How to achieve 100% Success rate in your freight payment collection.
There is nothing more critical to the success of your freight forwarding business than your system for managing payment receipts invoicing, and collections. Sometimes this system is called a “freight payment management;” whatever it is called, you need to set it up and work it carefully.
If you have many customers and you don’t receive the payment in time, you will be out of business or get bankrupt very soon. Here are the few proven steps to follow by every freight forwarder.
Establish payment setup
The responsibility of every freight forwarder to make the system very easy to pay the payment. There are many software help the freight forwarder to set it right.
New Customer
Ask payment to the customer in advance – if you are handling the first time and no history about the customer it is always fair to ask the payment in advance
Payment Option
Accept payment online. Now it is easy to accept payment online. There are a lot of payment processing companies like PayPal / Stripe help you setup the payment collection.
Add a payment option in website
The web site also a potential revenue stream, allowing them to securely accept payments online from customers, without having to physically be in the office to answer a phone call
Offering Credit.
- You must analyze the customer before offering credit.
- Credit is required if you do have regular business with a customer.
- You must verify the proper details about the company and their affiliations
- You must sign agreement and payment terms before offering credit.
- If it is an overseas agent verify the company is part of the FNC group.
- Also, verify the credit limit with FNC group you validity of payment protection program.
Collection
Accounting team must establish a payment collection procedure.
Follow the payment if the credit terms exceed the limit.
Send reminders infrequent intervals
Inform the billing team/management about the delay
If the customer is an FNC member report them if the case exceeds 60 days.
Bad Debt collection
For customers who do not pay within a reasonable amount of time initiate collections proceedings. You may want to send an account to a collection agency or to small claims court. Decide which is best for each type of account.
Setting up and working a collections management system can help you collect the money that you are due and keep cash flow moving through your company
When you have made all the attempts and fail to collect the freight payment it will be a good idea to submit the case to the collection team.
Debt collection company may charge upto 25% of the collection fee.
You can also list the companies delinquent list of IDF