370 . The Agent  300  intermediate such transaction because of owning or controlling the economic interest  308  in receivable  321  of Party  320  as explained in  FIG. 3   a . The Agent  300  is, in a similar fashion to  FIG. 3   a , provided funds or equivalent economic value to pay or offset payable  322  or provided funds or equivalent value to Party  320  in return for economic interest  308  in receivable  321 . Other methods may include combinations of the above with multiple Chains and Parties. 
     EXAMPLES 
     An employee of a public or private organization can use his/her earned or to be earned compensation to pay a mortgage payment on a weekly basis rather than monthly to save a considerable amount on interest and reduce total mortgage obligation. The Chain is the employee&#39;s employer, the employee and the mortgage holder. Another form is for employee to receive credit today to make the mortgage payment based on transferring the compensation he/she will receive in the future to the Party providing the credit. Achieving the same objective by introducing one more Party to the Chain. 
     Another example is a business getting liquidity to make payroll and payments due to third Parties. The business can use its sales invoices as a seller to satisfy, in part or in whole, purchase invoices as customer of another seller.