When you’re running a business, timely payments mean everything. The longer it takes to get paid, the later you are with your own bills. If you pay late, the late fees add up and can quickly eat into your profits.
How quickly do you get paid by your brokers or shippers? Many truckers report getting paid 30 days from the time the client receives the original invoice. Suppose your office does the invoicing every other week, you’ve delivered a load, but another week passes before invoices are created. You mail the invoice and mail takes about a week to arrive. It’s now been two weeks, and you simply can’t keep running your business this way.
If your client takes 30 days to pay, you’re going almost two months between when the delivery took place and when you get paid. If your invoice is paid by check, it can take several days for the check to clear and for funds to be released. Don’t be surprised if you find it taking two months before you have the money in hand for the delivery you completed.
This isn’t ideal. You have bills to pay, so you can’t wait months to get paid. What can you do to speed up the amount of time it takes to get the payment you’re owed?
Carefully Build Your Clientele
There are always clients who will pay faster. Those are the clients you want to keep. It should be a priority to maintain a solid business relationship with them. Ideally, you’ll fill the majority of your schedules with their loads.
Before you accept work from someone new, run a business credit check. If they have a history of late payments, you’ll want to reconsider working with them. If you still want to, find out if they’ll agree to pay on receipt or pay on delivery.
If you partner with a freight factoring company, you might be entitled to free business credit checks. Saint John Capital provides free credit checks for businesses. You can check out new clients before you agree to a job, which helps prevent late payments or non-payments.
Make Your Payment Terms Clear
When you’re drafting your invoice or contract with a company, make sure the payment terms are clear. Be specific and use terms like “Payment due within 10 days of delivery” or “Due on receipt.” If you allow them to name the terms, you could face longer wait times to get paid after making a delivery.
Skip Paper Checks
One of the biggest slowdowns for a trucking company involves the shippers and brokers who insist on paying by check. You have to wait for the check to arrive. You have to find time to deposit it at the bank or through your online banking app. You have to wait for the deposit to get processed, and then there’s the wait time while the funds leave your client’s bank to be deposited into your account.
Do your clients all pay by check? If so, it’s time to change that. Start asking them to pay through a bank transfer or e-check. Mailing times on checks cause a delay. Plus, it can take several days for a check to clear the bank. All of that waiting slows your payment down, and that’s not ideal when you have a business to run.
Look for Clients That Allow Electronic Invoices
The USPS has admitted due to difficulty finding more carriers, some areas have longer mail delivery times. It can take up to five business days for a first-class envelope to go from one side of the country to the other. If you’re mailing a letter to a nearby town or city, it can take two business days. Mail is delivered on Saturday, but the USPS prioritizes express and priority deliveries over other mail.
The other issue with mailing invoices is that a letter can get lost. It doesn’t happen often, but if it does, it could add extra weeks to the time it takes to get paid. Ideally, look for brokers or shippers who accept emailed, faxed, or online invoicing options.
If they accept faxed or emailed invoices rather than mailed originals, that’s going to lead to faster payments. Arrange for online payments and avoid checks that take time to clear. Plus, with online payments, you’re not going to get stuck with potential bounced check fees.
Factor Your Invoices and Get Paid Immediately
Invoice factoring is the best way to ensure your trucking company gets paid quickly. You pick up or deliver a load, submit the signed bill of lading, and get a portion of the money you’re owed. There is a small fee involved, but it’s worth it.
Same-day payments are possible if you submit your bill of lading through the app by the noon EST deadline and have a Saint John Visa. You cannot get paid faster than that through traditional invoicing. Even if you miss the noon cut-off or don’t have our Visa, you’ll never wait for more than a couple of days for your payment to arrive via bank transfer.
Thanks to a freight factoring arrangement, you won’t need to hire an employee to create and mail invoices. Invoices are created in our app for you, and you can upload the invoices to your accounting software. You also won’t need staff to chase down late payments. You’ll save money on staffing. The office workers you have can focus on customer service, payroll, marketing, and other critical job duties.
Saint John Capital offers a range of services that help you get paid faster and boost your trucking agency’s revenues. In addition to freight factoring where you can get paid the same day, we also have a load-finding app that helps you search through millions of loads to find jobs that match your criteria. Use our free business credit reports to check the credit history of new clients before you agree to haul a load for them.
It’s our goal to help you get paid either as soon as you pick up a load or after you drop it off. If you want to get paid when you pick up a load, you’ll get a portion of the money due and the balance is paid when you deliver it. If you wait until you deliver it, you can get 100% of the money you’re owed, minus our minimal factoring fee.
With Saint John Capital, you are not obligated to factor every invoice. If you have trustworthy clients who pay on time, you can keep invoicing them as you have been. You can pick and choose which invoices you factor and we’ll take care of them. If you’re working with a new client and developing a relationship with them, you can switch away from factoring when you trust them enough to do so. Sign up online and get started with immediate payments and less paperwork.
