Abstract:
A system and method are disclosed for billers and payers to manage accounts receivable for business-to-business payments using a third-party intermediary. The system enables billers to be paid faster and payers to delay payment, while also minimizing the risk of default to the intermediary. The advantages of the present system and method stem from direct authorization by the payer to the intermediary, a nonrepudiable commitment by the payer, and dual recourse for the third-party intermediary, without the need for explicit payment contracts between billers and payers.

Description:
The present application claims the benefit of U.S. provisional application No. 60/167,449, entitled “INVOICE CONFIRMATION AND FUNDING SYSTEM”, filed Nov. 23, 1999. 

   FIELD OF THE INVENTION 
   The present invention relates to a system and method for billers and payers to manage accounts receivable for business-to-business payments using a third-party intermediary. 
   BACKGROUND OF THE INVENTION 
   I. Introduction 
   Accounts receivable are handled today primarily using manual systems with fragmented processes and procedures surrounded by ad-hoc credit, uncollected finance charges, and inflexible terms. 
   The biller typically mails an invoice to the payer who responds by sending a check in the mail back to the biller. There is no specified date for the payer to authorize payment and then to pay. Payers typically pay around 30 days or so after receipt of invoice but there are no hard and fast rules. Some payers pay later, which leads to problems between biller and payers. Payers may not have the money at the time billers are insisting on payment, and sometimes this leads to comments such as “the check is in the mail” by the payer. Billers will frequently assess a finance charge if payment is not received within a stated time period, but this charge is usually not enforced. Collection procedures by billers usually involve phone calls and messages to payers and are unpleasant for both the biller and the payer, particularly where there is a client relationship at stake. 
   Some billers, in an attempt to collect receivables sooner, along with some payers who want a price discount, will agree to terms, such as 2% 10/net 30. This means the biller provides a 2% discount on the invoice amount if paid in 10 days, with no discount if paid in 30 days. Practically speaking, the biller usually does not receive funds within 10 days, given the time it takes to receive the check in the mail, make the deposit, and then have funds available, particularly for out-of-town checks. 
   II. Description of Related Art 
   At present, there are a variety of business-to-business payment systems to choose from, including: credit cards, factoring, the electronic funds transfer (“EFT”) system, the Trade Acceptance Draft (“TAD”) system, and electronic bill payment services. 
   A. Credit Cards 
   Some businesses take credit cards for payment by other businesses. The biller, in return for paying a discount percentage on sales (typically 2 to 3%) to the credit card company, gets cash in several days from the credit card company, while the payer typically has 20 to 30 days to pay the credit card company. Many companies, however, don&#39;t have or accept credit cards and some billers don&#39;t want to ask for credit card payment since it indicates they don&#39;t trust the payer. Furthermore, payers prefer the flexibility to delay payment past 30 days without a fee, which is not an option with credit cards. 
   For credit card companies, another drawback with credit cards is the lack of a nonrepudiable commitment by the payer to pay the amount of a bill to the intermediary (i.e., the credit card company) in the future. A nonrepudiable commitment is a promise by a promisor (e.g., a payer) to a promisee (e.g., a financial intermediary) to perform an act (e.g., to pay the intermediary) on a future date specified by a contract between them, where the promise cannot be denied unless the promise was obtained by fraud. In practice, there may also be a small window of time after the nonrepudiable commitment is made where the promisor can cancel the commitment, for example where the commitment was made by mistakenly activating the wrong button on a computer. The lack of a nonrepudiable commitment is also a major drawback for a biller because a payer can refuse to pay a bill to the credit card company, which may result in the biller experiencing a charge back and not getting paid. The present invention overcomes this drawback by having the payer sign an agreement with the intermediary in which he agrees to pay the amount of any invoice he directly authorizes the intermediary to pay, thereby eliminating the possibility of the payer later denying his obligation to pay the intermediary. 
   Yet another drawback of a credit card system is that if a payer cannot pay the third-party intermediary, the intermediary experiences a financial loss and/or must send the account to collection, which has a negative impact on the intermediary&#39;s revenue. The present invention overcomes this limitation by having billers sign a legally binding agreement in which they agree to pay the third-party intermediary the amount of an invoice if the invoice is not paid by the payer, which significantly reduces the intermediary&#39;s possibility of loss due to nonpayment of an invoice. 
   B. Factoring 
   Some biller businesses with significant short term needs for cash will use a factoring company to factor their accounts receivable. This means the business turns over all or a portion of its receivables to the factoring company in return for getting cash from the factor company. The amount of cash is based on the receivables amount less a discount percentage, typically in the 5% to 20% range based on the nature of the industry and the quality of receivables. The factoring company then also has the responsibility to collect on outstanding receivables, and this essentially places the factoring company in an adversarial relationship with the customer of the biller and the biller loses control of the customer relationship for receivables. 
   In the factoring system, billers are often required to sign up all their customers to a system in which another company does invoicing and serves as the collection agency to settle disputes regarding payment. The biller typically gets 75% to 80% of their invoice amounts up front and the remainder once the invoice is paid by the payer. Payers typically have 30 days to pay invoices. The factoring system is similar to credit cards in its limitations and shortcomings concerning the nonrepudiable commitment to pay an invoice. The payer does not make a nonrepudiable commitment to pay the third-party intermediary. 
   C. EFT 
   A few business-to-business payments are also conducted via electronic funds transfer using the Automated Clearing House (“ACH”), primarily recurring payments that are paid on a regular schedule and with an amount that does not vary over time. There are systems, which enable business-to-business transfers via the ACH. These systems primarily replicate payments mailed through the post office, with the advantage that payments are made on particular dates. These systems do not provide funding, nor do they provide an automated system for receivables management including automated invoicing, collections, and financing terms. 
   D. TAD 
   The TAD system, described in U.S. Pat. No. 5,694,552, is a financial process in which financial instruments called Trade Acceptance Drafts are bought and sold. Sellers endorse TADs, which are sent to a financial organization that purchases the TADs from the sellers. Once the financial organization purchases the TAD, the financial organization pays a major percentage of the purchase price to the seller. Unlike the present invention, where billers and payers sign payment agreements only with the third-party intermediary, in the TAD system buyers and sellers are required to execute bilateral agreements with all trading partners, which makes the system very cumbersome. Furthermore, with TAD, the intermediary does not directly receive the commitment to pay. Rather, the biller receives the commitment and transfers it to the intermediary. This adds to the cumbersome nature of the TAD system. 
   E. Electronic Bill Payment Services 
   With electronic bill payment services, members sign up to have their bills paid by a third-party intermediary system. Unlike the present invention, where payers are allowed a float in paying the amount of the bill to the third-party intermediary, in the electronic bill payment services collection from the payer and payment to the biller is simultaneous, i.e., the payer is not given a “float.” 
   SUMMARY OF THE INVENTION 
   In one embodiment, the present invention is a method for payment of an invoice evidencing a payment obligation of a payer to a biller using a third-party intermediary, including receiving at the intermediary a nonrepudiable commitment from the payer to pay the amount of an invoice that is directly authorized by the payer, wherein the commitment includes a payment date subsequent to such authorization; receiving from the biller a legally binding commitment to pay the amount of the invoice that is directly authorized by the payer to the intermediary if the payer does not pay the amount of such an invoice to the intermediary; receiving at the intermediary directly from the payer an authorization to pay the amount of the invoice to the biller; after receiving directly the authorization, paying to the biller at least a substantial portion of the amount of the invoice; and subsequently collecting from the payer (or the payer&#39;s agent) the amount of the invoice. 
   In another embodiment, the invention is an apparatus for facilitating payment of an invoice evidencing a payment obligation of a payer to a biller using a third-party intermediary, comprising: a) a storage device; and b) a processor connected to the storage device, the storage device storing a program for controlling the processor; and the processor operative with the program to: 1) receive at the intermediary a nonrepudiable commitment from the payer to pay the amount of any invoice that is directly authorized by the payer, wherein the commitment includes a payment date subsequent to such authorization; 2) receive from the biller a legally binding commitment to pay the amount of any invoice that is directly authorized by the payer to the intermediary if the payer does not pay the amount of such an invoice to the intermediary; 3) receive at the intermediary directly from the payer an authorization to pay the amount of the invoice to the biller; 4) after receiving directly the authorization, pay to the biller a substantial portion of the amount of the invoice; and 5) subsequently collect from the payer (or the payer&#39;s agent) the amount of the invoice. 
   The present invention is an automated system for managing accounts receivable for both billers and payers via a third-party intermediary. The system for management of accounts receivable includes automated invoicing, funding, and collections. The system uses the Internet for initiating, approving and collecting invoices, and uses electronic funds transfer (e.g., via ACH) for debits and credits to biller and payer bank accounts for funding and payment. The system also uses the Internet and other communications media to keep billers, payers, and the third-party intermediary informed of the payment procedures being adhered to, payment status and financing options, terms and charges. The system and method enable billers to get paid quickly and payers to pay later. Billers get paid within 10 days while providing a service to payers. Payers pay in 60 days without cost or vendor hassle. 
   The system is controlled by billers and payers through the Internet, providing an alternative or supplement to credit cards, 2% 10 net 30, and other receivables alternatives. Both billers and payers have the flexibility to decide which invoices to process with the system and associated terms for payment and collections. 
   Billers enter the invoice amount on the Internet and are paid by the third-party intermediary as soon as the payer approves the invoice on the Internet. The intermediary obtains payment from the payer typically 60 days after the invoice date. Payments to both billers and payers are typically made using electronic funds transfer and the commitment to invoice and pay is typically made electronically. 
   In addition to providing an automated system, the intermediary also provides funding through a funding partner that provides the float needed to make the system work properly. The intermediary typically has also automated the debit/credit of funds from the funding partner using electronic funds transfer. 
   The present invention is unique and superior to the prior systems because it contains the following combination of transaction characteristics:
         Nonrepudiability—With the present invention, the payer makes a legal commitment to the intermediary to pay the amount of any invoice that the payer directly authorizes the intermediary to pay. For a given invoice, the payer commits to pay the intermediary at some time after the direct authorization is made (e.g., sixty days after authorization). This commitment occurs well in advance of the actual payment by the payer.   Dual recourse—The biller makes a legal commitment to the intermediary to pay the agreed upon invoice amount if the payer defaults.   True intermediary—Billers and payers only need to sign payment agreements with the third-party intermediary. Buyers and sellers are not required to execute bilateral agreements with all of their trading partners.   Direct authorization—Payers authorize payment directly with the intermediary.       

   The benefits provided by the present invention include:
         The biller gets paid within 2-3 days after the payer commits to pay the invoice amount.   Both sides of the transaction are registered users of the system, and each can look up the status of any transaction between them at any time using the Web, initiate new invoices and payments, negotiate payment revisions, and authorize and cancel invoices and payments.   Optional payment terms are offered to 1) the payer who decides not to pay on time (e.g., within 60 days), and 2) the biller who decides not to pay immediately in event of a payer default.   Collection terms are written and collections are also implemented electronically.   Comprehensive reporting provides the status of all receivables in the system, both current month and year to date.       

   Other features of the present invention will be apparent from the accompanying drawings and from the detailed description which follows. 

   
     BRIEF DESCRIPTION OF THE DRAWINGS 
     The present invention is illustrated by way of example and not limitation in the figures of the accompanying drawings, in which like references indicate similar elements and in which: 
       FIG. 1   a  is a schematic illustrating an exemplary system for invoice confirmation and funding. 
       FIG. 1   b  is a flowchart illustrating an exemplary method for invoice confirmation and funding. 
       FIG. 2   a  and  FIG. 2   b  are flowcharts illustrating an exemplary application/set-up method. 
       FIG. 3  is a flowchart illustrating an exemplary method for billers to initiate invoices. 
       FIG. 4  is a flowchart illustrating four invoice options given to a payer. 
       FIG. 4   a  is a flowchart illustrating an exemplary method for a payer to authorize an invoice. 
       FIG. 4   b  is a flowchart illustrating an exemplary method for a payer to reject an invoice. 
       FIG. 4   c  is a flowchart illustrating an exemplary method for a payer to delay an invoice decision. 
       FIG. 4   d  is a flowchart illustrating an exemplary method for a payer to change an invoice amount. 
       FIG. 5  is a flowchart illustrating an exemplary method for an intermediary to process invoices approved by a payer. 
       FIG. 6  is a flowchart illustrating an exemplary method for the exception processing of invoices in which a payer requests a delay in payment to the intermediary. 
       FIG. 7  is a flowchart illustrating an exemplary method for the exception processing of invoices in which a payer does not have sufficient funds to allow for withdrawal by the intermediary. 
       FIG. 8  is a flowchart illustrating an exemplary method for the exception processing of invoices in which a biller does not have sufficient funds to allow for withdrawal by the intermediary. 
       FIG. 9  is a flowchart illustrating an exemplary method for the exception processing of invoices in which a biller defaults to the intermediary. 
       FIG. 10   a  is a flowchart illustrating an exemplary method for biller reporting. 
       FIG. 10   b  is a flowchart illustrating an exemplary method for payer reporting 
       FIG. 10   c  is a flowchart illustrating an exemplary method for transaction reporting 
       FIG. 11  is a flowchart illustrating an exemplary method for invoice credits. 
   

   DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT 
   I. System and Method Overview 
     FIG. 1   a  is an overview of an exemplary invoice confirmation and funding system. This system involves a Biller  101 , a Payer  102 , a third-party intermediary  103 , an invoice  104 , and an electronic funds transfer system (e.g., ACH)  105 . The Biller  101 , Payer  102 , and third-party intermediary  103  will typically have their own corresponding computers, which can be communicatively coupled to each other over a network (e.g., the Internet). These computers have the components found in any standard computer (e.g., a processor, a storage device, software programs on a computer-readable medium, and a display) and need not be described in greater detail here because their use, functionality and interrelation will be readily apparent to those of ordinary skill in the art. 
   In  FIG. 1   b , at step  150 , Biller  101  and Payer  102  apply on the website of the third-party intermediary  103 . In his application, the Biller  101  agrees to a legally binding commitment to pay the amount of any invoice  104  that is directly authorized by the payer  102  to the intermediary  103  if the payer  102  does not pay the amount of such an invoice  104  to the intermediary  103 . In his application, the Payer  102  gives the third-party intermediary  103  authorization to pay the amount of an invoice  104  submitted by the Biller  101  to the third-party intermediary  103  in the future, provided the Payer  102  gives his direct authorization to the intermediary  103  to pay the invoice  104 . Payer  102  also gives a nonrepudiable commitment to the intermediary  103  to pay the amount of any invoice  104  that is directly authorized by the payer. For a given invoice  104 , Payer  102  commits to pay the intermediary  103  at some time after the direct authorization is made (e.g., sixty days after authorization). Both Biller  101  and Payer  102  are typically approved and set-up online in real time with prescribed credit limits. 
   At step  155 , the Biller  101  sends an invoice  104  to third-party intermediary  103 , who receives the invoice  104  via the web or other means. The third-party intermediary  103  notifies Payer  102  of invoice  104  to get confirmation. At step  160 , Payer  102  confirms invoice  104  by directly sending authorization to the third-party intermediary  103  to pay the amount of the invoice  104  to the Biller  101 . At step  165 , after receiving authorization directly from Payer  102 , third-party intermediary  103  sends via electronic funds transfer (e.g., ACH)  105  or other means, payment for a substantial amount of the authorized total of the authorized invoice  104  to Biller  101 . At step  170 , third-party intermediary  103  receives payment from Payer  102  of the amount of the invoice  104  via electronic funds transfer (e.g., ACH)  105 , typically 60 days after the invoice date. 
   II. Application Set-Up 
     FIG. 2   a  illustrates the application set-up process (A) in more detail. At step  200 , a business applies to be either a Biller  101  or a Payer  102  or both via the web or other means. The business agrees to contract terms with the intermediary  103 , including electronic funds transfer debit/credit authorization for the third-party intermediary  103 . At step  205 , third-party intermediary  103  performs a business verification and credit/fraud check to determine business acceptance, credit rating and credit limit. At step  210 , credit parameters for the business are entered in a customer database. At step  215 , third-party intermediary  103  notifies the business of acceptance and credit parameters via the web or other means. 
     FIG. 2   b  continues to illustrate the application set-up process in more detail. At step  220 , the business accesses third-party intermediary  103  training site on the web for self-tutorial training and password set-up. At step  225 , the business sends a blank voided check to third-party intermediary  103  and calls third-party intermediary&#39;s  103  customer service telephone number to confirm the business user name, phone number and bank account information (e.g., BIN and routing numbers). At step  230 , third-party intermediary  103  conducts a test transaction to confirm the business bank account and communicates via email/fax/phone with the business to confirm that the test transaction is completed. At step  235 , the business maintains their account information on third-party intermediary  103  web site and third-party intermediary  103  communicates with the business to confirm any changes. 
   III. Biller Invoicing 
     FIG. 3  illustrates invoicing initiated by Biller  101 . At step  300 , Biller  101  sends invoice  104  to Payer  102  by Biller&#39;s  101  usual method, commonly through the mail. At step  305 , Biller  101  sends invoice  104  information to the third-party intermediary  103 , typically to the third-party intermediary&#39;s website. The invoice typically includes an invoice number, Payer  102 , invoice amount, invoice date and description. At step  310 , third-party intermediary  103  notifies Payer  102  of invoice  104  by adding invoice  104  to the Payer  102  web screen payment status report as a payment ready to be authorized and also sends a confirmation to Payer  102 . 
   IV. Payer Invoice Options 
     FIG. 4  illustrates four (4) Payer  102  invoice options: Payer  102  authorizes invoice; Payer  102  rejects invoice; Payer  102  delays invoice decision; or Payer  102  wants to change invoice amount. 
     FIG. 4   a  illustrates a Payer  102  authorizing an invoice. At step  400 , Payer  102  approves invoice  104 , for example by clicking on an invoice approval button on an intermediary web screen or via other means. Third party intermediary  103  updates Payer  102  status on Biller&#39;s  101  and Payer&#39;s  102  invoice reports on third-party intermediary  103  web screens or via other means. The contract agreed to by Payer  102  and intermediary  103  in the application setup process creates a nonrepudiable commitment to pay the intermediary  103  in the future (e.g., via a pre-authorized ACH debit, a paper check or any other traditional payment method) when the Payer  102  directly authorizes payment of the invoice  104  in step  400 . 
     FIG. 4   b  illustrates a Payer  102  rejecting an invoice. At step  405 , third-party intermediary  103  informs Biller  101  of the rejection and suggests that Biller  101  follow-up with Payer  102 . Third party intermediary  103  flags invoice  104  as rejected on Biller  101  and Payer  102  invoice  104  report. Biller  101  follows his normal invoice rejected procedures. 
     FIG. 4   c  illustrates a Payer  102  delaying invoice decision. At step  410 , third-party intermediary  103  communicates notices to Payer  102 , on a schedule determined by Biller  101 , requesting invoice  104  approval. Third-party intermediary  103  also communicates invoice status to Biller  101 . This communication is via web, email, fax, phone or other media available at the time. 
     FIG. 4   d  illustrates a Payer wanting to change an invoice amount. At step  415 , Payer  102  sends notice to Biller  101 . Biller  101  and Payer  102  negotiate (using third-party intermediary&#39;s electronic communication or via other means) the invoice  104  amount and Biller  101  enters a revised invoice  104 . At step  420 , Payer  102  and Biller  101  may agree on a different amount via the web or other means. Subject to advance approval by Biller  101 , Payer  102  may change the invoice amount directly on intermediary  103  web screen. For this case, intermediary  103  will then communicate the revised amount to Biller  101 . 
   V. Processing Approved Invoices 
     FIG. 5  illustrates third-party intermediary  103  processing of invoices  104  approved by Payer  102 . At step  500 , after Payer  102  approval, third-party intermediary  103  initiates a payment for the invoice  104  amount to Biller&#39;s  101  bank account via electronic funds transfer (such as an ACH credit) or other means (such as a paper check) from third-party intermediary&#39;s  103  bank account. Third party intermediary  103  calculates a discount percentage based on the invoice  104  amount for providing the service. This discount can be collected as a lump sum from the Biller  101  to aid in reconciliation. At step  505 , when the time approaches for payment by Payer  102 , third-party intermediary  103  sends a scheduled reminder notice to Payer  102  that the invoice  104  amount will be withdrawn on the date agreed to by Payer  102 . At step  510 , typically 60 days after the invoice date, or such other dates as agreed to by Payer  102 , third-party intermediary  103  transfers the invoice amount from Payer  102  bank account to third-party intermediary  103  bank account via electronic funds transfer (such as an ACH debit), or collects money via other means (such as a paper check). 
   VI. Exception Processing 
     FIG. 6  illustrates exception processing when Payer  102  requests a delay in payment to third-party intermediary  103 . At step  600 , Payer  102  elects to delay payment for up to 30 days (or other time period as agreed to with third-party intermediary  103 ) at an interest rate/fee determined by third-party intermediary  103 . Third party intermediary  103  notifies Biller  101  that Payer  102  has elected to defer payment. At step  605 , third-party intermediary  103  communicates to Payer  102 , upon a schedule determined by third-party intermediary  103 , before debiting Payer  102  account, that the invoice  104  amount will be withdrawn. Third party intermediary  103  determines the schedules for communication and withdrawal. At step  610 , third-party intermediary  103  transfers the invoice  104  amount from Payer  102  bank account to third-party intermediary  103  bank account via electronic funds transfer (such as an ACH debit) or other means (such as a paper check). 
     FIG. 7  illustrates exception processing when the Payer  102  does not have sufficient funds in his bank account to allow withdrawal by third-party intermediary  103 . At step  700 , third-party intermediary  103  informs Payer  102  and Biller  101  of NSF (non-sufficient funds). Biller  101  has the option to resubmit the electronic debit to Payer&#39;s  102  account for the original amount. Third party intermediary  103  initiates an electronic debit to Payer&#39;s  102  account for a NSF fee after informing Payer  102 . At step  705 , third-party intermediary  103  informs Biller  101  that invoice amount will be withdrawn, and date of withdrawal, from Biller  101  bank account to third-party intermediary  103  bank account via electronic funds transfer or other means (such as a paper check). The third-party intermediary  103  discount percentage previously deducted may be added back at month end. At step  710 , Biller  101  can prevent electronic debit from his account via successful resubmission of electronic debit from Payer  102  account or other means (such as a paper check). At step  715 , Biller  101  can elect to delay electronic debit from their account for up to ten (10) days (or other time period determined by third-party intermediary  103 ) at an interest rate/fee determined by third-party intermediary  103 . 
     FIG. 8  illustrates exception processing when the Biller  101  has non-sufficient funds. In step  800 , third-party intermediary  103  negotiates revised payment terms with Biller  101  including length of payment extension and interest rate. At step  805 , third-party intermediary  103  communicates reminder notices to Biller  101  that the invoice  104  amount will be withdrawn via electronic funds transfer or other means (such as a paper check) from Biller&#39;s  101  account. The schedule for reminder notices and withdrawal dates are determined by third-party intermediary  103 . At step  810 , third-party intermediary  103  transfers the revised payment amount (negotiated above) from Biller  101  bank account to third-party intermediary  103  bank account via electronic funds transfer or by other means (such as a paper check). 
     FIG. 9  illustrates exception processing when Biller  101  defaults. At step  900 , third-party intermediary  103  initiates collections procedures against Biller  101  or Payer  102 . 
   VII. Third Party Intermediary System Functions 
     FIG. 10   a  illustrates the third-party intermediary  103  system function of Biller reporting. At step  1000 , Biller report lists all Biller  101  open invoices  104  in the third-party intermediary  103  system. The Biller report typically includes an invoice number, amount, and invoice date, Payer name, status, comment/description, and total amount of Biller  101  open invoices  104 . At step  1005 , Biller report also lists all Biller  101  closed invoices year-to-date in the third-party intermediary  103  system. The closed invoices listed in the Biller report typically include an invoice number, amount, invoice date, payer name, date paid by third-party intermediary, comment/description, and total amount of closed invoices. At step  1010 , the report can be sorted/filtered by various criteria and also downloaded into spreadsheet programs such as Excel. 
     FIG. 10   b  illustrates the third-party intermediary  103  system function of Payer  102  reporting. At step  1015 , Payer  102  report lists all Payer  102  open invoices  104  in the third-party intermediary  103  system. The Payer report typically includes an invoice number, amount, invoice date, Biller name, payment withdrawal date, status, comment/description, and amount total. At step  1020 , Payer  102  report lists all Payer  102  closed invoices year-to-date in the third-party intermediary  103  system. The closed invoices listed in the Payer report typically include an invoice number, amount, invoice date, Biller  101  name, date debited by third-party intermediary, comment/description, and amount total. At step  1025 , the report can be sorted/filtered by various criteria and also downloaded into spreadsheet programs such as Excel. 
     FIG. 10   c  illustrates the third-party intermediary  103  system function of transaction reporting. At step  1030 , Biller  101  transaction report lists all Biller  101  bank deposits and withdrawals performed by third-party intermediary  103  via electronic funds transfers. It also includes amount, deposit/withdrawal date, Payer  102  name, invoice number and description. The report can be sorted/filtered by various criteria and also downloaded into spreadsheets such as Excel. 
   At step  1035 , Payer  102  transaction report lists all Payer  102  bank deposits and withdrawals performed by third-party intermediary  103  via electronic funds transfers. The Payer  102  transaction report also includes amount, deposit/withdrawal date, Biller  101  name, invoice number and description. The report can be sorted/filtered by various criteria and also downloaded into spreadsheets such as Excel. 
     FIG. 11  illustrates third-party intermediary  103  system functions concerning invoice credits. At step  1100 , Billers  101  can initiate invoice credits for existing invoices (not to exceed the invoice amount) at any stage in the process up until four days before the invoice  104  amount is scheduled to be withdrawn from the Payer  102  bank account by third-party intermediary  103 . At step  1105 , if the credit is given before the Payer  102  authorizes the amount, then the original invoice amount is reduced by the amount of the credit. The credit adjustment is done on the third-party intermediary  103  web site by the Biller  101 . At step  1110 , if the credit is given after the Payer  102  authorizes the amount, then the third-party intermediary initiates a deduction from the Biller&#39;s  101  bank account for the amount of the credit. The third-party intermediary discount percentage times the credit amount is added back at month end. At step  1115 , third-party intermediary  103  will also allow credits if no invoice  104  is outstanding. 
   Additional third-party intermediary  103  system functions may include:
         1. Fraud monitoring—The system performs ongoing monitoring of both Biller  101  and Payer  102  activities from initial account application by the business through the total transaction processing cycle.   2. Integration with business accounting software—The third-party intermediary  103  system can be integrated with major business accounting software packages (including QuickBooks, Peachtree, etc.) so that third-party intermediary  103  transactions are automatically transferred to and from the accounting package without requiring duplicate entries.   3. Guaranteed payment—As an option, third-party intermediary  103  may enter into an arrangement with Biller  101  whereby third-party intermediary absorbs credit losses on Biller  101  invoices if Payer  102  defaults, as opposed to Biller  101  absorbing those losses. Third-party intermediary  103  obtains an additional discount on invoice  104  amount for taking the risk of Payer  102  default.       

   The various embodiments described above should be considered as merely illustrative of the present invention and not in limitation thereof. They are not intended to be exhaustive or to limit the invention to the forms disclosed. Those skilled in the art will readily appreciate that still other variations and modifications may be practiced without departing from the general spirit of the invention set forth herein. Therefore, it is intended that the present invention be defined by the claims which follow: