The Importance of Credit Checks: Know Before You Load
The coronavirus pandemic has changed the way the trucking industry operates. Not only are fleets being extra vigilant to protect the safety of their drivers, they are also taking extra precautions to ensure all their hard work results in actually getting paid upon delivery of a client’s load. Fleets and drivers are working around the clock to ensure the nation has the supplies and resources it needs to keep essential businesses like grocery stores and hospitals stocked. And, nothing is more frustrating than working hard to safely deliver a load only to get paid late — or not at all — by the customer.
The Pain Of Not Getting Paid
Customers that pay late or default on payments can have a significant impact on a fleet’s cash flow, not to mention the time and resources that get wasted on pursuing unpaid accounts. Not enough businesses understand how important it is to conduct basic credits checks to determine its customer’s payment history. Credit checks not only protect your fleet from delinquent payments, it also helps you determine which loads are the best ones to accept.
Perform Regular Credit Checks On All Your Customers
As a freight factoring company, we’ve seen it all. The stories about fleets that are incredibly busy hauling loads, yet still struggling financially are ones that we hear all too often. After analyzing these stories and looking within the operations of those fleets, we’ve learned that the source of these issues often stem from a failure to do credit checks on customers. Why? Because of the urgency that fleets feel in securing loads quickly. The coronavirus pandemic has also, unfortunately, increased these feelings of urgency to secure loads, thus leading to even more mistakes and oversights when it comes to customer credit checks.
To combat this and to mitigate the risk of not being paid, we recommend doing regular credit checks with all your customers — and that includes new AND current customers. Don’t be afraid to ask new customers (regardless of how small or large they are) for current credit references and be wary if they have trouble providing them. And, there’s nothing wrong with conducting regular checks on current customers. We all know how quickly an organization’s financial situation can change.
There’s no harm in being cautious and way too much risk when you cut corners. Ongoing checks and monitoring will alert you of problems before they have a chance to negatively impact you. When was the last time you conducted credit checks on your customers?
For more information about Thunder Funding and the importance of checking a broker’s credit be sure to check out this blog post: The Importance of Broker and Shipper Credit ChecksBack to All Posts