The trucking industry is huge. Yet, with the hundreds of billions of dollars in freight that gets transported each year, getting payments from open customer accounts still remains one of the biggest obstacles. So what can fleet owners do to ensure customer accounts are paid and settled in a timely manner?
Charging Late Fees
Charging extra fees on late payments is one way to keep customer accounts from getting out of control, and maintaining a steady cash flow. Late fees are not unusual, but they do not exactly help to promote the business, either. Additionally, fleet owners must make customers aware of any late fees on outstanding invoices before a sale is made. Given that most fleets do not want to drive business away with out they handle customer accounts, this method should be carefully thought out prior to implementation.
A few fleets have tried this, and while it is a slightly friendlier alternative to late fees, down payments so nothing to increase business. Outside of trucking, getting a down payment on an invoice usually increases the likelihood of customer accounts getting paid, because money is already in play. However, trucking is a very unique and highly competitive industry. Asking customers to pay a percentage of the invoice prior to delivery goes against the grain in the trucking industry, and could negatively impact sales.
Moving Customer Accounts To Collection Services
Collection services is always the last resort with unsettled customer accounts. However, moving customer accounts to collection services when invoices are outstanding can result in bad news. The bad news is that collection services can delay payment even further – sometimes up to 45 additional days – which can severely impact cash flow. Still, there is a way to ensure a steady cash flow without making unnecessary demands on customers or using collection services.
Freight Bill Factoring
Freight bill factoring allows fleet owners to get fast payment on open customer accounts. Open invoices are converted to capital within 24 hours of delivery. There is no need to ask customers for down payments, tack on late fees, or delay payments further with collection services. Freight bill factoring is fast, inexpensive, and allows fleets to maintain a steady cash flow. Additionally, freight bill factoring will check a client’s creditworthiness before a sale is made, which reduces the risk to fleets of taking on bad customer accounts.
Call Express Freight Finance today, and learn more about our comprehensive factoring services for fleet owners.