While debt collection is not a fun situation to find yourself in, how do we prevent these situations from ever happening again? Sadly, there are too many variables to totally prevent the need for debt collection services, however, there are a variety of easily accessible tools that can help keep you informed on happenings in the trucking industry.
Do Research on the Broker or Shipper
Before opening a line of credit to any business, a business owner’s first step should be to perform a bit of research on the company, shipper, or broker that you are going to work with. There are a variety of tools that can be used to simplify this search, such as our AWA Broker Alert. This search will address any potential red flags, giving you a reason to not deal with that company. This research can help to prevent you from getting yourself into a debt collection nightmare.
Other sources of information that you can look up are court judgments, summons, credit inquiries, and written-off accounts.
These red flags should serve as a warning to not extend any type of credit to this customer. If you are working with clients who pay late or are continually delinquent, it may be more beneficial to ask them to pay cash or go elsewhere. Worst come to worst, you may need to hire a debt collection agency to help recoup any unpaid debts.
Warning Signs for Existing Clients
There are a variety of red flags to look out for existing customers as well:
- If their payment trends are shifting earlier to later in the invoice period, then this should be something worth noticing.
- Is the company no longer paying in full or extending their line of credit? If it is due to seasonal change, then it may be nothing worth noting. However, if a long-time client is changing their payment methods it may be wise to keep an eye out.
- It is important to look for any changes in their payments because this can be an indicator of potential financial troubles.
Common Reasons Existing Clients Stop Paying Freight Invoices?
There are a variety of reasons that a client does not pay an invoice, but here are a few of the most common:
- No One Followed Up
- Following up with the broker or shipper is sometimes necessary to ensure that you are collecting freight bills in a timely manner.
- Client Forgot To Pay
- On any given day, it is impossible to remember everything that needs to be done, and on some days, a bill forgets to get paid, accidents happen!
- The Frequent Delinquent
- There is always that one client who seemingly happens to forget every time an invoice is due for payment. It may be beneficial to set up email reminders and call the client frequently to keep it on their radar.
- Client Declared Bankruptcy
- If a broker or shipper is no longer in business, the process of collections can become tricky as debt collection is not as simple as directly calling the business owner for a check to clear their debt.
Read our other blog for a full breakdown of this list!
Why Choose AWA for Your Transportation Collection Needs?
AWA operates on a contingency fee basis, meaning, if we cannot collect, you owe us nothing. If collection efforts are successful, our rates will be based on how old and how much the debt is, if there is a damage claim, and whether the debtor is in or out of business.
If you have unpaid freight invoices and aren’t sure what to do next, call 662-892-8591 to speak with one of AWA’s client specialists today or Contact Us Directly!
For more information on our agency practices and methods, view our AWA Collection Process Page.
