In a recent infographic from Cortera Industry Monitors, it was made clear that the transportation industry has a serious problem when it comes to accounts receivable management, a problem which seems to be getting worse. Each month, Cortera measures and reports on key purchase, payment, and financial trends across major industries, one of which is the transportation industry. Below is a brief synopsis of the most recent monthly report and what it means for the industry as a whole.
Overall, this infographic illustrates that the transportation industry has a tough time getting customers to pay them on time and this problem is getting worse over time. Below are the major points from the infographic as it pertains to accounts receivable management:
-On average, transportation companies are being paid 8.5 days past their agreed upon terms, that is up from 7.8 days in the previous month and 7.4 days the month before that!
-Of the different types of transportation companies within the industry, trucking companies seem to struggle more than others with an average 8.7 days beyond payment, two points above the industry average.
Why is this problem? Because transportation companies, trucking companies especially, are constantly in need of cash flow to deal with rising fuel costs, wages, maintenance, and other immediate financial obligations. It is hard to be profitable as a trucking company unless you are able to keep the cash flowing, which is why collecting on invoices quickly and effectively is critical in such a volatile industry.
Imagine if you, as a trucking company, could get paid without having to rely on using A/R factoring services…it is possible. With a few minor changes to your internal processes, some of which you could start today, you can improve your accounts receivable performance and get paid faster than ever before without having to make major investments in human or technical resources.
For more information on how you can make a few adjustments and see a reduction in DSO, accelerate cash flow, and a reduction of bad-debt write offs…without the use of a factoring service, download this free white paper “17 things you should be doing right now to reduce outstanding accounts receivable.” Get it here.