Invoice Discounting: How to Build It

from datetime import date, timedelta
from decimal import Decimal

def validate_invoice(inv, po, seller, buyer):
    """An invoice nobody can match to a delivery is an invoice nobody accepts."""
    fail = []
    if not seller["msme_status_verified"]:
        fail.append("seller_not_verified_msme")      # eligibility, not diligence
    if inv["buyer_id"] != buyer["id"]:
        fail.append("buyer_mismatch")
    if po and inv["amount_paise"] > po["amount_paise"]:
        fail.append("exceeds_po_value")
    if inv["due_date"] <= date.today():
        fail.append("already_due")                    # nothing left to discount
    if inv["due_date"] > date.today() + timedelta(days=365):
        fail.append("tenor_too_long")
    if inv.get("already_assigned"):
        # CERSAI is the authoritative answer. Check it, do not assume.
        fail.append("already_assigned_elsewhere")
    return {"ok": not fail, "reasons": fail}

# STEP 4. THE BOTTLENECK. An accepted factoring unit carries the enforceability
# of a physical instrument -- which is exactly why the buyer's acceptance is
# the thing everything waits on, and why it sits inside somebody else's
# accounts payable process rather than yours.

def acceptance_state(fu, now=None):
    now = now or date.today()
    age = (now - fu["uploaded_on"]).days
    if fu["status"] == "ACCEPTED":
        return {"financeable": True, "days_to_accept": fu["accepted_in_days"]}
    if fu["status"] == "REJECTED":
        return {"financeable": False, "reason": fu["rejection_reason"],
                "action": "resolve_with_buyer_then_reupload"}
    # PENDING. This is where working capital dies quietly.
    return {"financeable": False, "pending_days": age,
            "escalate": age > fu["buyer_sla_days"],
            "action": "chase_named_AP_contact" if age > fu["buyer_sla_days"] else "wait"}

# WHAT TO CHECK
# [ ] measure TIME TO ACCEPTANCE per buyer, as a distribution. It is the single
#     most useful number in this product and almost nobody reports it. A buyer
#     with a 14-day median acceptance is not offering early payment, whatever
#     the credit terms say
# [ ] a rejected invoice needs a REASON the seller can act on. "Rejected" with
#     no reason sends an MSME back to a corporate switchboard
# [ ] check CERSAI before financing, not after. A receivable assigned twice is
#     a fraud you will discover at maturity
# [ ] match to a purchase order where one exists. PO-backed invoices get
#     accepted faster because the buyer's AP team has less to verify
# [ ] escalation goes to a NAMED contact in the buyer's AP team, agreed at
#     buyer onboarding. A generic inbox is where acceptance requests go to die
# [ ] never let a seller upload the same invoice twice under different
#     references. Deduplicate on buyer + invoice number + amount + date

# STEP 6. CERSAI registration of the assignment is now EXPRESSLY REQUIRED.
# It is the public record that this receivable now belongs to the financier,
# and it is what makes double-discounting detectable rather than discoverable.

def register_assignment(fu, financier, cersai):
    rec = cersai.register(
        receivable_ref=fu["id"], assignor=fu["seller_id"],
        assignee=financier["id"], amount_paise=fu["amount_paise"],
        due_date=fu["due_date"])
    assert rec["status"] == "REGISTERED", "do not fund an unregistered assignment"
    return rec

# STEP 7. Settlement may run over ANY authorised payment system. Two legs,
# opposite directions, months apart.
def settle_legs(fu, bid):
    return {
        "to_seller": {"when": "T+2", "amount": fu["amount_paise"] - bid["discount_paise"],
                      "to": "seller_own_account_only"},   # the 2026 control
        "from_buyer": {"when": fu["due_date"], "amount": fu["amount_paise"],
                       "to": bid["financier_account"]},
    }

# STEP 8. AT MATURITY.
def at_maturity(fu, payment, guarantee=None, insurance=None):
    if payment and payment["received"]:
        return {"outcome": "settled"}
    # WITHOUT RECOURSE. The financier pursues the BUYER. The MSME seller is not
    # liable and must not be chased -- this is the protection that makes the
    # product usable by small suppliers at all.
    remedies = ["pursue_buyer"]
    if guarantee:  remedies.append("invoke_credit_guarantee")   # GoI-notified trust
    if insurance:  remedies.append("claim_insurance")           # premium NOT on the seller
    return {"outcome": "buyer_default", "remedies": remedies,
            "seller_liable": False}

# NEW IN 2026: a financier may RE-DISCOUNT -- sell a financed factoring unit to
# another financier before maturity. That frees the original financier's capital
# and is the mechanism that lets the market scale beyond one balance sheet.
def rediscount(fu, from_fin, to_fin, price_paise, cersai):
    cersai.update_assignee(fu["id"], new_assignee=to_fin["id"])
    return {"fu": fu["id"], "from": from_fin["id"], "to": to_fin["id"],
            "price_paise": price_paise, "recourse_to_seller": False}

# WHAT TO CHECK
# [ ] never fund before the CERSAI registration returns REGISTERED
# [ ] funds credit ONLY to the seller's own verified account. This is the
#     control that replaced seller due diligence -- treat it accordingly
# [ ] "without recourse" is enforced in your collections logic, not just in the
#     contract. A dunning system that contacts the seller on buyer default is
#     the single worst failure available in this product
# [ ] re-discounting updates the CERSAI assignee. A stale record makes the new
#     financier's claim harder to enforce exactly when it matters
# [ ] insurance premium is NEVER charged to the MSME seller. Expressly barred
# [ ] credit guarantee cover may come from ANY GoI-notified Credit Guarantee
#     Fund Trust -- check which your financiers actually hold, per buyer segment