New and emerging technologies used in invoice discounting platforms

By Annapoorna


Updated on: Jul 26th, 2022


3 min read

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Invoice discounting is a method of raising finance by leveraging unpaid sale invoices. It is a quick way to raise finance by offering a discount to the lending company. This article discusses the emerging technologies in invoice discounting platforms.

In the past couple of years, the invoice discounting process has seen radical changes due to various invoice discounting platforms in the market. Such platforms have improved the invoice discounting process’s efficiency, speed, and dynamism. Technology-driven firms use machine learning and blockchain technology to make the invoice discounting process transparent and safe.

Let us discuss the emerging technologies in invoice discounting platforms:

Blockchain technology: Invoice discounting is a process which involves more than one stakeholder. Thus, a public ledger which cannot be tampered with or manipulated is best suited. Blockchain technology provides a decentralised ledger wherein transactions, once recorded, cannot be tampered with. Some of the benefits of advanced technology are:

  1. Streamline the reconciliation process: Blockchain technology helps streamline the reconciliation process by connecting the buyer’s and the seller’s networks. It helps them reconcile their statements on a real-time basis. As the lending institution is connected to the network, it lets them verify all the details instantly by viewing the public ledger.
  2. Single platform: Blockchain makes all the company’s financial records available on a single platform with no scope of manipulation. Thus, any company can directly reach the financier to avail finance. This saves time and improves efficiency.
  3. Brings uniformity: Machine learning enables companies to transform their invoices into a uniform format. This helps the lending institution to verify documents more efficiently. Deployment of technology eliminates the need for manual verification of documents, saving time.
  4. Transparency: The connected systems provide real-time access to companies. This enables them to generate various reports and take critical business decisions while clarifying the invoice discounting process to auditors. 
  5. Dynamic discount rates: The traditional method offered a fixed discount rate without taking into account the dynamic factors involved in the supply chain. It also neglected the macro factors affecting the transaction. But, the tech platforms leverage machine learning to provide dynamic discount rates to the users. These platforms consider the daily market-clearing rate and other micro and macro factors before provisioning discount rates to the users. 
  6. Prompt payments: The tech platforms act as a third party between the buyers and their vendors to get details of the booked invoices. As soon as the invoice flows into the platform, the discount is auto-calculated and shown to the supplier. These platforms also take care of the accounting entries to ensure prompt payments.

Thus, we can say that technological advancements in the invoice discounting process have helped reduce the credit gap faced by small and mid-sized entities. It serves as a boon for MSMEs. Improved awareness about security and the advantages of these technology-driven invoice discounting methods lead to more adoption by various entities.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more


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