Field of the Invention:

This invention relates to the field of information systems, computational systems, and databases.

Particularly, this invention relates to the field of auctioning systems. More particularly, this invention relates to factoring systems. Background of the Invention:

An invoice or a bill is a document for recording transactions relating to sale of items, products, services rendered. Issued by the 'provider party', it is a document of recordable for the 'provider party' as well as the 'provided party'. Each bill or invoice, under transaction, generally sets out a time period within which it is to be effectively settled.

Factoring is a process relating to such invoices or bills wherein liquidity is the bone of contention that is to be solved owing to the lack of transaction in the set out time period. Factoring is a financial transaction whereby a business job sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount in exchange for immediate money with which to finance continued business.

From the Indian perspective, India is one of the most important countries of the world and growing at a steady and high rate. The disposable income of the individual has gone up drastically from what use to be a decade ago. Thus, the products and needs of the consumers have diversified and expanded to a new horizon. To match these needs, companies are in fierce competition to provide the best quality and at the best price.

In this process, companies face a big hurdle, which is finance or continuous finance. For a company, there are two options to finance; firstly, its own capital or share capital and secondly, borrowed capital or loans.

Share capital is mainly infused in the company at the time of inception and thereon if more capital is needed the promoters have to go for an IPO or right issue, which in a way dilutes the promoter ownership in the company.

Loans are the second option for financing the regular and capital expenditure. Though being most widely available option the company has to bear high interest rates, which hurts the profit and loss account. And the company has to maintain certain amount of cash so that it's able to meet its interest obligations. This blockage of cash results in lowering of the cash availability for operational purposes.

So, looking at the two options and their viability, majorly companies opt for loans for regular operations. This burdens the companies, especially SMEs which require cash in large amount to turn around their inventory and production of the products.

This is where this concept steps in, which is Factoring. Through this, companies will be able to turn the bill receivables /debtors on books to cash. There is a need for a system which is a collaborative platform for depositing bills and invoices to be factored in order to find a suitable factor in an efficient and authenticated manner. Objectives of the Invention:

An object of the invention is to provide a factoring system with an online auctioning platform.

Another object of the invention is to provide a factoring system with a real-time online auctioning platform.

Yet another object of the invention is to provide a factoring system with an online auctioning platform which is efficient and simple to use.

Summary of the Invention:

According to this invention, there is provided a factoring system comprising:

- seller window adapted to provide seller profile after a seller logs into said system, said seller profile being pre-defined seller information;

- buyer window adapted to provide buyer profile after a buyer logs into said system, said buyer profile being pre-defined buyer information;

- funds' window adapted to display information in relation to various pre-defined funds and under different pre-defined categories;

- uploading means adapted to upload bills or invoices on to said system;

- means to define pre-determined parameters / conditions in relation to each of said uploaded bills or invoices;

- auctioning platform adapted to display uploaded bills to a plurality of buyers intending to buy said bills and further adapted to display pre-determined parameters and further adapted to facilitate a bidding process for said buyer(s); and

- rating mechanism adapted to rate sellers based on pre-defined parameters, said parameters being selected from a group of pre-defined parameters consisting of a) scores based on debtor behaviour (whether post-payment, pre-payment, on-time- payment); b) scores based on seller's first parameters (discount, time); c) scores based on seller's second parameters (financials and history of transacting); and d) scores based on auctions' history parameter for each seller.

Typically, said system comprises a first registration means adapted to register at least a first user of said system, said first users being users who want their invoices factored through said system, said first users being a seller.

Typically, said system comprises an editing means adapted to edit seller profile using pre-defined functionalities of said seller window.

Typically, said system comprises a second registration means adapted to register at least a second user of said system, said second users being users who want to buy factored invoices of said seller, said second user being a buyer.

Typically, said buyer window comprises said funds' window adapted to display information in relation to various pre-defined funds and under different pre-defined categories, said categories being selected from a group of categories consisting of advances' category, pending category, O/S discount category, discount earned category.

Typically, said buyer window comprises a history window adapted to display auction history of said buyer.

Typically, said buyer window comprises a history window adapted to display auction history of said buyer under pre-defined categories, said categories being selected from a group of categories consisting of bids category, ^' bids won category, debtors paid category.

Typically, said system comprises checking means adapted to check each of said first user and each of said second user credentials based upon pre-defined parameters.

Typically, said system comprises checking means adapted to assess each of said first users on a first set of pre-defined parameters.

Typically, said system comprises checking means adapted to assess each of said second users on a second set of pre-defined parameters.

Typically, said auctioning platform comprises display means to display each bill or invoice that is to be factored.

Typically, said auctioning platform comprises display means to display pre-defined parameters and conditions set by the seller who uploads the bill.

Typically, said auctioning platform comprises display means with fields adapted to display maximum advance and minimum discount by various buyers.

Typically, said auctioning platform comprises capturing means adapted to automatically capture pre-defined values from bids on said auctioning platform.

Typically, said auctioning platform comprises selection means, adapted to allow a buyer to define maximum advance and minimum discount in said system. Typically, said bidding process is an on-line, off-line, or real-time bidding process.

Typically, said auctioning platform comprises a user based selection means adapted to select a best bid.

Typically, said auctioning platform comprises an automated selection means adapted to select a best bid in an automated verifiable and authenticated process.

Typically, said auctioning platform comprises a limit determining means adapted to determine limit value(s) for discounting.

Typically, said auctioning platform comprises a display means, said display means further comprises a status window adapted to display auction status.

Typically, said auctioning platform comprises a display means, said display means further comprises a status window adapted to display auction status in terms of number of auctions and percentage wise stage of auction completed.

Typically, said auctioning platform comprises a display means, said display means further comprises a status window adapted to display auction status in terms of predefined categories, said categories being selected from a group of categories consisting of total number of auctions, active number of auctions, completed number of auctions, paid number of auctions, cancelled number of auctions, uploaded number of auctions. Typically, said auctioning platform comprises bid placement means adapted to allow a buyer to place a bid amount in accordance with the pre-defined conditions and limit.

Typically, said auctioning platform comprises display means for said seller adapted to allow said user to view bids placed by each of said buyers participating in the auction process.

Typically, said system comprises communication means adapted to communication information relating to a successful bid and corresponding bidder to a corresponding seller.

Typically, said system comprises a trading window for displaying said auction.

Typically, said system comprises a trading window adapted to be customised with seller parameters upon seller login in to said system.

Typically, said system comprises a trading window adapted to be customised with buyer parameters upon buyer login in to said system.

Typically, said auction platform comprises means to input pre-defined information, conditions, and limits provided by a seller, said information, condition, and limits selected from a group of information, conditions, and limits consisting of company information along with address, contact details, industry type, Cill number, Date, Bill amount, duration, minimum advance, maximum discount, recourse or nonrecourse, and image. Typically, said system comprises index computation means adapted to compute an index for transactions to give an overview to said seller about the discount rate that is prevalent in the market based on empirical and statistical parameters extracted from said auctioning platform.

Typically, said system comprises index computation means adapted to compute an index for transactions to give an overview to said seller about the discount rate that is prevalent in the market based on empirical and statistical parameters extracted from said auctioning platform, said computation being governed by:

Factor Index = Avg. of the discount rate of total auctions taken place.

Typically, said system comprises index computation means adapted to compute an index for transactions to give an overview to said seller about the discount rate that is prevalent in the market based on empirical and statistical parameters extracted from said auctioning platform, said computation being governed by:

Factor Index = Weighted avg. of the discount rate (weight would be according to the bill value)

Typically, said system comprises searching means adapted to allow a user to search within said system.

Typically, said system comprises debtor module adapted to allow debtors access to said system.

Typically, said system comprises debtor module with debtor window wherein a seller is shown that how many of its debtors have paid a buyer on time, or have pre-paid a buyer, or have post-paid a buyer. Typically, said system comprises auction history module adapted to record and update auction history of said seller and buyer simultaneously, upon completion of an auction.

Typically, said system comprises auction history module adapted to record and update auction history of said seller and buyer simultaneously, upon completion of payment.

Typically, said system comprises financial score module adapted to display a financial score for buyers, said financial score being computed based upon predetermined formulae and pre-determined parameters comprising: a) advances; b) pending; c) outstanding; d) discount earned; and the like parameters.

Brief Description of the Accompanying Drawings:

The invention will now be described in relation to the accompanying drawings, in which:

Figure 1 illustrates a schematic illustration of the system;

Figure 2a, 2b, 2c, 3a, and 3b illustrate various embodiments of the system of this invention; and

Figures 4a, 4b, 4c, 4d, and 4e illustrate various steps in the system of this invention. Detailed Description of the Accompanying Drawings:

For the purposes of this invention, the term, 'Seller' (S) refers to a company who raises a bill against a client i.e. ABC Company supplying to Reliance.

For the purposes of this invention, the term, 'Buyer/Bidder' (F) refers to a financial institution who buy/bids for the bill at a discount (its earning ) from Seller i.e. a bank (SBI) Factors bidding/buying a bill from ABC Company named on Reliance.

For the purposes of this invention, the term, 'Debtor' (D) refers to a the client of the seller who has to pay on the bill maturity i.e. Reliance is a client of ABC Company.

According to this invention, there is provided a factoring system (100). Figure 1 illustrates a schematic illustration of the system.

Figure 2a, 2b, 2c, 3a, and 3b illustrate various embodiments of the system of this invention.

Figures 4a, 4b, 4c, 4d, and 4e illustrate various steps in the system of this invention.

In accordance with an embodiment of this invention, there is provided a first registration means (RM1) adapted to register first users (S) of the system, said first users being users who want their invoices factored through said system. Typically, the first user is a seller. There is further provided a seller window (Wl) adapted to provide seller profile after a seller logs into the system. This profile may include seller information. This information comprises, but is not limited to, seller company information, seller company documents, and seller company financials. These may be altered or edited in an authenticated manner by the seller using predefined functionalities of the seller window.

In accordance with another embodiment of this invention, there is provided a second registration means (RM2) adapted to registers second users (F) of the system, said second users being users who want to buy the factored invoices of said first user. Typically, the second user is a buyer. There is further provided a buyer window (W2) adapted to provide buyer profile after a buyer logs into the system. This profile may include buyer information.

The buyer window further comprises a funds' window (W3) adapted to display information in relation to various funds and under different categories. These categories may be as follows:

- Advances - The Amount paid to the won auctions as advance. This is calculated by the bid advance and the bill amount.

- Pending - Is the balance amount which is to be paid by the buyer to the seller which is excluding the discount attached to the bid.

- 07s Discount - This is the amount of discount to be earned for which the bill has not matured and the debtor has not paid. This is calculated by discount of the bid won by the buyer multiplied with bill amount.

- Discount Earned - It is the amount discount earned by the auctions whose bills have matured and debtors paid. The buyer window still further comprises a history window (W4) adapted to display auction history of the buyer. This may comprise the following categories:

- Bids - number of auctions which the buyer has bid for.

- Bids Won - number of auctions which the buyer bid is selected by that seller.

- Debtors Paid - number of auctions for which the buyer has received the payment for.

In accordance with yet another embodiment of this invention, there is provided a checking means (CM) adapted to check each of said first user and each of said second user credentials based upon pre-defined parameters. Checking means are modified to assess each of said first users on a first set of pre-defined parameters. Checking means are further modified to assess each of said second users on a second set of pre-defined parameters. The first users or the company has to furnish its details so that a background check on the liquidity and security is conducted.

In accordance with still another embodiment of this invention, there is provided an uploading means (UM) adapted to upload bills or invoices on to said system. The uploaded documents may be verified by human intervention in the system or automated means for verifying authenticity or the like.

In accordance with an additional embodiment of this invention, there is provided an auctioning platform (AP) adapted to display uploaded bills to a plurality of second users intending to buy the bills. A limit for discounting may be pre-set by the first user. Further pre-defined conditions may be set by the first user or by the service provider of the auctioning platform. Each of the second users or a plurality of second users or simply a single second user may place a bid amount on the auctioning platform in accordance with the pre-defined conditions and limit. These bids may be displayable to the first user whose bill is being auctioned. In accordance with an alternative embodiment of this invention, the bid may not be visible to the seller but an automated verifiable and authenticated process may be set out in order to select the best bidder (second user). This information may then be transferred to the seller, thereby providing a link between the first user and a successful bidder intending to factor the bill under question on display on the auctioning platform. There may be a trading window for displaying the auction. The trading window may be customised for view depending upon whether the login is a seller login or a buyer login.

The pre-defined information, conditions, and limits provided by a seller may include company information along with address, contact details, industry type, Cill number, Date, Bill amount, duration, minimum advance, maximum discount, recourse or non-recourse, and image.

The auction platform comprises display means (DM) to display each bill that is to be factored. Each bill, to be factored, can be viewed with its pre-defined parameters set by the seller who uploads the bill. Once, buyers start bidding on the displayed bill, the display means comprises fields (FL) to display maximum advance and minimum discount by various buyers. This is automatically captured from the bids. By using a selection means (SM), a buyer can define maximum advance and minimum discount in the system.

Further, the display means comprises a status window adapted to display auction status. It may show number of auctions and percentage wise stage of auction completed. It may comprise the following categories:

- Total - number of auctions in all categories. - Active - number of auctions on which bids are going on.

- Completed - number of auctions in which the bid is chosen.

- Paid - number of auctions in which the debtor has paid the buyer of the invoice.

- Cancelled - number of Auctions which the seller has removed before bid is selected.

- Up-loaded - number of invoices uploaded but the auction is still to be active.

In accordance with an additional embodiment of this invention, there is provided an index computation means (ICM) adapted to compute an index for the transactions to give an overview to the seller about the discount rate that is generally prevalent in the market based on empirical and statistical parameters extracted from the auctioning platform. This may take into account successful bids, unsuccessful bids, etc. . This would help him in setting certain parameters for the auction and the buyer as well to put in the appropriate bid. Computation may be done in two ways: a. Factor Index = Avg. of the discount rate of total auctions taken place. b. Factor Index = Weighted avg. of the discount rate (weight would be according to the bill value)

In accordance with an additional embodiment of this invention, there is provided a searching means (SCM) adapted to allow a user to search within the system of this invention.

Typically, a buyer may want to search various kinds of invoices posted by various sellers on to this system. The search criteria may include, amidst other things, seller name, advances within a range, discount within a range, industry type, debtor, bill amount within a range, and the like.

Typically, a seller may want to search various kinds of buyers. The search criteria may include, amidst other things, buyer name, advances within a range, discount within a range, industry type, debtor, bill amount within a range, and the like.

In accordance with yet an additional embodiment of this invention, there is provided a debtor module (DBM) adapted to allow debtors access to the system of this invention. This comprises a window wherein a seller is shown that how many of its debtors have paid a buyer on time, or have pre-paid a buyer, or have post-paid a buyer. This is linked with the activity in the buyer profile who has won the auction of this particular seller.

Once the buyer has won an auction, then on payment by the debtor the buyer has to click on the auction and file the date when debtor paid. This system comprises computation means adapted to automatically compute whether debtor paid on time, pre-paid or post-paid the bill which goes to the seller and debtors history and is important for calculating the discount to be awarded.

In accordance with yet an additional embodiment of this invention, there is provided an auction history module (AHM) adapted to record and update the auction history of the seller and buyer simultaneously. On completion of the auction it would add to seller history as completed auction and buyer history as auction won. Secondly, when the factor gets paid he / she will update his / her profile to debtor paid and which will automatically update seller history as finished auctions. In accordance with another embodiment of this invention, there is provided a financial score module (FSM) adapted to display a financial score for buyers. The financial score may be computed based upon pre-determined formulae and predetermined parameters comprising: a) advances; b) pending; c) outstanding; d) discount earned; and the like parameters.

In accordance with an additional embodiment of this invention, there is provided a rating mechanism (RTM) adapted to rate sellers. This provides a rating for enterprises that use the system and method of this invention. The rating is computed on pre-defined parameters. These parameters include a) scores based on debtor behaviour (whether post-payment, pre-payment, on-time-payment); b) scores based on seller's first parameters (discount, time); c) scores based on seller's second parameters (financials and history of transacting); and d) scores based on auctions' history parameter for each seller.

This system and method opens a third and very beneficial door for the companies. It is a simple and easy to use solution with quick benefits.

Figure la illustrates a first embodiment of the system of this invention. The seller (vendor) (S) makes a sale on credit to the debtor (buyer) (D), the seller raises a bill. This bill is booked as bill receivable in books of the seller. Seller and Factor enter the auction platform (AP) through an application and on meeting some preconditions for the membership of the platform. Seller uploads the bill and selects parameters for auctioning the bill. Factor inputs their bids for the appropriate bill they wish to buy. After completion of the auction, there is notification sent from platform to the debtor about the auction. Factor gives the advance amount to the seller. Seller sends a POA to debtor informing him about the transfer of ownership of the bill to the factor. This will be signed by the seller and factor. On the day of maturity of the bill, debtor pays the full amount to the factor. Factor on receiving the amount from the debtor pays the balance to seller after deducting the discount.

Figure lb illustrates a second embodiment of the system of this invention. The seller (vendor) (S) makes a sale on credit to the debtor (buyer) (D), the seller raises a bill. This bill is booked as bill receivable in books of the seller. Seller and Factor (F) enter the auction platform (AP) through an application and on meeting some pre-conditions for the membership of the platform. Seller uploads the bill and selects parameters for auctioning the bill. Factor inputs their bids for the appropriate bill they wish to buy. After completion of the auction, factor gives the advance amount to the seller. On the day of maturity of the bill, debtor pays the full amount to the seller. Seller pays the full amount of the bill to factor. Factor on receiving the amount from the seller pays the balance after deducting the discount.

Figure lc illustrates a third embodiment of the system of this invention. The seller (vendor) (S) makes a sale on credit to the debtor (buyer) (D), the seller raises a bill. This bill is booked as bill receivable in books of the seller. Seller and Factor (F) enter the auction platform (AP) through an application and on meeting some preconditions for the membership of the platform. A bank (B) is assigned for the pay- in and pay-outs. Seller uploads the bill and selects parameters for auctioning the bill. Factor inputs their bids for the appropriate bill they wish to buy. After completion of the auction, there is a notification sent from platform to the debtor about the auction. Factor on completion of the auction pays an advance to the seller through the assigned bank. On the day of maturity of the bill, debtor pays the full amount to the factor in the factors assigned bank account. Factor on receiving the amount from the seller pays through the assigned bank the balance after deducting the discount.

Figure 2a illustrates a fourth embodiment of the system of this invention. The seller (vendor) (S) makes a sale on credit to the debtor (buyer) (D), the seller raises a bill. This bill is booked as bill receivable in books of the seller. Seller and Factor (F) enter the auction platform (AP) through an application and on meeting some pre-conditions for the membership of the platform. Seller uploads the bill and selects parameters for auctioning the bill. Factor inputs their bids for the appropriate bill they wish to buy. After completion of the auction, there is notification sent from platform to the debtor about the auction. Factor gives the advance amount to the seller. Seller sends a POA to debtor informing him about the transfer of ownership of the bill to the factor. This will be signed by the seller and factor. On the day of maturity of the bill, if debtor defaults on the payment, the seller is indemnified, and the seller has to pay the advance back with penalty fees.

Figure 2b illustrates a fifth embodiment of the system of this invention. On default of debtor (D) or if factor wants to sell the bill pre-maturity date, factor (F) can go for a re-auction and sell the bill on the platform (AP) to a high risk buyer at a lower rate on which the factor purchased the bill. Seller (S) history shows the default made on its bill and lowers the credit worthiness of the seller for future auctions.

Figures 3a - 3e illustrate the steps involved in the operation of the factoring system of this invention and are self-explanatory.

While this detailed description has disclosed certain specific embodiments of the present invention for illustrative purposes, various modifications will be apparent io those skilled in the art which do not constitute departures from the spirit and scope of the invention as defined in the following claims, and it is to be distinctly understood that the foregoing descriptive matter is to be interpreted merely as illustrative of the invention and not as a limitation.