When trucking fleets and independent drivers find themselves with unsettled customer accounts which have gone well beyond the aging window on open invoices, they turn to collection services. However, collection services can frequently do more harm than good to your cash flow.
The Reasons People Use Collection Services
Collection services are frequently considered the last line of recourse for getting paid when invoices are overdue. Collection services impact the customer’s credit ratings, and can prevent their own companies from growing until the balance is repaid. For many truckers and fleet owners, employing collection services is something that has always been done, and it is just the next logical step when balances are not getting paid on time.
Collections Cause Delays
Within the trucking industry, customer invoices typically have an aging window ranging from 30 to 90 days. This practice is not unusual. The staggered payment schedule is a courtesy to customers, but that double edged sword can also place a strain on cash flow for truckers and fleet owners. When the aging window closes, and customers still have not paid, emails are sent and phone calls are placed to hunt down the money owed. Finally, if no payments are received, the account goes to collection services. However, the turnaround time on collection services is not instantaneous. Collection agencies run on their own internal schedules, which can add another 45 days to the payment process. The additional delays can cause regular operations to grind to a halt for some truckers, who rely on payments just to cover overhead costs.
There Is A Much Better Solution
Invoice factoring removes delays in payments from customers, as well as the need for collection services. When truckers and fleet owners use invoice factoring, the turnaround on submitted invoices is 34 hours or less. There is no red tape or having to wait on another company’s internal schedules. All that is required is verified proof of delivery on a shipment, and the funds are made available. With invoice factoring services, there is no need to redirect time and effort to tracking down payments from customers whose invoices have aged out. Staggered payment schedules become a thing of the past, then cash flow remains healthy and steady.
If you are tired of handling unsettled customer accounts, or waiting on collection services to deliver payments you are owed, contact Express Freight Finance. Our invoice factoring services are fast, efficient, and offer much more than the old-fashioned methods of getting paid for your hard work.