AI Can Read the Invoices, But it Can’t Close the Deal

Written by: Travis Padilla, Director of Sales, Factoring Express

“I’m sorry Dave, I’m afraid I can’t do that.”
 — HAL 9000, 2001: A Space Odyssey

Science fiction has always been fascinated with artificial intelligence. For decades, film and literature have introduced us to AI-powered characters ranging from helpful companions to existential threats. There’s HAL 9000 politely refusing Dave’s request to open the pod bay door, R2-D2 saving the galaxy through creative beeping, and the ever-optimistic vision of humanity’s future represented by Skynet.

Some of these machines want to help humanity. Others want to eliminate it. Hollywood has yet to land on a consistent message.

If you follow the current news cycle around artificial intelligence, you might conclude that we are living through a similar script. Depending on which headline you read, AI will either eliminate most human jobs, usher in an era of unimaginable productivity, or become self-aware sometime next Tuesday.

As entertaining as these predictions may be, the reality is likely to be far less dramatic. AI will certainly change many aspects of how businesses operate, but the transformation will probably look less like science fiction and more like incremental efficiency improvements.

Which brings us to factoring.

Artificial intelligence has appeared across various parts of our industry. Over the past year, vendors have showcased AI-driven tools that promise to streamline document intake, automate portions of underwriting, and assist with portfolio monitoring. Many of these demonstrations are impressive, and frankly, some of them are long overdue.

Factoring has always been a labor-intensive business. Between reviewing invoices, verifying documentation, monitoring collateral, and maintaining detailed client files, a substantial portion of the work happens in operational workflows. It is precisely the kind of environment where technology that can read, organize, and summarize documents quickly becomes valuable.

In other words, AI is very good at paperwork.

This is not a trivial improvement. Anyone who has spent time reviewing a file containing dozens—or sometimes hundreds or thousands—of invoices understands the appeal of a system that can extract key fields, flag anomalies, and organize supporting documentation in seconds.

In the Q4 issue of The Commercial Factor, Christopher Friedman, Esq. and Alex McFall, Esq. at Husch Blackwell discussed this exact topic in their article on artificial intelligence in alternative commercial lending. They observed:

“Origination and onboarding are natural starting points. AI tools can accelerate document intake and help organize the initial file: extracting key fields from applications, invoices, POs, shipping documents, and financial statements; populating internal systems; and generating an initial ‘deal snapshot’ for human review. Where we see companies stumble is when these tools are allowed to drift from ‘intake support’ into unreviewed ‘decision support.’”

That distinction is an important one. AI excels at processing information, particularly when the information is structured and repetitive. It can read documents, identify patterns, and organize data far faster than any human analyst.

But there is one critical part of the factoring business where the technology becomes noticeably less helpful.

Sales.

Factoring is, and always has been, a relationship-driven industry. Deals do not materialize simply because documents exist. Someone has to originate them. Someone has to cultivate the network of brokers, lenders, attorneys, and business owners who eventually decide to make a referral.

There are no invoices to review if there is no client. There are no purchase orders to analyze if there is no transaction. And there is no transaction without someone first building the relationship that creates the opportunity.

That work happens in business development.

Originators spend years building networks that generate deal flow. They attend industry conferences, maintain regular contact with referral sources, and develop reputations for solving difficult problems. A broker sends a deal because they trust that the originator will handle it professionally. A bank refers a borrower because they know the factoring company will treat their client well.

These relationships take time to develop and can disappear quickly if handled poorly.

Trust, in other words, is the real currency of the business.

At this point someone inevitably asks: if artificial intelligence can beat grandmasters at chess and write passable essays, why couldn’t it eventually learn how to build business relationships too?

It’s a fair question. But the problem is that relationships in commercial finance are rarely built on perfectly structured information.

This is where the limitations of artificial intelligence become easier to see. AI can summarize a financial statement in seconds, but it cannot build credibility with a referral partner. It cannot develop a reputation for closing difficult transactions. And it cannot reassure a nervous business owner that their working capital problem will be handled quickly and professionally.

It also cannot attend a conference reception and stay at the hotel bar until the early hours of the morning—where, if we’re being honest, a good number of industry relationships are formed.

That particular skill remains stubbornly human.

To be clear, AI will likely assist originators in several meaningful ways. It can help identify potential prospects, summarize publicly available information about companies, or prepare background research before a meeting. Customer relationship management systems will almost certainly incorporate AI tools that help prioritize outreach or identify patterns in referral activity.

These capabilities are helpful. They allow originators to spend less time gathering information and more time focusing on conversations that actually generate business.

But AI cannot replace the conversation itself.

The most successful originators in the factoring industry rarely succeed because they have the best spreadsheet. They succeed because they understand people. They know which brokers consistently send viable opportunities, which industries are producing new prospects, and which business owners are genuinely looking for a long-term financing partner.

Much of this knowledge is built through experience and intuition. Factoring deals often arrive with incomplete information, unusual circumstances, or operational challenges that require judgment rather than simple rules. Experienced originators develop an instinct for navigating those situations, asking the right questions, and identifying whether a potential transaction is worth pursuing.

An algorithm may eventually help analyze the data behind a deal, but it is unlikely to replicate the instincts that come from years of working within the market.

In fact, the widespread adoption of AI may actually increase the importance of strong originators. As back-office processes become more efficient, factoring companies will be able to process deals faster and manage larger portfolios with fewer operational bottlenecks.

That increased capacity will only matter if firms continue to generate quality opportunities.

Someone still has to bring those deals through the door.

Artificial intelligence will undoubtedly reshape parts of the factoring industry in the coming years. Document workflows will become faster, portfolio monitoring will become more data-driven, and underwriting teams will have better tools for analyzing risk.

These developments should be welcomed. Technology that reduces operational friction allows firms to focus more energy on serving clients and building sustainable businesses.

But the fundamental driver of the industry remains unchanged.

Factoring runs on relationships.

Machines may help us organize information, analyze patterns, and process documentation. They may even help identify new prospects. But the work of building trust, maintaining referral networks, and developing new business will continue to rely on people.

For the foreseeable future, the most important line in the factoring sales process will not come from an algorithm.

It will still come from a human being saying:

“Let’s talk about your deal.”

P.S. In the interest of transparency, I did use AI to help organize a few thoughts while writing this article. It was very helpful with the paperwork!

About the Author

Travis Padilla is the Director of Sales at Factoring Express, where he works with business owners to structure receivables-based financing solutions. He brings nearly two decades of experience within and adjacent to the factoring industry. Travis began his career as a collector before moving into portfolio management. He later spent nearly a decade working with vendors serving the industry, giving him a broad operational and strategic perspective on commercial finance. Over his career, he has developed expertise in portfolio management, client services, and sales strategy.

Outside of the factoring industry, Travis is active in conservation efforts focused on protecting the Great Salt Lake. He is the local chapter coordinator for Grow the Flow Utah, a nonpartisan, volunteer-driven organization dedicated to restoring and protecting the lake through public education and engagement with local and state policymakers.

The views expressed in the Commercial Factor website are those of the authors and do not necessarily represent the views of, and should not be attributed to, the International Factoring Association.