Legal · Financial · Operational · Compliance
10-15 working days
12-20 page verification dossier
On-site verification included
Original documents + notary translation
NDA-covered, buyer-exclusive report
The four verification layers
Asia Sourcing's factory verification protocol covers four distinct layers, each answering a different risk question for the buyer. Every layer is independently documented; the final dossier synthesises findings across all four into a written verification report.
Legal verification — the paper trail
Legal verification is the first layer and the most reliable disqualifier. A factory that cannot produce a valid GST registration, IEC (Import-Export Code), Factory Act licence, or building safety certificate on demand is not a factory a buyer should be transacting with — regardless of what the sales pitch says.
Our legal verification includes physical inspection of original documents (not photocopies), cross-verification with issuing authority databases where possible (GST portal, DGFT IEC lookup, state pollution board), and notary-translated English copies of Hindi-language documents for the buyer's file. Documents that don't check out result in immediate disqualification of the factory from the buyer's shortlist.
Financial verification — solvency and continuity
Financial verification answers the question: 'Is this factory going to still exist in 24 months when we're mid-way through our third annual programme?' Buyers who skip financial verification often discover the answer the hard way — sudden factory closures, mid-programme insolvencies, and stranded tooling investments.
Our financial verification covers: 3 years of GST filings (checking for progressive revenue growth or sudden collapse), bank references from at least two banks (confirming account standing and any adverse notations), income-tax returns (checking for pattern gaps or restatements), insurance coverage (property, product-liability, worker's-comp), and public-record litigation search for pending insolvency or trade disputes.
Operational verification — is the claim real?
The most common factory-verification finding is not fraud — it's exaggeration. Factories quote capacity they don't have, claim machinery they've hired for the audit day, and describe production lines they subcontract. Operational verification catches this by physical on-site inspection with a specific observation checklist.
- Physical count of manufacturing equipment (matched against claimed inventory).
- Worker headcount observation across a full shift (not just the audit tour).
- Production-line observation — what's actually being made, what's in WIP, what's on the finishing line.
- Machinery age and maintenance state — old machines are not disqualifiers; poorly maintained machines are.
- Subcontract check — where does raw material come from, where does finishing happen, where does packing happen. Undisclosed subcontracting is a disqualifier.
- Capacity utilisation — how much of the claimed capacity is actually being used, and by which customers.
Frequently asked
FactoryVerificationIndia—commonquestions.
How is factory verification different from a factory audit?
A factory audit (BSCI, Sedex, SA8000, WRAP) is a compliance snapshot — it certifies the factory to a specific standard at a specific date. Factory verification is broader: legal, financial, operational and compliance layers combined into a buyer-specific due-diligence dossier. Audits certify. Verifications investigate.
How long does factory verification take?
10-15 working days from engagement to final dossier. Legal and financial layers take 5-7 days (documents + database checks). Operational and compliance layers require on-site visit, typically 2-3 days on-floor. Report writing takes 2-3 days.
What is in the final verification dossier?
12-20 pages covering: executive summary with go / no-go recommendation, legal verification findings, financial verification findings, operational verification findings, compliance audit summary, risk register with mitigation options, and appendix of source documents.
Can we commission verification on a factory you don't already know?
Yes — we run 'cold' verifications on factories the buyer has independently sourced. The methodology is identical; the report is delivered as a buyer-exclusive document under NDA. Roughly 30% of cold-verified factories fail one or more layers.
What happens if verification fails?
The verification report documents the failure with source evidence. The buyer decides whether to walk away or engage the factory on a remediated basis (some findings are fixable — e.g. missing fire-safety certificate can be resolved; others are not — e.g. undisclosed subcontracting).
Is verification a one-time exercise?
First verification is comprehensive. For active suppliers, we run annual refresh verifications covering financial and compliance layers (legal and operational don't need annual refresh unless the factory has moved or restructured).
How much does factory verification cost?
Single-factory verification typically $2,500-4,500 depending on cluster location and category complexity. Multi-factory verifications discount at volume. Bundled into buying-agent retainers at no incremental cost for retainer clients.
Do you verify factories we plan to work with directly (not via Asia Sourcing)?
Yes. Verification-only engagements are one of our standard service offerings — for buyers running their own sourcing but wanting an independent due-diligence layer. Report is delivered directly to the buyer under NDA.
Where this fits
Adjacentservices,categoriesandclusters.
Related services
Product categories we cover
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