It's frustrating. You work hard, make tight deadlines and deliver the goods. Then you wait to get paid.
You can reduce the sleepless nights of wondering if and when a customer will finally pay your trucking invoice by following some of these useful tips.
Start out on the right road
Here are some steps you can take upfront that can speed up payments from customers:
- Decide, before you do the first job, how much credit you're prepared to offer a customer and a time limit for payment.
- Set up a system that will track when an invoice is issued and automatically alert you when it's overdue.
- Create a system for following up on late payments as soon as they're overdue, including email and phone script templates.
- Make it easy to pay you. Be sure that your invoice format clearly states the amount due, applicable taxes, payment terms and options, along with where to send payments.
- Consider offering early payment incentives and state them on your invoice.
Issuing your invoice
- Don't wait to submit your trucking invoice. Invoice as soon as a job is completed.
- Make a quick call to confirm that the invoice was received and is in the queue for payment.
Following up on late payments
- Don't wait to follow up. As soon as a payment is late, make a courteous call to inquire when it will be paid.
- Keep emotion out of it. If you can't keep your head when dealing with customers who pay late, give the follow up job to someone who can.
- For those customers who consistently pay late, review your credit terms and adjustÉeven if that means insisting on COD until their payment history improves.
Factoring your freight bills when you simply can't wait to be paid
To remain competitive, you're going to have to offer your customers payment terms of 30, 45 or 60 days. When your trucking business's cash flow constraints simply won't let you wait that long for payment, consider factoring your accounts receivable invoices to access immediate cash.
Once you've set up a factoring agreement with a reputable factoring company, you can access up to 90% of your invoice amount within 24 hours of the invoice being issued. When you use factoring, the factoring company takes care of much of the accounts receivable back office work by issuing invoices, receiving payments and following up on late payments for you. Once your customer pays their invoice, the factoring company pays you the balance, minus their factoring fee.
And, factoring your freight bills for your US trucking company is easier than getting a bank loan or line of credit. That's because qualification is based on the creditworthiness of your customers, not your trucking company's credit rating or business assets.